EPA202-d-?J->-oo
                                    November 1593
                                  TV-  c c
                                  ' -J."  - £, :.'
         Managing Your Financial
         Assistant Agreement

         Project Officer
         Responsibilities
•V
                   EPA Headquarters        ^ pfirtfedonRe£yded Paper

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*
MODULE I

MODULE II

MODULE III

MODULE IV

MODULE V
            TABLE OF CONTENTS
OVERVIEW

REQUIREMENTS GOVERNING
ASSISTANCE AGREEMENTS

PREAPLICATION/APPLICATJON PHASE

AWARD PHASE

PROJECT ADMINISTRATION AND
MANAGEMENT PHASE
MODULE VI   CLOSEOUT PHASE
*

MODULE VII   AUDIT
       VIII  INTERAGENCY AGREEMENTS
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
FEDERAL GRANT AND COOPERATIVE
AGREEMENT ACT

POLICY FOR AWARDING FINNACIAL
ASSISTANCE VS. ACQUISITION

EPA INVOLVEMENT IN GRANTEE
PERSONNEL AND CONTRACTOR SELECTION
UNDER GRANTS AND COOPERATIVE
AGREEMENTS

40 CFR PART 30, "GENERAL REGULATION
FOR ASSISTANCE AGREEMENTS FOR
OTHER THAN STATE AND LOCAL
GOVERNMENTS"

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APPENDIX E
APPENDIX F
 40 CFR PART 31, "UNIFORM
 ADMINISTRATIVE REQUIREMENTS FOR
 GRANTS AND COOPERATIVE
 AGREEMENTS TO STATE AND LOCAL
 GOVERNMENTS

 40 CFR PART 33, "PROCUREMENT UNDER
 ASSISTANCE AGREEMENTS
APPENDIX G
APPENDIX H
APPENDIX I
APPENDIX J
APPENDIX K
APPENDIX L
APPENDIX M
APPENDIX N
 40 CFR PART 40, "RESEARCH AND
   DEMONSTRATION GRANTS"
 40 CFR PART 45, "TRAINING ASSISTANCE"
 40 CFR PART 46, "FELLOWSHIPS"

 40 CFR PART 47, "NATIONAL
 ENVIRONMENTAL EDUCATION GRANTS"

 EPA ORDER 1000.25, "USE OF RECYCLED
PAPER"

 DRAFT EPA ORDER: "POLICY AND
 PROCEDURES FOR FUNDING ASSISTANCE
 AGREEMENTS

PERFORMANCE BASED ASSISTANCE
POLICY

 CARRYOVER POLICY (COMPTROLLER
 POLICY ANNOUNCEMENT 88-09)

 USE OF DISADVANTAGED BUSINESS
 ENTERPRISES (DBE)

 POLICY ON THE TIMELY AWARD OF
 ASSISTANCE FUNDS FOR CONTINUING
 ENVIRONMENTAL PROGRAMS

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APPENDIX 6   STATE GRANT GUIDANCE, "INTEGRATION
            OF POLLUTION PREVENTION"
APPENDIX P   SF 424, "APPLICATION FORM"
APPENDIX Q   LIST OF HEADQUARTERS AND REGIONAL
            MBE/WBE COORDINATORS

APPENDIX R   OFFICIAL PROJECT AND GMO FILES

APPENDIX S   CLOSEOUT POLICY FOR ASSISTANCE
            AGREEMENTS

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     ASSISTANCE
    PROJECT OFFICERS
    TRAINING COURSE
   MODULE I
INTRODUCTION

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                WHY AN ASSISTANCE PROJECT
                      OFFICERS COURSE?

                  • TRAINING IDENTIFIED AS A
                   WEAKNESS

                  • ROLES AND RESPONSIBILITIES
                   NOT IDENTIFIED ELSEWHERE

                  • CERTIFICATION OF ASSISTANCE
                   PROJECT OFFICERS

VIEWGRAPH#1
TITLE:      Why an Assistance Project Officers Course?

KEY POINTS:

    Because of Congressional Hearings, inquiries, and recent audits
    the area of assistance management is receiving increased scrutiny
    from EPA management on how we manage assistance
    agreements.

    EPA obligates approximately $3.5 Billion (or about 50% of its
    budget) through assistance agreements.

    The Project Officer (PO) plays a key role in assuring the proper
    expenditure of these funds.
•   'Several recent assessments identified PO training as one of the
    highest needs in the assistance management area.

    This course identifies the administrative responsibilities of the
    Project Officers (PO), Grants Management Offices (GMO),
    Financial Management Offices (FMO), and other players involved
    in the management of assistance agreements.

•   This course will provide:
    • A framework for the POs' responsibilities;

    * Awareness of the interactions between the POs and others;

    - Listing of the cradle-to-grave responsibilities of POs;  and a
    - Groundwork for future PO Certification.
   9/30/93
                            1.1

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  VIEWGRAPH # 1 (Continued)
  TITLE:        Why an Assistance Project Officers Course?

  KEY POINTS:

  •   This course will not provide specific PO programmatic
      requirements.  This is a responsibility of the National Program.
      Manager (NPM) for each program. Some NPMs (e.g., Office of
      Water, §106 grant program) are developing training courses on
      the programmatic aspects of their PCs' responsibilities.
      This manual is organized into 8 modules:

      - The first module provides background information;

      - The second module discusses sources of administrative
        requirements governing assistance;
      - The third through sixth modules cover the phases from
        preapplication through closeout;
      - The seventh module covers audits of assistance awards; and

      -. The eighth module addresses Interagency Agreements (lAGs.
  •• .£*The modules are followed by the Appendices. Items in the
  •••'• ^Appendices are cross-referenced throughout the text of the
    ;  modules.
9/30/93                     I-2

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             FEDERAL GRANT AND COOPERATIVE
                  AGREEMENT ACT OF 1977


               • DISTINGUISHES BETWEEN
                PROCUREMENT AND ASSISTANCE

               • ESTABLISHES DECISION CRITERIA

               • ESTABLISHES CRITERIA FOR
                SELECTING A GRANT OR A
                COOPERATIVE AGREEMENT
V1EWGRAPH #2
TITLE:        Federal Grant And Cooperative Agreement
              Act of 1977
KEY POINTS:
     The Federal government awards extramural funding in one of two
     ways - either through a direct contract (acquisition) or through
     assistance agreements (grants or cooperative agreements).
     In the 1970's, Congress was concerned over the perceived misuse of
     assistance agreements. Specifically, Congress was concerned that
     agencies were misusing the assistance agreements to circumvent
     competition and other procurement rules, and also applying
     unnecessarily burdensome contract paperwork requirements to
   <  non-procurement transactions.
     To address these problems, and ensure consistent and uniform
     agency practice, Congress passed the Federal Grant and
     Cooperative Agreement Act (see Appendix A) Act in 1977.
     The purpose of the Act is to establish governmentwide criteria for
     determining the appropriate legal instrument to use for an extramural
     funding activity.
     The Act distinguishes between procurement (acquisition) and
     assistance, based on the principle purpose of the relationship
     between the Federal government, and a State, local government, or
     other recipient.  If the principle purpose of the activity (relationship) is
     to provide something for the direct benefit or use of the Federal
     government, then a contract is the appropriate legal instrument to
     use. If the principle purpose of the activity is to provide something of
     value to someone other than the Federal government, then an
     assistance agreement may be used (these differences will be
     discussed on the next slide).

  9/30/93                      I.3

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VIEWGRAPH # 2 (continued)
TITLE:         Federal Grant And Cooperative Agreement
               Act of 1977
KEY POINTS:

    •   It is important to note that the Act does not expand an Agency's
        substantive authority. While the Act provides the basis for
        examining whether an activity should be funded with a contract or
        assistance agreement (grant or cooperative agreement),
        determinations of whether an agency has authority to enter into the
        relationship as spelled out in the instrument must be found in the
        Agency's authorizing legislation, not in the Federal Grant and
        Cooperative Agreement Act.  Nearly all of EPA's statutes specify
        whether a project is to be carried out by either a contract or an
        assistance agreement. However, there is a percentage of EPA
        projects requiring Agency discretion when determining the
        appropriate award instrument.

        Whether to use a contract or an assistance agreement is a
        decision which should  be made in the Programs' annual
        planning process, and certainly before each Program develops
        its annual  guidance.
   9/30/93
                              I.4

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                        ACQUISITION VS ASSISTANCE
                                 ACQUISITION
                                 ASSISTANCE
VIEWGRAPH # 3
TITLE:       Acquisition vs. Assistance

KEY POINTS:
•   The critical determinant to remember when selecting the appropriate
    award instrument is who obtains the direct or initial benefit or use of the
    projects - EPA or the recipient.
•   Section 4 of the Act provides the standards for using a contract:

    - "Sec 4. Each executive agency shall use a type of procurement
            contract as the legal instrument reflecting a relationship
            between the Federal Government and a State or local
            government or other recipient —
            "(1) whenever the principal purpose of the instrument is the
                acquisition, by purchase, lease, or barter, of property or
                services for the direct benefit or use of the Federal
                Government, or
            "(2) whenever an executive agency determines in a specific
                instance that the use of a type of procurement contract is
                appropriate."

    Section 5 of the Act provides the standards for using a grant (Section 6 of
    the Act has a similar provision for cooperative agreements).
    * Sec. 5. Each executive agency shall use a type of grant agreement as
            the legal instrument reflecting a relationship between the Federal
            Government and a State or local government or other recipient
            whenever--
            "(1) the principal purpose of the relationship is the transfer of
                money, property, services, or anything of value to the State
                or local government or other recipient in order to
                accomplish a public purpose of support or stimulation
                authorized by Federal statute, rather than acquisition, by
                purchase, lease, or barter, of property or services for the
                direct benefit or use of the Federal  government." (emphasis
                added).
    '9/30/93                      '-5

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VIEWGRAPH #3 (Continued)
TITLE:         Acquisition And Assistance

KEY POINTS:

   The following criteria apply to all EPA program awards of extramural
   funds, except where the authorizing legislation was enacted after the Act
   and specifically supersedes the Act or other provisions of law. In those
   cases, the award instrument specified in the authorizing legislation must
   be used. Otherwise, the Agency must use the appropriate award
   instrument as required by the Act.  The decision to use a contract or an
   assistance agreement must be based solely on the principal purpose of
   the relationship. (Vs&e, 4/>f^»d^ &, '^/te^ far dusas&/>j frkanejaL /fss/st

   - If the principle purpose is acquiring property or services for the direct
     benefit or use of the Federal Government, then a contract is the
     appropriate legal instrument to use.
   - If EPA is funding activities that are not principally for the direct benefit or
     use of the Federal Government, and the funding is authorized by Federal
     statute, then an assistance agreement may be used.
5  It is the responsibility of the Program Office to make the initial
 ;  recommendations of whether a relationship will be one of acquisition or
.:  'assistance. In some cases, the instrument to use will be identified in the
I  legislation establishing the program. The Approval Official (the program
   person delegated the responsibility to approve or reject an application)
   must certify in its Decision Memorandum for each assistance project that
   the assistance instrument is appropriate, based on the criteria discussed
   above.

   The GMO will make the final determination, based on advice of the
   Director, GAD, Office of of Acquisition Management, and the Office of
   General Counsel or Regional Counsel, if necessary, while reviewing the
   funding package.

   If the GMO decides that an assistance agreement is not the appropriate
   instrument to use, they will return the funding package to the program
   office (Approval Official/Project Officer).
      9/30/93
                                  1.6

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                                GRANTS VS
                               COOPERATIVE
                               AGREEMENTS
                         SUBSTANTIAL FEDERAL INVOLVEMENT
                                    vs.
                             NO SUBSTANTIAL FEDERAL
                                    INVOLVEMENT

VIEWGRAPH#4
TITLE:        Grants vs Cooperative Agreements

KEY POINTS:

        The legal instrument for providing an award of assistance from EPA
        to the recipient is either through a grant or a cooperative agreement.
        it is important to note that the administrative requirements are the
        same regardless of whether a grant or a cooperative agreement is
        used.
    *   The distinguishing factor between a grant and a cooperative
        agreement is the degree of Federal participation or involvement
        during performance.
    •   Section 5(2) of the Act requires that a grant instrument be used
        whenever:
        "(2) no substantial involvement is anticipated between the
            executive agency, acting for the Federal Government, and
            the State or local government or other recipient during
            performance of the contemplated activity."
    •   Section 6(2) of the Act requires that a cooperative agreement be
        used whenever:
        "(2) substantial involvement is anticipated between the
            executive agency, acting for the Federal Government, and
            the State or local government or other recipient during
            performance of the contemplated activity."
    9/30/93

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VIEWGRAPH # 4 (continued)
TITLE:        Grants vs Cooperative Agreements

KEY POINTS:

     Substantial involvement Some examples of substantial
     involvement are:

     - EPA personnel must approve one phase of the project before the
      recipient may proceed to the next phase.

     - EPA personnel must approve key personnel involved in the
      project (other than the principal investigator);

     - EPA will review and approve provisions directly related to the
      work that a recipient may wish to add to any proposed
      contracts; and

     • EPA will participate (technically assist) in some of the project
      activities.

 •    A grant is to be used when EPA personnel will not be directly
     involved in conducting the activities and/or where the program
     statute specifies that a grant will be used.

 »    HOWEVER, whether a cooperative agreement or a grant is
     used,  EPA must:

     - Approve the narrative (workplan/scope of work) prior to award of
      the agreement;

     - Address any deficiencies in performance;

     • Review deliverables after completion of the work; and
     - Ensure recipient compliance with ail applicable statutes,
      regulations, policies and all requirements in the agreement, e.g.,
      on-site reviews (semi-annual, annual) and reviewing progress
      reports.
9/30/93
                            1.8

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                    COMPETITION IN
                ASSISTANCE AGREEMENTS
            • ENCOURAGED BUT NOT REQUIRED

            • MAY BE REQUIRED BY PROGRAM
             OFFICES


VIEWGRAPH#5
TITLE:         Competition in Assistance Agreements

KEY POINTS:
   The Federal Grant and Cooperative Agreement Act encourages
   competition in assistance programs where appropriate, in order to
   identify and fund the best possible projects to achieve program
   purposes.
   However, there is no overall requirement for competition, certainly
   nothing approaching the detail of the legislation applicable to
   procurement contracts, such as the Competition in Contracting
   Act of 1984.
   While there are no EPA statutes requiring competition, some
   program offices are using competition to help ensure that the best
   proposals are being funded e.g., Research and Development
   grants, and some training grants.
   Programs should be looking at the type of agreements they award
   and making a decision on whether to compete an award.
   The proposed EPA Order on Senior Resource Official (SRO)
   responsibilities will require that the SRO (through the Approval
   Official) make an affirmative determination that competition is not
   appropriate for a particular project.
 9/30/93

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                       CONFLICTS OF INTEREST
                    • USING PUBLIC OFFICE FOR
                     PRIVATE GAIN

                    • PREFERENTIAL TREATMENT

                    • LOSING INDEPENDENCE OR
                     IMPARTIALITY OF DECISIONS

VIEWGRAPH #5
TITLE:       Conflicts of Interest

KEY POINTS:

  FEDERAL EMPLOYEE ETHICS STANDARDS

  *   The potential exists for the actual or perceived misuse of funds because
     of conflict of interest.

  •   All circumstances that might result in a conflict of interest, or the
     appearance of a conflict of interest, or any prejudices, biases, or
          employees may not take any action wnicn would, among other
     actions, create the reasonable appearance of:
     - Using a public office for private gain;

     - Giving preferential treatment to any organization or person; or

     - Losing independence or impartiality of action.
     The ethical conduct standard rules for al! EPA employees are contained
     in a regulation entitled, "Standards of Ethical Conduct for Employees of
     the Executive Branch," published on August 7,1992, by the Office of
     Government Ethics (5 CFR §2635).
     Deputy Ethics Officials (DEO)

     - Each Regional Office has two persons designated as DEOs - the
       Regional Counsel and either the Regional Administrator or the
       Deputy Regional Administrator.

     - In Headquarters, the DEOs are generally the Office Directors and
       Deputy Assistant Administrators;

     - In the EPA Laboratories, the DEOs are the Lab Directors.


     9/30/93                     '-10

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 VIEWGRAPH # 5 (Continued)
 TITLE:         Conflict of Interest

 KEY POINTS:

    Disciplinary action for violating the new governmental ethics rules will
    not be taken against an employee who has engaged in conduct based
    on advice of an EPA ethics official, provided that employee has made
    full disclosure of all relevant circumstances.

EXAMPLES
    May an EPA employee who serves without compensation on the board
    of directors of a non-profit corporation that engages in environmental
    activities review a grant application submitted by the nonprofit
    organization? No, because even though the employee's personal
    financial interests will not be affected, the employee must
    disqualify themself from participating in the review of the grant
    application.  Award or denial of the grant will affect the financial
    interests of the non-profit and its financial interest are imputed to
    the employee as a member of its board of directors.

    May an employee whose principal duty in their position is to write
    regulations relating to the disposal of hazardous waste serve as
    president of a non-profit environmental organization that routinely
    submits comments on such regulations?  No, the employee's service
    as an officer would require their disqualification from  duties
    critical to the performance of their official duties on a  basis so
    frequent as to materially impair the employee's ability to perform
    the duties of their position.

EPA INVOLVEMENT IN RECIPIENT DECISIONS
•   POs must not direct or require recipients to use particular persons or
    firms in the performance of a grant or cooperative agreement. (See
    memo entitled "EPA Involvement in Grantee Personnel and Contractor
    Selection Under Grants and Cooperative Agreements? Appendix J)
    EPA personnel may participate in a pane! to determine the
    qualifications of potentiai contractors, but may not be involved in the
    selection of a contractor.

    EPA personnel may also suggest contractors, when asked by the
    recipient, but cannot tell a recipient to use a particular contractor.

RECIPIENT CODE OF CONDUCT

•   The Code of Conduct standards for applicants/recipients are in 40 CFR
    30.613and40CFR31.36(b)(3).  (See Appendices * and ft).

    9/30/93                     l>11

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          ASSISTANCE
        PROJECT OFFICERS
        TRAINING COURSE
        MODULE!!
REQUIREMENTS GOVERNING
 ASSISTANCE AGREEMENTS

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                              REQUIREMENTS
                 GOVERNING EPA ASSISTANCE AGREEMENTS
                   SOURCES GOVERNING EPA
                   ASSISTANCE PROGRAMS


                   HIERARCHY OF REQUIREMENTS


                   SPECIAL PROVISIONS GOVERNING
                   INDIAN TRIBAL GOVERNMENTS
VIEWGRAPH* 1
TITLE:       Requirements Governing EPA Assistance Agreements


KEY POINTS:

    *    EPA assistance is governed by many Federal requirements. Even though
        POs may rely on the Grants Management Office (GMO) for specific details
        and enforcement of some of the requirements, POs must know what
        requirements apply to the agreement.
    •    This module describes the sources of requirements affecting assistance
        programs - Federal statutes, Executive Orders, OMB Circulars, Federal
        regulations, and EPA Orders & policies - and which requirements take
        precedence over the others.
    •    This module also reviews the special provisions pertaining to Federally
        recognized Indian Tribal governments.                         .
   9/30/93
2.1

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                  FEDERAL STATUTES
          • LEGISLATIVE BASIS FOR
           EPA ASSISTANCE PROGRAMS
           DEVIATION FROM STATUTORY
           REQUIREMENTS IS NOT ALLOWED
VIEWGRAPH #2

TITLE:      Types of Requirements Governing EPA Assistance
           ,>
           i-.

KEY POINTS:
      Federal statutes are laws enacted by the United States Congress
      and signed by the President.
      These statutes form the legal basis for all EPA assistance programs.
      All EPA projects/programs must have a statutory basis before EPA
      can legally fund them. If there is no statutory authority for an
      activity, EPA cannot legally fund the activity.
 9/30/93
22

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                                 EXECUTIVE ORDERS
                    •  EO. 11738  Clean Air/Water Violators


                    •  EO. 12549  Determent and Suspension Rules For
                               Nonprocurement Activities


                    *  EO. 11625  National Minority Business Enterprise Program


                    *  EO. 12432  Minority Business Enterprise Development  .


                    •  EO. 12138  National Women's Business Enterprise Policy


                    •  LO. 12803  Infrastructure Privatization


                    *  EO. 12372  intergovernmental Review of Federal Programs
VIEWGRAPH #3
TITLE:       Executive Orders

KEY POINTS:

    Executive orders are requirements issued and signed by the President of
    the United States. They pertain to the business of Federal agencies and
    hold the force and effect of law.  In other words, EPA and our recipients
    must follow the requirements in an Executive Order.

•   This viewgraph identifies the primary Executive Orders governing EPA
    assistance agreements.

"BAD ACTORS"

*   Executive Order 11738, "Clean Air/Water Violators," issued September 10,
    1973, prohibits the utilization of clean air/water violators for Federal
    contracts and projects funded, wholly or in part, with Federal grants or
    loans. If an entity is convicted of violating these provisions, they are listed
    along with the suspended and debarred bidders in the General Service
    Administration's, "List of Parties Excluded from Federal Procurement and
    Nonprocurement Programs" (contact the General/Regional Council, or
    GMO for a copy of this list).

    Executive Order 12549, "Debarment and Suspension Rules for
    Nonprocurement Activities," provides authority to suspend or debar any
    "person" from participation in any Federally assisted project if necessary to
    protect the government's interest.  It is implemented in 40 CFR Part 32.
  9/30/93 *
2.3

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VIEWGRAPH # 3 (Continued)
TITLE:       Executive Orders

KEY POINTS:
 SOCIO-ECONOMIC ACTIVITIES

 •.   Executive Order 11625, "National Minority Business Enterprise Program,"
     issued October 13,1971, clarified the authority of the Secretary of
     Commerce to implement policy and to assist minority business enterprise.
     This Order required the Secretary to develop comprehensive plans and
     specific program goals to promote the use of minority business enterprises,
     as well as the monitoring and reporting systems required to implement these
     plans and programs. This Order also requires the head of each Federal
     department or agency to furnish information and reports in a manner
     prescribed by the Secretary of Commerce.  It further stipulates that within the
     constraints of law and appropriations, Federal departments and agencies
     must foster and promote minority business  enterprise.
     Executive Order 12138, "National Women's Business Enterprise Policy,"
     issued May 18,1979, directed all Federal agencies to:
          Strengthen women's business enterprise and to ensure full
          participation by women in the free enterprise system;
          Take affirmative action in support of women's business enterprise; and
          Require the recipient's of federal assistance to take appropriate
          affirmative action in support of women's business enterprise, and to
    *     prohibit actions or policies which discriminate against women's
          business enterprise. Federal agencies were also required to prescribe
         -sanctions  for noncompliance.
     Executive Order 12432, "Minority Business Enterprise Development," issued
    July 14,1983, directed ail Federal agencies to:
          Develop an MBE plan on an annual basis;
      -    Establish MBE objectives;
          Identify methods for encouraging prime contractors and recipients to
          utilize MBEs;

      -    Build upon programs administered by the Small Business
          Administration and Minority Business Development Agency;
      -    Furnish an annual report regarding the accomplishments of their MBE
          programs; and
          Establish programs to deliver management and technical assistance to
          MBEs.
!     EPA implements these Executive Orders in an Agency Disadvantage^
     Business Plan, which is discussed on page 2.19.
 9/30/93
2.4

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V1EWGRAPH # 3 (Continued)

TITLE:       Executive Orders

KEY POINTS:

   LEVERGING FEDERAL DOLLARS
      Executive Order 12372, "Intergovernmental Review of Federal
      Programs," provides States the opportunity to review and comment
      on activities proposed for Federal funding, It is implemented in 40
      CFRPart29.                             '
   NEW FEDERALISM
      Executive Order 12803, "Infrastructure Privatization", issued April
      30,1992, promotes private investment in local infrastructure.
 9/30/93
2.5

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                        OMB CIRCULARS
             • A-102


             • A-110



             * A-21

             • A-87

             • A-122

             * A-128

             • A-133
Uniform Administrative Requirements for
Grarrts-fn-Ald to State and Local Governments

Grants and Agreements with Institutions of
Higher Education, Hospitals, and Other
Non-Profit Organizations •
40CFH

Part 31


Parts 30 433
Cost Principles for Educational Institutions -    Part 30 &33

Cost Principles for State and Local Governments Part 31

Cost Principles for Non-Profft Organizations    Part 30 & 33

Audits of State and Local Governments-       Part 31

Audits of Institutions of Higher Learning and    Part 30
Other Non-Profit Organizations
VIEWGRAPH # 4
TITLE:       OMB Circulars

KEY POINTS:;                     i

  *    OMB Circulars are guidelines issued by the Office of Management and
      Budget.''They pertain only to the business of Federal agencies. While
      they are binding on the Federal agency or agencies to which they
      relate, they do not hold the full force and effect of law. In other words,
      while EPA must follow the Circulars, unless the Circular is
      implemented in a Federal regulation, recipients are not required to
      follow them.  For instance, recipients are required to follow the cost
      principles because they are incorporated by reference in EPA
      regulations.
      This viewgraph identifies the primary OMB Circulars governing EPA
      assistance programs.
      For a listing of other OMB Circulars that relate to EPA assistance
      programs, see Appendix 1 -A of the Assistance Administration Manual.
  9/30/93
              2.6

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VIEWGRAPH # 4 (cont.)

TITLE:      OMB Circulars
KEY POINTS:

  ADMINISTRATIVE REQUIREMENTS
     OMB Circulars A-102 and A-110 provide uniform administrative
     requirements for managing the pre-award, award, and post-award phases.
     - OMB Circular A-102, issued on March 3,1988, establishes requirements
       for State and local governments. This Circular is implemented in 40 CFR
       Part 31.
     - OMB Circular A-110, issued April 1,1976, establishes requirements for
       institutions of higher learning, hospitals, and other non-profit
       organizations. This Circular is implemented in 40 CFR Parts 30 and 33.

  COST PRINCIPLES
  ••   OMB Circulars A-21, A-87,  and A-122 provide the cost principles recipients
     and EPA must use to determine which project-related costs are allowable,
     i.e., costs any Federal agency can pay for under an assistance agreement.
     Whether or not they can be claimed under a specific project/program is also
     determined by the governing statutes and implementing program guidance
     and policy for that project/program.

     - OMB Circular A-21, issued February 26,1979, and last revised on
       October, 1991, provides guidelines for educational institutions.
     - OMB Circular A-87, issued January 20,1981, provides guidelines for
       State and local governments.
     - OMB Circular A-122, issued August 8,1980 and revised May 19,1987
       provides guidelines for non-profit organizations other than States, local
       governments, and educational institutions.
  NON-FEDERAL AUDITS
  •   OMB Circulars A-128 and A-133 provide audit guidance.
     -OMB Circular A-128, issued April 12,1985, provides Federal agencies
       with policy guidance for implementing the requirements of the Single
       Audit Act of 1984, which governs State and local governments. This
       Circular is implemented in 40 CFR Part 31.
     - OMB Circular A-133, issued March 8,1990, provides policy guidance to
       Federal agencies for establishing uniform requirements for audits of
       institutions of higher education and other non-profit organizations
       receiving Federal assistance. This Circular is implemented in 40 CFR
       Part  30.

 9/30/93*                         2.7

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                         TITLE 40 OF THE
               CODE OF FEDERAL REGULATIONS
i:::::i:;:::;:i:::::::pAjFrwfld«8«»fl*wmAi«!fi::::::::::::i:i:i:::;:
PART 39
PART JO
PAHTJ1
PARTM
PART 39
PARTM
PART9B
PART 40
PART 45
PART 46
PART 47
MwgowmnwnuJ ftovtow of EPA Program* and ActMtiM
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VIEWGRAPH# 5

TITLE:      Title 40 of the Code of Federal Regulations

KEY POINTS:

     This viewgraph illustrates the primary EPA regulations governing assistance
     programs and recipients. All EPA regulations are codified in Title 40 of the
     Code of Federal Regulations.

  •   The Code of Federal Regulations contains rules developed by Federal
     agencies and issued by the Federal government to implement Federal
     statutes or agency policy, and therefore, hold the full force and effect of law.
     If a Federal regulation conflicts with a statute or E.G., the statute or E.O.
     supercedes the regulations.

     Federal regulations may be more restrictive than OMB Circulars, if the
     Federal Agency makes a strong enough case to OMB and OMB approves.
     For instance, in the Superfund program, States are required to follow EPA
     specific procurement requirements because EPA made the case that more
     stringent requirements were necessary to comply with the program's cost
     recovery requirements.
     These regulations are described further in subsequent yiewgraphs.
 9/30/93
2.8

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                        40 CFR PART 29
                                          "«.

               Provides Intergovernmental Review
               Requirements

               Applies to Most EPA Assistance
               Programs
               Implements Executive Order 12372
VIEWGRAPH # 6

TITLE:       40 CFR Part 29

KEY POINTS:
       40 CFR Part 29, issued June 24,1983, provides intergovernmental
       review requirements for EPA-specific programs and activities, as
       well as the appropriate communication channels for voicing
       comments.  Intergovernmental review refers to coordinated review
       processes performed at two or more levels of government.
       40 CFR Part 29 implements Executive Order 12372
       "Intergovernmental Review of Federal Programs," which requires
       Federal agencies to allow State and local governments the
       opportunity to review proposed Federal financial assistance and
       direct Federal development impacting State and local programs.
       Further, Executive Order 12372 provides that where feasible, and to
       the extent permitted by law, State and local review processes and
       comments must be incorporated into Federal programs as early in
       the planning stage as possible.
       Additionally, 40 CFR Part 29 implements provisions of the
       Intergovernmental Cooperation Act of 1968 and the Demonstration
       Cities and Metropolitan Development Act of 1966.

       Indian Tribes are exempt from intergovernmental review
       requirements, but are encouraged to comply.
  9/30/93                         2.9

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 VIEWGRAPH # 6 (Continued)
 TITLE:        40CFRPart29
 KEY POINTS:

  EO 12372

     The intent of the intergovernmental review process is to increase
     the responsiveness of EPA to State and local entities, and to
     identify potential duplication of effort, and/or lack of coordination
     with State and EPA projects conducted in a State. The process
     allows all officials directly affected by a proposed activity to
     ; comment on that activity.
     Though States are not required to do so, they are encouraged to
     develop an intergovernmental review process and identify under
     which assistance programs they want to review applications. Any
     application subject to a State's official review process must undergo
     intergovernmental review before EPA will obligate funds.  This
     procedure applies to most EPA programs. Exceptions are:
!    - Training (other than Wastewater Treatment Operators and Landfill
       Operator training programs);
l.    - Fellowships;
     - Research & development, unless public health is affected or an
,      environmental impact statement is needed; or
   /  - The proposal has a unique geographic focus and is directly
   1:  relevant to the governmental responsibilities of a State or local
      ; government within the geographic areas of the project site.
  *   The comment period  is generally 60 days for new proposals and 30
     days for a continuation programs.
  If No E012372 Process:
     If the State does not have a designated Single Point Of Contact or
     State process established, the applicant must comply with the
     Intergovernmental Cooperation Act of 1968, and Section 204 of the
     Demonstration Cities and Metropolitan Development Act of 1966, as
     amended. These Acts require applicants for federally funded
     projects in metropolitan areas to give area-wide, metropolitan,
     regional or local planning agencies designated to perform planning
     for the geographical location of the proposed project an opportunity
     to review and comment on a proposed application (generally 60
     days).
         k

  9/30/93                          2.10

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VIEWGRAPH # 6 (Continued)
TITLE:        40 CFR Part 29
KEY POINTS:

     Indian tribes are encouraged, but not required, to comply with
     intergovernmental review requirements.
     Remember, the intergovernmental process is designed by the
     States. The only time an intergovernmental review is not required is
     when:
     - The applicant's State process does not cover the program, or
     -  The program is exempt, based on government-wide criteria.
9/30/93'                        2.11

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                        40 CFR PART 30
                    Provides Administrative Requirements for
                    Assistance Agreements to Other Than State
                    and Local Governments
                   Implements OMB Circulars A-21, A-110,
                   A-122, and A-133
VIEWGRAPH # 7

TITLE:      i 40 CFR Part 30

KEY POINTS:
     ; 40 CFR' Part 30 "General Assistance Regulation for State and Local
      Governments" was amended on October 1,1988 and retitled
      "General Regulation for Assistance Programs for Other Than State
      and Local Governments."  (See Appendix i).

      This regulation provides administrative requirements for all recipients
      other than States, local governments, and Indian Tribes. Further, it
      establishes quality assurance guidance requirements.

      40 CFR Part 30 implements: OMB Circular A-21 "Cost Principles for
      Educational Institutions;" OMB Circular A-110 "Grants and
      Agreements With Institutions of Higher Education, Hospitals, and
      Other Non-profit Organizations;" OMB Circular A-122 "Cost
      Principles for Non-profit Organizations," and OMB Circular A-133
      "Audits of Institutions of Higher Learning and Other Non-Profit
      Institutions."
 9/30/93
2.12

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                          40 CFR PART 31

                     Provides Administrative Requirements for
                     Assistance Agreements to State, Local,
                     and Indian Tribal Governments
                   • Implements OMB Circulars A-87, A-102,
                     andA-128
   VIEWGRAPH* 8

JfcTITLE:       40 CFR Part 31
   KEY POINTS:
         40 CFR Part 31, issued March 11,1988, with an effective date of
         October 1,1988, establishes uniform administrative rules for Federal
         grants and cooperative agreements and subawards to State, local,
         and Indian Tribal governments. (See Appendix •.)
         Audit requirements contained in 40 CFR Part 31 are prescribed by
         OMB Circular A-128 "Audits of State and Local Governments."
         Additionally, 40 CFR Part 31, implements OMB Circular A-87 "Cost
         Principles for State and Local Governments" and OMB Circular
         A-102 "Grants and Cooperative Agreements with State and Local
         Governments."
    9/30/93
2.13

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                        40 CFR PART 32

                Implements Executive Order 12549,
                Debarment and Suspension Rules For
                Nonprocurement Activities
                Describes Drug-Free Workplace
                Requirements For Assistance Recipients
VIEWGRAPH # 9

TITLE:       40 CFR Part 32

KEY POINTS:
     40 CFR Part 32, issued May 26,1988, and last amended May 3,
     1990, implements Sections 3 and 6 of Executive Order 12549
     (regarding government-wide debarment or suspension) and selected
     provisions of the Drug-Free Workplace Act of 1988.  It establishes:
     (1) rules for debarring or suspending parties; (2) government
     authority for compiling and distributing lists of parties debarred or
     suspended from receiving Federal assistance; (3) requirements
     governing EPA reporting of parties debarred or suspended from
     Federal activities; and (4) rules governing drug use among
     assistance recipients and their contractors in the project workplace.
     This regulation requires EPA to exclude debarred or suspended
     parties from certain types of assistance, and to report certain
     information about debarred or suspended parties-to the General
     Services Administration.  Debarment or suspension of a party by one
     assistance agency has a government-wide effect, i.e., It debars or
     suspends them from receiving assistance agreements from all
     Federal agencies.
 9/30/93                          2.14

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                      40 CFR PART 33
                  PROCUREMENT REQUIREMENTS FOR:
                  - INSTITUTIONS OF HIGHER EDUCATION,
                   AND
                   OTHER NONPROFITS
VIEWGRAPH* 10

TITLE:      40 CFR Part 33
KEY POINTS:

  •   40 CFR Part 33, issued March 28,1983 and last amended March
      11,1988, describes requirements for procurement under assistance
      agreements for recipients other than States, local governments, and
      Indian Tribes.  This regulation discusses procurement of supplies,
      services, and construction under EPA assistance agreements and
      supplements 40 CFR Parts 30, 32, and 35. (See Appendix §.)
 9/30/93
2.15

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                              40 CFR PART 35
                        • Provid** ProgranvSp«eH1e
                         AMlvtanc* R*qulr*m«nt«
                        • Contains 16 Subpart*
VIEWGRAPH #11
TITLE:       40 CFR Part 35
KEY POINTS:
      40 CFR Part 35, issued October 12,1982, was last amended on June 5,
      1990, when Subpart O was finalized. While 40 CFR Parts 30 and 31
      provide the general assistance requirements, 40 CFR Part 35 provides the
      program-specific assistance requirements for other than Research &
      Development, Training, and Fellowship programs.
 • ••;   The subparts of 40 CFR Part 35 which apply to construction grants are as   ^
      follows:                                                            mm
      S-   Grants for Construction of Wastewater Treatment Work (Subpart C)
      • - AJv£- Reimbursement Grants (Subpart D)
       -^Grants for Construction of Treatment Works/Clean Water Act
         - (Subpart E)
 •      -   Grants for Construction of Treatment Works (Subpart I)
 :      -   Construction Grants Program Delegation to States (Subpart J).
      The subparts of 40 CFR Part 35 which apply to non-construction grants
      are as follows:
       -   Financial Assistance for Continuing Environmental Programs
           (Subpart A)
       -   Cooperative Agreements for Protecting and Restoring Publicly
           Owned Freshwater Lakes (Subpart H)
           State Water Pollution Control Revolving Funds (Subpart K)
           Grants for Technical Assistance (Subpart M)
           Cooperative Agreements and Superfund State Contracts for
           Superfund Response Actions (Subpart 0).
       --   Financial Assistance for the National Estuary Program (Subpart P).
         »
  *   Subparts B, F, G, L, and N are reserved for future use.
  9/30/93                         2.16

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                    40 CFR PARTS 40,45,46, and 47

                    • PART 40
                     Requirements for Research and Demonstration
                     Grants
                    • PART45   .
                     Requirements for Training Assistance
                    • PART46
                     Requ irements for Fellowships
                    • PART 47
                     Environmental Education Grants
VIEWGRAPH#12
TITLE:       40 CFR Parts 40,45, and 46

KEY POINTS:

     EPA provides three primary types of assistance with a nationwide impact:
     research , development, and demonstration; training; and fellowships.
     These types of assistance are normally awarded by Headquarters and are
     governed by 40 CFR Parts 40,45, and 46, which are described below.
     (See Appendix I).

     40 CFR Part 40, issued May 15,1973, and last amended June 24,1983,
     establishes EPA's requirements for awarding and managing research and
     demonstration grants.  Research and demonstration projects are funded to
     research and analyze various environmental issues.

     40 CFR Part 45, issued October 18,1984, implements EPA's requirements
     for awarding and managing training projects. The purpose of this
     assistance is to improve and develop the skill base of students and
     professionals in the environmental field. Training assistance under 40 CFR
   .  Part 45 includes the following: (1) developing, expanding, planning,
     implementing, and improving environmental training; (2) increasing the
     number of trained pollution control and abatement personnel; (3) upgrading
     the level of occupational and professional training among State and local
     environmental control personnel; (4) training people to train others jn
     occupations involving pollution abatement and control; and (5) bringing new
     people into the environmental control field.
  9/30/93                          2.17

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VIEWGRAPH* 12

TITLE:       40 CFR Pans 40,45,46, and 47

KEY POINTS: Continued
       40 CFR Part 46, issued October 18,1984, sets forth EPA's
       requirements for awarding and managing fellowships. This program
       was created to enhance the capabilities of State and local agencies
       in the area of environmental protection and management. EPA
       fellowships are awarded to individuals for specific educational
       programs in the area of environmental science.  EPA sponsors the
       following three types of fellowships: (1) local agency fellowship, (2)
       State agency fellowships, and (3) special fellowships.

       40 CFR Part 47, "National Environmental Education Act Grants
       Regulations; Interim Final Rule", is a program awarded out of both
       Headquarters and the  Regions. The Environmental Education
       grants are available to local education agencies, colleges,
    ;   universities, State education or environmental agencies, not for
    .   profit organizafons, or noncommercial educational broadcasting
    t   entities. '
 9/30/93                          2.18

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                             EPA ORDERS, POLICIES &
                                    GUIDANCE
                             • RECYCLED PAPER
                             • PERFORMANCE-BASED ASSISTANCE
                             • CARRYOVER OF UNOBLIGATED
                              BALANCES
                             • USE OF DISADVANTAGE BUSINESS
                              ENTERPRISES
                             • FUNDING ASSISTANCE AGREEMENTS
                             • POLLUTION PREVENTION GUIDANCE
                             • TIMELY AWARD OF ASSISTANCE
VIEWGRAPH #13

TITLE:       EPA Orders, Policies, and Guidance

KEY POINTS:


      EPA Orders and policies are agency requirements issued by EPA
      Headquarters. Regions may also issue regional policies and guidance
      consistent with Headquarters policies and guidance issued by EPA's National
      Program Managers (NPM). Regions may also issue guidance to implement
      EPA Orders, policies, or guidance.
      The following are the major Orders, policies, and guidance issuances
      affecting assistance administration.
  EPA ORDERS

  *   EPA's policy on recycled paper is provided in EPA Order No. 1000.25 "Use
      of Recycled Paper." Issued on January 24,1990 and last amended on April
      12,1990, this order was developed to promote the use of recycled paper.
      Specifically, it requires new contracts and assistance agreements to specify
      that reports delivered to EPA in conjunction with EPA contracts or assistance
      agreements must be printed on recycled paper (even if recycled paper is
      more costly).  (See Appendix J.)

  *   To help resolve problems EPA program and GMO staffs are experiencing in
      making awards for one-time projects, new programs, and using Administrator
      or Regional Administrator discretionary funds, EPA established consistent,
      Standard operating procedures for funding assistance agreements. (See
      Appendix 3"for the Pending Order, "Policy and Procedures for Funding
      Assistance Agreements.")

      - Clarifies what information is needed before an award can be made, and
       identifies which office is responsible for providing the information.
      - The policy states that the Program Office must identify the Program
       Element, Statutory Authority, and Delegation of Authority before funds are
       distributed to Headquarters or the Region for award.

     9/30/93'                         2.19

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VIEWGRAPH # 13 (Continued)
TITLE:       EPA Orders, Policies, and Guidance

KEY POINTS:

 EPA POLICIES
  *   EPA's performance-based assistance policy, issued May 31,1985,
     establishes agency-wide procedures for negotiating and overseeing
     assistance agreements. It includes guidelines for: (1) assessing
     performance, (2) rewarding accomplishments, (3) correcting problems,
     and (4) imposing penalties. (See Appendix $
 •   EPA's policy on carryover of unobligated balances is covered in EPA
     Policy Statement No. 88-09 "Disposition of Unobligated Balances of
     Assistance Agreements." Issued May 6,1988, by the Office of the
     Comptroller with an effective date of June 30,1988, this policy describes
     the cases in which the use of appropriated funds may be carried over to
     subsequent budget periods and the documentation and accounting
     methods this involves.  Additionally, this policy statement discusses
     cases in which budgets may be decreased without carrying over
     appropriated funds, (see AppendixL*)
     • Carryover of unobligated balances is authorized for both project type
       assistance agreements and Continuing Environmental programs in
;  ,     ,cases where the source appropriation has not expired. For project
•  •    type assistance  agreements, carryover may also be approved
<      when the source appropriation has expired, if the scope of the work
       has not changed and the project period has not expired.
• •   EPA's requirements on the use of disadvantaged business     M
';    enterprises (DBE) are contained in two EPA plans. (See Appendix*.)
: •  The plans set forth how EPA will implement the statutory provisions of
     the Clean Air Act Amendments of 1990 and EPA's 1991 Appropriations
     Act as well as the requirements in the Executive Orders discussed on
     page 2.4. The Clean Air Act requires that EPA establish a minimum
     10% goal for the use of DBEs in contracts awarded under Clean Air
     research grants. The 1991 Appropriations Act requires that EPA
     establish a minimum fiSfe goal for the use of DBEs in contracts awarded
     under all other assistance agreements.
     • In addition  to the two plans, EPA's requirements on the use of DBEs
       are contained in 40 CFR 33.240 (for universities and other nonprofits);
       40 CFR 31.36 (e) (for States, local governments, and Indian tribes);
       and 40 CFR 35.6580 (for Superfund recipients).
9/30/93                          220

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  EWGRAPH # 13 (Continued)
TITLE:       EPA Orders, Policies, and Guidance

KEY POINTS:

      The timely award policy ("Policy on the Timely Award of Assistance Funds
      forfpntinuing Environmental Programs") calls for funding Continuing
      Environmental Programs as quickly as possible after funds become
      available. It was issued September 14,1992, in conjunction with the Office
      of Comptroller's June 26,1992, memorandum clarifying Agency policy on
      when funds are available for award. (See Appendix N.)
  EPA GUIDANCE
      The Agency's implementation of pollution prevention is provided in EPA's
      "State Grants Guidance: Integration of Pollution Prevention," dated
      November 12,1992. (See Appendix^.) This guidance establishes the
      Agency's pollution prevention commitment by:
      • Promoting pollution prevention in State programs supported by EPA
        funds;
      - Ensuring that grant requirements as interpreted by EPA/State workplans
        support innovative State pollution prevention activities;
      * Establishing a process to share information on successful State projects
        and identify statutory or other barriers to funding State proposals; and
      - Building State capacity in pollution prevention to the extent consistent
        with statutory assistance requirements.

  9/30/93                         221

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                      SPECIAL PROVISIONS FOR
                   INDIAN TRIBAL GOVERNMENTS
                       Minimum Requirements For Establishing
                       Treatment as States"
                       Exemption from Certain Statutory
                       Requirements
                       Exclusion from Intergovernmental Review


                       Multi-Media Grants
VIEWGRAPH#14
TITLE:       Special Provisions for Indian Tribal Governments
KEY POINTS:

     To be "treated as a State" under EPA assistance programs, tribes must
     document that they are:
          A Federally recognized Indian Tribal government; and
     ' -:   Have a tribal governing body which oversees environmental and
          health concerns.
 *    For each program, a tribe must demonstrate that it has the administrative
     and programmatic capability to carry out the proposed activities.
     With respect to EPA programs, Indian Tribal governments are excluded
     from intergovernmental review requirements.
     Additionally, Federally recognized Indian tribes, tribal consortia, or
     existing organizations which represent groups of Indian tribes are eligible
     for multi-media grants. Multi-media grants are agreements which provide
     government funds for multiple purposes under one grant.  EPA's
     Multi-Media Program for Indian Tribes was established by statute in
     FY91.
     Multi-media environmental program grants are provided for the purposes
     of:
          Assisting a tribe to  develop capability to operate environmental
          programs; and
          Determining/prioritizing the Tribe's environmental needs and
      \   addressing those needs through a multi-media approach.

9/30/93                          2.22

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     ASSISTANCE
   PROJECT OFFICERS
    TRAINING COURSE
   MODULE III
PREAPPLICAT1ON
  APPLICATION
     PHASE

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                                                                         TJ
                                                                         33
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     ASSISTANCE
   PROJECT OFFICERS
    TRAINING COURSE
   MODULE III
PREAPPLIGATION
  APPLICATION
     PHASE

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                        OVERVIEW



                PRE-APPL1CATION ASSISTANCE
                                                 \

                APPLICATION REVIEWS

                PROGRAM GUIDANCE
V1EWGRAPH # 1
TITLE:       Overview

KEY POINTS:

      The PO reviews preapplications and applications to determine:
      -  Relevance of the proposal to EPA objectives;
      -  Programmatic, technical, and/or scientific merit;
      -  Relationship to other proposals and on-going work; and
      -  Availability of funds.
  •   The PO's and GMO's responsibilities begin with the assistance
      provided to prospective applicants in developing their
      application (pre-application assistance). The PO conducts the
      programmatic evaluation of the narrative/workplan and provides
      assistance on the programmatic aspects of the application,
      while the GMO conducts administrative evaluations and
      provides assistance on the administrative aspects of the
      application. In some areas, such as reviewing the budget and
      determining whether a grant or a contract should be used, the
      expertise of both the PO and GMO are required to ensure that
      the Agency makes an appropriate determination.
  •   EPA fin-housed Review. The program staff performs a
      programmatic evaluation of the application.  When the
      programmatic review of a proposal requires specific
      qualifications not available in the program, the reviewer must
      obtain assistance from other EPA staff with expertise in the
      subject area, such as reviewing a quality assurance plan,


   9/30/93.                  3.1

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VIEWGRAPH # 1 (Continued)
TITLE:         Overview

KEY POINTS:

     After the PO's and GMO's initial contact with a prospective applicant,
     they should keep a record of any material discussion with the applicant.
     While the Official File is not required until the GMO assigns an
     Assistance Identification Number, It may be helpful to keep a record of
  .   all discussions with the applicant in case an issue arises later which
 ;    was discussed during this phase.
    9/30/93
3.2

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                              GUIDANCE

                      • HEADQUARTERS GUIDANCE
                      • REGIONAL GUIDANCE
                      • DISTRIBUTION OF GUIDANCE
VIEWGRAPH#2
TITLE:       Guidance
KEY POINTS:
   •    The award of an assistance agreement begins with the issuance of
       Agency guidance to the applicant., The purpose of the guidance is
       to inform applicants of the:
       - Amount of possible funding;
       - EPA (Headquarters/Regional) program priorities;
       - Tasks/activities which must be addressed in the workplan or
        narrative;
       - Application due date;
       - If the award is competed, the evaluation criteria and the relative
        weight of each criteria;
       - Statutory cite;
       • Evaluation criteria;
       •- Need to meet DBE requirements; and
       - EPA Contact person.
       To eliminate misunderstanding concerning what EPA will fund and
       what is expected from the applicant, the guidance must be in writing.
   *    Depending on the situation, how the Program distributes the guidance
       will vary:
       - Send directly to the applicant, e.g., if the PO knows the potential
         applicants which are eligible, such as continuing environmental
         program grants,
       • Publish in a publication (Federal Register. Commerce Business
        Daily, trade journal) which reaches the target audience.e.g., if
        the awards are to be made based on competition,
       - Distribute to potential applicants in a meeting /conference.
    9/30/93                    3.3

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                    PREAPPLICATION ASSISTANCE

                     • FORMAL OR INFORMAL

                     • RESULTS IN BETTER PROPOSALS

                     • BENEFITS BOTH EPA AND
                      THE APPLICANT

VIEWGRAPH#3
TITLE:        Preapplication Assistance

KEY POINTS:

•   EPA encourages POs to meet with the prospective applicants and
    discuss the proposed work and budget before they submit an
    application.  This will help the prospective applicant to develop the
    proposal, or sharpen the focus of a proposal, and will help avoid
    delays caused by submitting an incomplete application.
•   Preapplication assistance may be formal, i.e. the prospective applicant
 :   requests in writing or sends in an SF 424 "Application For Federal
    Assistance" (designated as a Preapplication); or informal, i.e.,
    discussions with the PO and GMO concerning various aspects of the
    proposed project or questions on the process itself.

*   Preapplication assistance should take place if it is appropriate, i.e., it
    may not be necessary for Continuing Environmental Program grants,
    but may be desirable for new recipients or for projects where the
    applicant wants to "grease  the skids" to speed up the process.
•   The POs and GMOs should review preapplications generally within 45
    days of receipt.
    Applicants for Continuing Environmental Program grants should
    request preapplication assistance well before the 60 day application
    due date to allow sufficient time for a thorough review.

    The discussions the PO will have with the prospective applicant will
    focus on programmatic activities EPA will fund,  e.g., does the
    application meet statutory goals and objectives and is it consistent with
    National and Regional program guidance.         .
•   The discussions with the GMO will focus on the administrative issues,
    e.g., what needs to be submitted with the application to make it
    acceptable from the administrative point of view, what certifications are
    required, what justification is needed to support the budget.
    9/30/93                    3.4

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 IEWGRAPH # 3 (Continued)
   LE:         Pre-application Assistance
KEY POINTS:
*   Release of information:
    - If the Award is to be made based on competition, no EPA official may
     provide information regarding priorities, criteria, or other pertinent matters to
     a particular applicant or other interested person, unless such information is
     available to all parties.
    - If the award is not based on competition. EPA employees may review draft
      narrative/workplans and provide input.  EPA employees may also negotiate
      with the applicant to change the proposed outputs, reduce the assistance
      amount, or condition the award based on approval of a revised workplan.
    - As a rule, EPA employees should not prepare an application on behalf of an
      individual or organization. It is permissible to help applicants by answering
      questions, but the applicant should be preparing the application, after all,
      this is their proposal!
•.   After evaluating a preapplication, the Approval/Decision Official or their
    designee must notify the applicant, preferably in writing, of the results of the
    evaluation and either:
    - Encourage submission of a formal application for assistance.  The reviewer
      may suggest modifications or revisions to any aspect of the application, but
     under  no circumstances should the applicant be assured of funding; or
    - Reject the pre-application. This letter should give specific reasons for
      rejection, e.g., lack of scientific/technical merit, not relevant to Agency's
      objectives, lack of funds; or
    - Take other action. Suggest the preapplication be submitted to another
      Federal agency which has a more direct interest in the project.
    Some benefits from preapplications are:
    • Establishes communications between EPA and the potential applicant;
    • Determines eligibility early in the process;
    - Determines how well the project fits program guidance and  objectives;
    - Determines how well the project might compete with other similar
      applications;
    - Discourages inappropriate proposals;
    • Speeds award of meritorious proposals; and
    - Prevents the need to rework inappropriately or incorrectly prepared
      formal applications.
         9/30/93                     3.5

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                          APPLICATION PHASE
                     • GMO RECEIVES APPLICATION

                     • GMO CONDUCTS ADMINISTRATIVE
                      REVIEW

                     • PO CONDUCTS PROGRAMMATIC
                      REVIEW

                     • REVIEW AND EVALUATE
                      APPLICATIONS IN 60-90 DAYS

VIEWGRAPH#4
TITLE:       Application Phase

KEY POINTS:

   During this phase the PO and GMO will review the application to ensure that
   it meets programmatic and administrative requirements.
   The application should be sent to the GMO who will assign an Assistance
   Identification Number, establish the official assistance file, and conduct legal
   and administrative evaluations. Remember, an application is not officially
   received in EPA until the GMO assigns an Assistance Identification Number
   and enters it into the Grants Information and Control System (GIGS).
   The GMO is responsible for sending a copy of the application to the PO, who
 •; will perform a technical review and also obtain the required in-house or
  • extramural reviews. These two reviews should be done concurrently to
   minimize delays. While the length of the programmatic review will vary
   depending upon the complexity of the proposal, time of year, program
   workload, other EPA staff involvement, the PO should attempt to complete
   the review within 3 weeks from receipt of the application.
   - Technical Review. The PO's technical review is an appraisal to select those
     proposals that will contribute most effectively to EPA's program objectives
     and priorities.  The PO must ensure that the proposal is consistent with
     applicable regulations and established EPA program criteria and annual
     guidance.
   - Extramural fNon-EPAl Review. EPA supplements Jhe reviews of Agency
     personnel in some programs by obtaining independent reviews from
     qualified non-EPA professionals.
     • Research and Demonstration. The program must arrange for a minimum
       of one intramural and two extramural reviews for technical/scientific merit
       of applications found to be relevant.
     * Extramural reviews are not required for continuation applications, or for
       applications requesting support of a conference or symposium.

       9/30/93                    3.6

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VIEWGRAPH # 4 (Continued)
TITLE:       Application Phase

KEY POINTS:
    A review should:
    - Highlight strengths and weaknesses;

    - Identify gaps between program objectives and intended activities;
    - Determine that the correct funding mechanism (contract or assistance
      agreement) is being proposed;
    - Identify best management approaches; and
    - Suggest how a proposal might be strengthened.

    ERA'S general goal is to complete its application review and evaluation
    within 60-90 days after the GMO receives the application.
    The PO and GMO may discuss with applicants how to improve
    applications.
    POs who furnish information to the public must make sure the information
    is consistent with program objectives and guidance, as well as releasable
    under the Freedom of Information Act. If there is any question over
    whether the information is releasable under FOIA, the PO must contact the
    Office of General Counsel (Headquarters POs) or the Office of Regional
    Counsel (Regional POs). Never release a draft workplan.
      9/30/93                   3.7

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               THE APPLICATION PACKAGE
Standvd I
AppitetUm I .
Form (Sf 424) |+
+ .
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-------
                 SF 424 - APPLICATION FOR FEDERAL
                            ASSISTANCE
                              FACESHEET

                              BUDGET INFORMATION

                              ASSURANCES

                              NARRATIVE/WORKPLAN
VIEWGRAPH#6
TITLE:        SF 424-Application for Federal Assistance

KEY POINTS:

     The application (SF 424) consists of four parts ~ the Facesheet, Budget
     information, Assurances, and a program narrative/workplan.
     Even if an application has already been through a preapplication
     evaluation, it still may be necessary for the GMO and PO to work with the
     applicant to revise the application further before it is approvable.
     The PO is also responsible for:
     - Reviewing the application to ensure that all budget items, proposed
       contracting and subcontracting, and work elements are reasonable and
       necessary. To do this, the PO needs to review the narrative/workplan
       and must ask the applicant questions if the application does not
       provide a clear understanding of why the costs in the budget are
       necessary and reasonable.
     • Reviewing the application budget to ensure the activities are eligible
       under the program statute(s), guidance, and regulations, and the work
       is allocable to the project.
     GMOs are responsible for reviewing and analyzing the application to
     ensure that ail information is complete and correct. This includes
     ensuring that all costs are allowable and that assistance is the
     appropriate funding  mechanism. The GMOs also ensure that the
     application meets all statutory, regulatory, and legal requirements.
     The SF 424 application (see Appendix  ) is used for ail EPA programs
     except for the Wastewater Treatment Construction Grants program
     (which uses EPA Form 5720-12), and the Fellowship programs (which
     use EPA Form 57/0-2). These last two forms were specifically
     developed for those two programs.
       9/30/93
3.9

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                                FACESHEET
                     GENERAL SUMMARY INFORMATION
                         SF424

                        Facesheet:

                        • Genera)
                        Information

                        • Project
                        Summary
  Provides General
  Information About
  Applicant

  Provides Summary
  Information on the
  Proposed Project
VIEWGRAPH#8
TITLE:        SF 424 - Facesheet

KEY POINTS:
       The applicant provides the information on the Facesheet. The
       Facesheet provides:

       • General administrative information about the applicant, e.g., type of
         entity, location of the project, name of the applicant's contact
         person, Congressional district, and
       - Summary information about the proposed project, e.g., budget,
         length of budget and project periods.

       The GMO will review the Facesheet to ensure that all items are
       properly completed.

       If the award of assistance involves verification of the recipient having
       met the required level of effort under a previous award (e.g., §106 of
       the Clean Water Act and §105 of the Clean Air Act), the most recent
       Financial Status Report and supporting documentation must be
       carefully reviewed to ensure the requirement was met.
        9/30/93
3.10

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                         SF4M.A

                         Budget
                         information
                              BUDGET INFORMATION
                 SF 424>A IdentfflM Total Project CoetK
                 • Section A-Budget Summary

                 • Section 8-Budget by Object daw
                   Category
                 • Section C-Non-Federal Raeourcet
                 • Section D-ForecttfrdCaahNeada
                 • Section E - Budget EatJmatee of
                   Fedenl Funda Needed for Balance
                   of Project
                 • Section F-Other Budget Information
VIEWGRAPH # 9
TITLE:

KEY POINTS:
SF 424 - Budget Information
    SF 424A (Budget Information) - Budget information indicates total funding
    needs and summary information for proposed projects.
    Sections A, B, C, and D call for budget estimates for the entire project,
    except for projects funded on an annual or other incremental basis. In the
    latter case, Section E provides the budget information for subsequent
    budget periods. The form itself provides detailed  instructions for completing
    the form.                   ,

    The applicant is responsible for preparing the budget.
    The narrative/workplan  must justify the necessity for every item. There is
    no one way to determine the reasonableness of any particular item. If the
    PQ questions whether a particular item is "reasonably" priced, they should
    ask other POs or call various suppliers. The PO may also ask the GMO for
    advice, other EPA persons, or the applicant how they arrived at the cost.
    The PO is responsible for reviewing the proposed budget against the
    Narrative/Workplan to determine whether the budget is reasonable from a
    programmatic perspective. In making this determination, the PO should
    consider the technical necessity for and price reasonableness of proposed
    personnel, travel, equipment, supplies, procurements, and other items in the
    The GMO is responsible for ensuring that budget information is complete
    and costs are consistent with Federal cost principles and policies.  The
    GMO also reviews the indirect cost rate (if indirect costs are claimed) and
    will verify that the applicant has a current, approved rate (provisional or
    final).
        9/30/93
                    3.11

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VIEWGRAPH # 9 (Continued)
TITLE:         SF 424 • Budget Information

 KEY POINTS:

     The PO should also consider what will happen to the property after it is
     no longer needed for the project/program or the project/program is
     terminated. The GMO will add a condition to the  agreement indicating
     this discussion.
     Section A - Budget  Information provides a summary pf the budget by
     program, function, or activity.
 •   Section B - Budget  Categories identifies budget amounts by object class
     categories. Object  Class categories include: personnel, fringe benefits,
     travel, equipment, supplies, contractual, construction, indirect cost, and
     other.

     -  The applicant must provide documentation to support the costs in each
       object class. This support may either be in the  narrative/workplan or may
       be an attachment to the application. If the information supplied is not
       sufficient to determine that the costs are reasonable and allowable, the
       GMO or PO will contact the applicant to obtain additional support.

     •  For Personnel, the applicant must identify all staff positions by title,
       annual salary, and the percentage of time each position will be assigned
       to the project/program. The PO must examine staffing requirements for
       the project and must determine whether project staff support is adequate
       and the right mix to meet the project objectives. (The GMO will review
       this category to determine if the salary ranges proposed are reasonable.
       Some of the questions the PO should consider  are:
         •  Who is charged with the ultimate responsibility to manage the
            project?
         -  Will key staff members participate full time?

         -  Are there gaps in areas of expertise?
     -  For Equipment, the applicant must identify each item and its cost. The
       PO must review the list and determine that each item is necessary to
       carry out the objectives of the  project.
       - Some programs (such as Superfund) require the applicant to conduct
         a cost/benefit analysis of purchasing equipment, leasing, or letting the
         contractor purchase the equipment.  The PO is responsible for
         ensuring that the applicant complies with any preaward program
         specific requirements regarding property (or any other cost item).
         9/30/93
3.12

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yiEWGRAPH # 9 (Continued)
 ITLE:         SF 424 • Budget Information

 KEY POINTS:

     - For Supplies, the applicant must only request supplies which are
       needed to complete the proposed workplan.  The PO must review
       these costs to determine that the requested supplies are needed for
       the proposed workplan.

     - For Travel,  the applicant must identify the number of trips planned,
       the destination for each trip, the number of travelers, and the
       estimated cost of each trip.  The PO must review these costs to
       ensure that  the number of trips are necessary to complete the scope
       of work and that the number of travelers is consistent with the
       purpose of the trip. The GMO will review these costs to verify that the
       costs are reasonable, e.g., airline ticket costs, per diem rates,
       mileage rates.
     - For the Other category of costs, the PO must review these to
       determine that they are consistent with the proposed workplan and
       are necessary to complete the approved workplan.
     - For contractual costs, the applicant must identify what contracts
       they intend to award during the budget period. The PO must review
       this list and  satisfy themselves that:
       * The contract support proposed is necessary to carry out the
         objectives of the project/program;
       • That the applicant has determined that any proposed contractors
         are not suspended or debarred; and
       - The proposed costs appear reasonable.
     - The GMO may also be reviewing the costs from a reasonableness
      standpoint.                                  -
     - If the applicant is proposing to award a sole-source contract, they
       must provide their reasoning so that the PO and GMO can
       determine if there is adequate justification.
     - For Indirect Costs, the applicant must provide a copy of its current
       approved indirect cost rate.  EPA will not allow a recipient to draw
       down on indirect costs unless they have an approved, current rate.
       The GMO wilt verify that the applicant has an approved rate. (If not,
       the GMO will condition the award to limit the applicant's ability to draw
       down indirect costs until a final rate is approved by the applicant's
       Cognizant Federal Agency)

      9/30/93                    3.13

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 VIEWGRAPH # 9 (Continued)
 TITLE:          SF 424 - Budget Information

 KEY POINTS:


    Section C -  Non-Federal Resources includes a list of funding sources and
    amounts other than those provided by EPA or other Federal agencies. If
    the applicant is required to cost share, this section is where those costs will
    be shown. For universities of higher education and other non-profits, there
    is a minimum 5% cost share (unless a statute or program requires a higher
    cost share or an approved deviation has waived the requirement). For all
    other recipients, the amount of the cost share, if any, will be determined by
    statute or by program regulations or guidance.

•   Section D -  Forecasted Cash Needs shows the estimated rate of
    expenditures by quarter over the Fiscal Year. EPA does not generally
    require that its applicants complete this Section.
•   Section E -  Budget Estimates of Federal Funds Needed for the Balance of
    the Project provides useful information to estimate funds necessary for
    future years.
•   Section F - Other Budget Information is used to list and explain specific
    direct and indirect charges that appear in Section B. Space is also
    provided to  allow the applicant to clarify other parts or sections of the
    application.
        9/30/93                    3.14

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                         COST SHARING
              • Requirements Vary With
                Program
              • Only Allowable Costs Can
                Be Used
              • Cannot Use Federal
                Funds As Match
              * May Use In-Kind

VIEWGRAPH#3
TITLE:        Cost Sharing

KEY POINTS:

•   The amount of the cost share is specified in the regulations
    applicable to the program.
*   Cost sharing requirements may be required by statute (e.g., Air
    §105 grants), program policy (Superfund Technical Assistance
    Grants), or by regulation (5% minimum cost share for recipients
    subject to the provisions in 40 CFR Part 30.)
•   Appendix 14-A of the Assistance Administration Manual
    contains a list of the statutory/regulatory cost sharing
    -requirements.
•   Recipients can claim only allowable costs to meet cost sharing
    requirements.
•'   The Director, Grants Administration Division, may approve a
    deviation from non-statutory cost sharing requirements.
    Funds awarded under assistance programs of other Federal
    agencies cannot be used to meet EPA cost sharing
    requirements unless the other agency's legislation explicitly
    authorizes such use, e.g., Department of Housing and Urban .
    Development's Community Development Block Grant program,
    Sources of funds for recipient cost sharing are either:
    -  "In-kind" contributions e.g., facilities, equipment, materials,
       professional services, volunteer staff time provided by
       non-Federal public agencies, organizations, or individuals, or

  . - Cash.

   9/30/93                     3.15

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VIEWGRAPH # 3 (Continued)
TITLE:       Cost Sharing

KEY POINTS:
     If there is a cost sharing requirement, the recipient cannot decide
     which task, sub task, etc., is funded with Federal dollars and
     which is not. Each assistance-related dollar includes both the
     Federal and recipient shares. Recipients cannot avoid Federal
     statutory or regulatory requirements by separating their funds
     from Federal funds.
      9/30/93
3.16

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                ELIGIBLE, ALLOWABLE, REASONABLE,
                      AND ALLOCABLE COSTS

                 • ELIGIBLE - STATUTORY BASIS

                 • ALLOWABLE - PERMITTED BY
                   REGULATION, CIRCULAR, ETC.

                 • REASONABLE - PRUDENT PERSON
                   THEORY

                 • ALLOCABLE - BENEFITS
                   RECEIVED

VIEWGRAPH*?
TITLE:        Eligible, Allowable, Reasonable, and Allocable Costs

KEY POINTS:

     Eligible: To be eligible, the cost must be permitted by statute, program
     guidance, or regulations. The costs must also conform to any Federal
     limitations; (e.g., real property purchases under the Construction Grants
     program, mobile treatment systems under Superfund);

 •   Allowable:  To be allowable, the costs must meet the following general
     criteria:

     •  Be necessary and reasonable for the performance of the award;

     -  Be authorized by the appropriate Cost Principles;
     -  Be authorized, or not prohibited, under Federal, State or local laws or
       regulations;

     -  Be consistent with the recipient's policies, regulations, and
       procedures. The recipient must apply the same policies, regulations
       etc. to both Federally assisted and non-Federally assisted activities;

     -  Be consistent with Generally Accepted Accounting Principles;
     -  Not be included as a cost or used to meet cost sharing/matching
       requirements of any other federally financed program (unless
       specifically authorized by Federal law); and

     -  Be adequately documented.
      9/30/93                   3.17

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VIEWGRAPH #7 (Continued)
TITLE:          Eligible, Allowable, Allocable

KEY POINTS:

      Reasonable: A cost is reasonable if it does not exceed that which
      would be incurred by a prudent person under the circumstances
      prevailing at the time the decision was made to incur the cost.  To
      determine the reasonableness of a specific cost, consideration
      must be given to:

      -  Whether the cost is of a type generally recognized as ordinary
        and necessary for the operation of the organization or
        performance of the award.

      -  The restraints or requirements imposed by such factors as
        generally accepted sound business practices, arms length .
        bargaining, Federal and State laws and regulations, and
        terms and conditions of the award.

      -  Whether the individuals concerned acted with prudence under
        the circumstances, considering their responsibilities to the
        organization, its members, employees, and clients, the^public'afi
        large, and the Government.

      -  Significant deviations from the established practices of the
        organization which may unjustifiably increase the award costs.

      Allocable: A cost is "allocable" to an assistance agreement to the
      extent that it directly benefits the approved work, or to the extent it
      can be distributed in proportion to the benefits received.  A cost is
      distributed to a particular cost objective (e.g., assistance
      agreement, project, service, or other activity) based on benefit
      received by that cost objective.  A cost is allocable to an
      agreement if it is treated consistently with other costs incurred for
      the same purposes in tike circumstances and if it:

      -  Is incurred specifically for the award;
      -  Benefits the award and can be distributed in reasonable
        proportion to the benefits received; and

      -  Is necessary to the overall operation of the organization,
        although a direct relationship to any particular cost objective
        cannot be shown.
   9/30/93                    3.18

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           CRITERIA FOR APPROVING COSTS

               COM* Conform «e» MB Cost PrindplM

               CiMtt Conform to Applicable
              .COM* Conform to form* of AMittanc*
              AjM^MW^MVft
              AgTWmBrn


              Cora An bwumd Owing ttw Project
 VIEWGRAPH45
 TITLE:       Criteria for Approving costs

 KEY POINTS:
•   Each recipient must follow the Federal cost principles applicable
    to that type of organization. (See Module 2, for a list of the cost
    principles.)

    Recipients must maintain and report costs in accordance with
    the regulation that governs the agreement, i.e., 40 CFR 30.500
    and 40 CFR 31.20.

    The recipient cannot be reimbursed for costs that are contrary to
    the specific terms of the agreement or are outside its scope.
•   The recipient may only charge costs if they resulted from
    obligations made during the approved funding period.

•   Recipients may not be reimbursed for costs incurred before the
    Award Official signs the agreement unless pre-award costs are
    specifically allowed. EPA allows pre-award costs only in
    specific circumstances in the following programs:

    Construction Grants

    - The Award Official must specifically approve preaward costs
     before they are allowable. (See 40 CFR 35.2118 for the
     limitations of pre-award costs.)
Continuing Environmental Program Awards

    - EPA will reimburse the applicant for allowable costs incurred
     from the beginning of the budget period, provided such costs
     are contained in the approved application and that the
     application was submitted before the expiration of the prior
    - budget period.
    9/30/93        "           3.19

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VIEWGRAPH # 5 (Continued)
TITLE:        Criteria for Approving Costs

KEY POINTS:
     If an application is received before the end of the prior budget
     period, no deviation is necessary.               •

 •   If an application is not received before the end of the prior budget
     period, a deviation from 40 CFR 35.141 is necessary.

 Project Type Awards

 *   Recipients may charge to the award only those costs resulting
     from obligations incurred during the funding period.
     If the recipient incurs pre-award costs, they must obtain a
     deviation from the Director, Grants Administration Division before
     those costs can be charged to the agreement.  (See page 5.14 for
     a discussion of the deviation process.)
       9/30/93                     3.20

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                CLASSIFICATION OF PROPERTY
            Personal Property  Real Property   Intangible Property
 VIEWGRAPHI10
 TITLE:       Classification of Property

 KEY POINTS:

There are two types of personal property: equipment and supplies.
  Equipment
  - State, Local, and Indian tribal recipients must follow the definitions for
     equipment in Part 31.  Equipment is defined as items with a useful
     life of at least 1 year and an acquisition cost of $5,000 or more per
     unit.
  • For universities and non profits, equipment is defined as items with a
    useful life of at least 2 years and an acquisition cost of $1,000 or more
    per unit.
  Supplies.                          \-        '
  - Under all EPA assistance programs supplies are defined as tangible
    persona] property other than equipment.


Real property under all EPA assistance programs is defined as land,
including land improvements, structures, and right-of-ways, excluding
movable machinery and equipment.


Intangible property includes copyrights, rights in data, and patents.
  9/30/93                     3.21

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              ACQUISITION OF PROPERTY
               MUST BE AUTHORIZED IN
               ASSISTANCE AGREEMENT
             • MUST BE ACQUIRED DURING
               BUDGET/PROJECT PERIOD

VIEWGRAPH*11
TITLE:      Acquisition of Property

KEY POINTS:


     In order to purchase property under an assistance agreement,
     it must first be authorized in the agreement.

     Recipients may purchase property only during the
     budget/project period of the assistance agreements.
 •   The title to personal property purchased under an assistance
     agreement is always vested with the recipient; however, EPA
     reserves the right (in condition(s) to the agreement) to
     transfer title to another entity within 120 days after the end of
     the project. Also, EPA has an "interest" in the property equal
     to the percent of Federal funds in the property, e.g., if the
     match is 90% Federal and 10% recipient, EPA has a 90%
     "interest" in the property and at time of disposal, EPA gets
     90% of the proceeds from the sale.  If EPA gets the property,
     EPA owes the recipient 10% of the proceeds from the sale.
 *   When Federally owned property is provided to the recipient,
     the title remains with the Federal government.
     The title to supplies also vests with the recipient.
   9/30/93                   3.22

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                          ASSURANCES
                           Standard Form 424-B Does the Following:
                 SF424-B
                 Applicable
                 laws

                 Assurance
                 of compliance
 Outlines Applicable Federal Laws
 for Applicants
* Assures EPA of an Applicant's
 Compliance with Applicable
  Federal Requirements
VIEWGRAPH #  12
TITLE:          Assurances

KEY POINTS:
    The purpose of the assurances in the SF 424B is to emphasize to the
    applicant the Federal laws and requirements which are applicable to
    all Federally assisted projects, i.e., "crosscutting" requirements.

    The applicant must sign this page as well as the Facesheet.  Usually,
    the same person signs both places, but whoever signs must have
    the authority to bind the organization to the terms of the
    agreement.

    By signing the Assurance page, the applicant is indicating they will
    comply with each of these requirements. Some of the major
    requirements the applicant is agreeing to are:
    - They will complete the project within the time specified in the
      agreement.

    - They will comply with all applicable Federal laws, regulations, and
     policies.

    - They have the financial, managerial, and legal authority to complete
      the project.
                  <'                                     *
    - The person signing the form is authorized by their governing body to
      sign .the application as the official representative.
     9/30/93
   3.23

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                 PROJECT NARRATIVE/
                       WORKPLAN
              PROJECT NARRATIVE
                                 Describes the History of
                                 the Problem, and
                                 Proposed Actions
                                 Indicates Compliance
                                 with Regulatory
                                 Requirements
 VIEWGRAPH#13
 TITLE:        Project Narrative/Workplan                 :
                                                        ^ ••-.' ,
 KEY POINTS:
                                                        '   y
*   The approved project narrative/workplan is the basis for making an
    award and is used by the PO to manage and evaluate performance
    under the agreement.
    A narrative/workplan must be included as part of the application,  it
    should justify proposed financial, facility, equipment, and resource
    needs and provide technical and other information required by
    program-specific regulations/requirements.
    The narrative/workplan also must describe the need for the
    project/program, its objectives, the method to accomplish the
    objectives, the geographical location of the project, and the "public"
    benefits or results expected to be obtained from the assistance.
••   The PO performs a technical review of the narrative/workplan. If the
    PO does not have the technical expertise to perform the review, they
    must obtain assistance from other EPA staff with the expertise.
•   The PO may negotiate the narrative/workplan. The negotiation should
    be a two-way process to accommodate applicant needs and  practices,
    as long as they do not conflict with Federal and/or EPA program
    requirements/priorities.
     9/30/93
3.24

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VIEWGRAPH # 13 (Continued)
TITLE:         Project Narrative/Workplan
KEY POINTS:
 •   An effective narrative/workplan:
     - Will list expected outputs;                 .
     - Quantify outputs;
     - Link outputs to funding;
     - Identify target dates and milestones,
     - Require periodic reporting, and
     - Explain how the activities will be accomplished.
     The workplan for each Continuing Environmental Program must
     also:
     - Specify work years and amount and source of funds,
     - Identify the agency responsible for each of the outputs, and
     • Discuss performance to date under the existing award.
  9/30/93                    3.25

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                 CERTIFICATIONS

            . PROCUREMENT SYSTEM
             CERTIFICATION

            • ANTI-LOB BYING

            . SUSPENSION AND DEBARMENT

            • DRUG-FREE WORKPLACE
VIEWGRAPH#14
TITLE:         Certifications

KEY POINTS:

     The applicant must make the following certifications.
 •   The Procurement System Certification Form (EPA Form 5700-48)
     indicates whether or not the applicant will follow its own procurement*
     system (provided system(s) comply with EPA requirements).
     - If the applicant indicates it will not follow its own system (either
       because that system does not comply with EPA's requirements or
       because the applicant does not wish to certify), they are required to.
       follow 40 CFR Part 31 (local governments and Indian tribes) or 40
       CFR Part 33 (universities of higher education and other non-profits).
       By not certifying, the applicant also is agreeing they will allow EPA to
       conduct a preaward review of proposed contract awards.
     - The form does not apply to State governments except under the
       Superfund program (see 40 CFR 35.6550(a».
     The Ami-lobbying requirements in 40 CFR Part 34, require that
     applicants certify that no appropriated funds will be expended to pay
     any person for influencing or attempting to influence an officer or
     employee of any agency, a Member of Congress, an officer or
     employee of Congress, or an employee of a Member of Congress, in
     connection with any Federal award in excess of $100,000. 40 CFR
     Part 34 requires that the Standard Form LLL. "Disclosure of Lobbying
     Activities."  be submitted by recipients and applicants if they used
     non-Federal funds to "lobby" in relation to certain Federal contracting
     and financial transactions. This form is  not required if the entity did not
     "lobby" for the grant.
     9/30/93                    3.26

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VIEWGRAPH # 14 (continued)
TITLE:         Certifications

KEY POINTS:

•   Suspension and Debarment are methods which can be used to keep "bad
    actors" from receiving Federal funds.  Suspended or debarred entities are
    listed in the General Services Administration's publication, "Lists of Parties
    Excluded from Federal Procurement and Nonprocurement Programs."  .
    The Program Offices should be either subscribing to this publication, or
    determine who has a current listing they can check against.  In the
    Regions, this will probably be the GMO or the Regional Counsel's office. In
    Headquarters, the Grants Operation Branch has a copy of the List.
    - Debarment requires a formal investigation, notification,  a hearing, and
      (if requested) an appeals process before the EPA Debarment Official
      (Director of the Office of Grants and Debarment) can debar someone.

    • Suspension is an immediate temporary action taken to protect the
      Federal government and/or public interest pending the completion of an
      investigation or ensuing legal or debarment proceedings. The EPA
      Debarment Official is the only person that can suspend someone.
•   The Drug Free Workplace Act of 1988 requires contractors and recipients
    of Federal funds to certify that they will provide a drug-free workplace.
    The Act applies to all Federal assistance programs and contracts,
    regardless of value. No separate certification form is required. The
    applicant certifies by signing the application.
      9/30/93                    3.27

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                   QUALITY ASSURANCE/
                     QUALITY CONTROL
                             Recipient* are Required to Develop a QAPP.
                               A QAPP Outline* Procedure* for
                                    I Quality In Environmental
                                   ing
                               The Application Mutt Include Either •
                               QAPP or • Schedule lor Its Development
                               A QAPP Must be Approved Before
                               On-elte Sampling Can Begin
VIEWGRAPH # 15
TITLE:       Quality Assurance/Quality Control

KEY POINTS:

 •   If a project involves environmentally related measurements or data
     generation, the applicant must develop and implement quality
     assurance practices. These practices consist of policies,
     procedures, specifications, standards, and documentation which will
     produce data of sufficient quality to meet project objectives and will
     minimize loss of data due to out-of-control conditions or
     malfunctions.

     If the applicant has an EPA approved quality assurance program
     plan and it covers the project in the application,  they need only
     reference that plan, in their application.

 •   The quality assurance program plan must be acceptable to the
     Award Official in order to receive an award.

     Quality Assurance Program Plan: A formal document which
     describes an orderly assembly of management policies, objectives,
     principles, organizational responsibilities, and procedures by which
     an agency or laboratory specifies how it intends to:
     • Produce data of documented quality, and
     - Provide for the preparation of quality assurance project plans and
      standard operating procedures.

      9/30/93                    3.28

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VIEWGRAPH #15 (Continued)
TITLE:       Quality Assurance/Quality Control


KEY POINTS:

    Quality Assurance Project Plan: An organization's written .
    procedures which delineate how it produces quality data for a
    specific project or measurement method.
    If an applicant is unfamiliar with EPA Quality Assurance (QA)
    requirements, the PO should direct them to the appropriate QA
    office in Headquarters, laboratories, or the Region.
•   QA requirements by type of applicant:

    • If the application is for research financial assistance, the
     application  must include a QA narrative statement which either
     addresses certain areas or provides justification why any areas
     do not apply (see 40 CFR 30.503(d)).
    - If the application is from a State or local government (except for
     a Wastewater Treatment Construction Grant or Superfund) the
     applicant must submit a QA program plan.
    • All other applicants must submit a QA project plan with their
     application. (Under the Superfund program a recipient may not
     begin  field work before EPA approves the plan.)

    The requirements for quality assurance are contained in 40 CFR
    Part 30 for universities and other non-profits, and in 40 CFR Part
    31.45 for States, local governments, and Indian tribal
    governments.
       9/30/93                    3.29

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                  APPLICATIONS INVOLVING
                 INTERNATIONAL ACTIVITIES
                             • ALL APPLICATIONS
                              THROUGH AA FOR IA

                             • STATE DEPARTMENT
                              REVIEW MAY BE NECESSARY
VIEWGRAPH#16
TITLE:        International Activities

KEY POINTS:                                              v

*   All applications which an Approval Official recommends be funded
    (grants, cooperative agreements, and Interagency Agreements) that
    contain a substantial international component must be:

    • Approved by the Assistant Administrator for International  Activities; and

    • Submitted to the Department of State for clearance. A minimum of 35
     calendar days must be allowed to obtain State Department clearance.
     The OIA will submit the applications to the Department of State.
*   The Program Office is responsible for sending a copy of the application to
    OIA for approval. This approval must be obtained before the Program
    submits the funding recommendation to the GMO.

•   The Assistant Administrator for International Activities will review each
    proposal with a substantial international component to determine whether
    it is in accordance with the EPA and US Government international
    Environmental Mission as well as EPA's and the US Government's overall
    relationship with the foreign country concerned.

    If you have any questions, please call Stephan Kovash, Office of
    International Activities, Washington. His number is 202-260-4799.
       9/30/93                   3.30

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                   PROJECT OFFICER
                      ROLES AND
                   RESPONSIBILITIES
             • PROVIDE TECHNICAL EXPERTISE
             • APPROVE BUDGEt/WORKPLAN
             • WORK WITH APPLICANT
             • DETERMINE GRANTS VS CONTRACTS ISSUES
             • DETERMINE GRANTS VS COOPERATIVE AGREEMENT
              ISSUES


VIEWGRAPH#17
TITLE:         Project Officers Roles and Responsibilities
               Preapplication/Application
KEY POINTS:

 •   In this phase, the  PO is responsible for:

     - Determining the appropriateness of the workplan (narrative)
       activities, whether they comply with program regulations and
       guidelines, and identifying any deficiencies in the application.
     - Comparing proposed work with other similar efforts the PO is aware
       of and ensuring  that any overlap or duplication is absolutely
       necessary, e.g., in research, some duplication may be beneficial.

     : Informing the prospective applicant that EPA does not pay for costs
       incurred before an award is made (except in limited circumstances,
       seep. 3.10)
     - Informing the prospective applicant that there is no. obligation by
       EPA to fund the proposal.
     • Negotiating the  level of funding within constraints of the available
       funds.
     - Providing the prospective applicant with the Catalog of Federal
       Domestic Assistance (CFDA) number for the assistance program,  if
       applicable,   if in doubt, the PO should contact the GMO.

      - Notifying the GMO of anticipated applications/solicitations and
       receipt date. This will help the GMO plan their work and may help
       avoid unnecessary delays in making the award.
    9/30/93                     3.31

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VIEWGRAPH # 17 (Continued)
TITLE:         Project Officer Roles and Responsibilities
               Pre-application/Application

KEY POINTS:

     - Making the initial determination whether an assistance agreement
      or a contract should be used. (The GMO will also review the
      decision when they review the award package.) The Program's
      rationale for deciding that an assistance agreement is appropriate
      must be included in the Decision Memorandum.

    - Determining if there will be substantial Federal involvement and if
      so, developing a condition to include in the cooperative agreement
      identifying the substantial involvement.
    • Serving as primary program and technical resource to the
      Selection Panel, if one is used, regarding program policy,
      objectives, and goals.
    - Reviewing the application (along with the QMO) to assure .that the
      work plan is consistent with the budget, e.g., whether any
      proposed procurements or property purchases are necessary and
      reasonable.

    - Obtaining required in-house and/or extramural reviews of the
      application.

    - Cautioning the applicant against making an award or permitting
      any award (subgrant or contract) at any tier to any party which is
      debarred or suspended or is otherwise excluded from or ineligible
      for participation in Federal assistance programs. (The applicant
      must also submit a Debarment Certification with the application.)

    - Conducting  preaward or post award site visits as necessary to
      evaluate programmatic capability.
    - Ensuring the Approval/Decision Official informs the applicant and
      the GMO if the application will not be funded.
    9/30/93                    3.32

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             GMO ROLES AND RESPONSIBILITIES
               PRE-APPUCATION/APPLICATION
                            PHASE
              .OFFICIAL RECEIPT POINT FOR APPLICATIONS
              • PROVIDE ADMIM STRATIVE EXPERTISE
              • REVIEW APPLICATION FOR ADMINISTRATIVE
              ISSUES
              • COMMUNICATE ADMINISTRATIVE ISSUES TO
              APPLICANT

VIEWGRAPH* 18
TITLE:        GMO Roles and Responsibilities
               Preapplication/Application

KEY POINTS:

    In this phase the GMO is responsible for:
    - Developing and distributing application kits.

    - Responding to the prospective applicant's administrative questions
      and issues.
    - Receiving, logging in the formal pre-application/application, and
      distributing a copy to the PO for their programmatic review.
    - Reviewing the application (in conjunction with the PO) to ensure that it
      is complete and complies with EPA's administrative requirements.
     - Performing a cost review of the budget to ensure that the costs are
      allowable and are adequately supported. This may require working
      with the PO to obtain additional information.

    • Notifying the recipient if any administrative deficiencies are found in
      the application and working with the applicant to resolve the issues.
    - Conducting a review of the applicant's management systems
      (procurement, property, administrative and financial - with the FMO),  if
      necessary.

    - Reviewing the program decision to ensure that an appropriate
      instrument is proposed and determining that an assistance agreement
      rather than a contract is the appropriate funding instrument.
    9/30/93                    3.33

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                             OTHER PLAYERS
                       ROLES AND RESPONSIBILITIES
                  PRE-APPLICATION/APPLICATION PHASE

                        • APPLICANT

                        • FMO

                        • OGC/ORC

                        • MBE/WBE COORDINATOR

V1EWGRAPH # 19
TITLE:        Applicant Roles And Responsibilities     .
              Preapplication/Application
KEY POINTS:


       In this phase, the applicant is expected to:

       - Seek informal/formal assistance to answer questions concerning
        the technical or administrative requirements,
       - Respond to inquiries from the PO and GMO concerning the
        application,
       - Revise the application based on comments received from the PO
        and GMO, and
       - Comply with Executive Order 12372  intergovernmental review
        requirements, if required.                              .
       In this phase, the FMO is responsible for:
       - Responding to any request for assistance from the applicant to
        establish or improve the recipient's financial management system.
       - Determining whether to use the EPA/Automated Clearinghouse
        Payment System, advance payment, or reimbursement by Treasury
        check to pay the  recipient.
       in this phase, the PO or GMO may need the assistance of the Office
       of Genera! Counsel/Regional Counsel if legal issues arise. For
       instance, if it is unclear whether the award should be a contract, grant
       or cooperative agreement, it may be necessary for the GMO to get
       OGC/ORC's legal opinion.  Also, if there is a question over who is
       eligible or if certain activities are eligible, OGC/ORC may be able to
       help the PO make the  decision.
        9/30/93                   3.34

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 IEWGRAPH #19 (Continued)
 ITLE:      Other Players Roles and Responsibilities
             Application/Preapplication Phase

KEY POINTS:
    In this phase, the Regional or Headquarters MBE Coordinator may
    negotiate with the applicant to determine the Fair Share percentage
    the applicant will use if EPA makes an award.  If this negotiation
    does not take place during this phase, it must be done during the
    award phase.
    - The MBE Coordinators are responsible for negotiating the Fair
     Share objectives with each recipient. The recipient must agree to a
     Fair Share percentage before they award any contracts under the
     assistance agreement. The Fair Share is the percentage of contract
     awards that the recipient will try to award to MBE/WBE contractors.
    - Each Region has a Regional MBE Coordinator who should be
     contacted for questions on regional assistance agreements. The
     MBE Coordinator in Headquarters is in the Grants Administration
     Division.  If there are questions on Headquarters awarded awards',
     this individual should be contacted. See Appendix   for a list of the
     Headquarters and Regional MBE Coordinators.
        9/30/93     "               3.35

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    ASSISTANCE
  PROJECT OFFICERS
  TRAINING COURSE
MODULE IV

  AWARD

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                     THE ASSISTANCE AGREEMENT:
                            AWARD PHASE
                 RESPONSIBILITIES OF DIFFERENT OFFICES


                 DIFFERENCE BETWEEN PROGRAM
                 APPROVAL AND THE AWARD DECISION
               • PREPARATION OF FUNDING
                 RECOMMENDATION AND THE ASSISTANCE
                 AGREEMENT
VIEWGRAPH#1
TITLE:        The Assistance Agreement: Award Phase


KEY POINTS:

     This module discusses the award stage of funding an application.
     The award stage consists of making the program and award
     decisions; preparing the funding recommendation package and
     the assistance agreement; notifying the Congressional delegation,
     various EPA offices, and the recipient, and executing the
     assistance agreement.
     During the award phase, the PO and the GMO must prepare
     various documents, including the funding
     recommendation/Decision Memorandum and the assistance
     agreement.
   9/30/93                      4.1

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                   OVERVIEW OF THE AWARD PHASE
               OAOnodtaft*
VIEWGRAPH #2

TITLE:  Overview of the Award Phase
KEY POINTS:
    The award phase of assistance administration consists of seven stages,
    as illustrated.

    The program office (Approval/Decision Official) approves an application
    for award and and obtains funding approval.

    All funds must be entered into IFMS. In the Regions, the FMO commits,
    records and obligates funds, in Headquarters, GOB and QIAB obligate
    the funds.
    The program office prepares and forwards its funding recommendation
    package to the GMO.
    The Senior Resource Official will review all program grants and State
    Revolving Fund grants over $5 million, and all other awards over $1
    million to ensure that the proper funding mechanism is being proposed
    and, if there was no competition, there is adequate justification for not
    competing the award.
 9/30/93
4.2

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  VIEWGRAPH # 2 (Continued)
  TITLE:       Overview of the Award Phase
  KEY POINTS:

  •   The GMO prepares the assistance agreement and forwards it to the
      Award Official.  The GMO must also verify commitments against
      data in IFMS (Prevalidation ) before the Award Official signs the
      award.
      Once the Award Official signs the assistance agreement, the GMO
      informs the Grants Administration Division which, in turn, informs
      the Congressional and Legislative Affairs, which is responsible for
      notifying the appropriate House and Senate members.
      After the 5 workday Congressional notification hold period has
      passed, the GMO mails the award offer to the applicant for their
      signature.
9/30/93                        4.3

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                             COMPONENTS OF
                               THE AWARD
                                               Assistance
                                               Application
                                               Assistance
                                               Applicable
                                               Regulations
VIEWGRAPH #3

TITLE:      Components of the Award
KEY POINTS:
      The award includes the following:
      (1) EPA Assistance Application, including the approved
          workplan/narrative (by reference)
      (2) EPA Assistance Agreement (EPA Form 5700-20/20A), including
          any Terms and Conditions, and/or any Special Conditions for
          "High Risk" applicants.
      (3) EPA regulations (by reference)
  9/30/93
4.4

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                         PREPARATION OF THE
                       FUNDING RECOMMENDATION
                 FUNDING RECOMMENDATION
               (1) AMManet Funding CMtr
                 (EPAFonnSTW-U)
                 ContfiulnMnt NQVKMI
                                   0
(3) Dw
                           lon
  (tacMxt Memorandum (If •ppti
                             Including
                             f •ppticabta)
VIEWGRAPH #4
TITLE:       Preparation of the Funding Recommendation

KEY POINTS:
    The Program Office prepares and forwards to the GMO the:

    - Funding Order (EPA Form 5700-14), if required by the GMO;

    - Commitment Notice (EPA Form 2550-9), if required by the GMO;
      and

    - Decision documentation.

    The Funding Order (signed by the Approval Official) identifies the
    approved funding amounts and the name of the assigned Project
    Officer. The Funding Order provides the GMO with the financial
    information needed to prepare the award document.  The PO is
    responsible for attaching any special payment or reimbursement
    requirements. In some Regions, the program may provide this
    information in a Decision Memorandum.

    The Commitment Notice is used to reserve funds.
 9/30/93
                4.5

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VIEWGRAPH # 4 (Continued)
TITLE:       Preparation of the Funding Recommendation

KEY POINTS:

  The decision documentation (Decision Memorandum) recommends
  award.  This documentation must also include:
  • What actions the Program wants the GMO to take, e.g., transfer
    funds among categories, make an award, approve equipment, etc.
  •• Statutory authority for the award;
  - Objectives of the project/program;
  • Summary of review(s) and reconciliation of issues identified in any
    reviews;                                              ;
  - Delegation of Authority number;
  - Total amount of the award;
  - Amount of Federal funds;                               ;
  - Budget/project period;
  • Statement that the award should be awarded as an assistance
    agreement and a brief statement why (e.g., statute requires, direct
    beneficiary);

  - If the award is to be a cooperative agreement, what the substantial
    Federal involvement will be;
  - Whether QA/QC approval is necessary and whether EPA has given
    that approval and

  - Specific program conditions to be added to the award, e.g., need
    quarterly progress reports rather than annual; need specific PO
    approval before recipient starts specific tasks/activities; equipment
    disposition, if applicable.
9/30/93     .                   4.6

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                    CONDITIONS IN THE
                ASSISTANCE AGREEMENT
              Terms and
              Conditions
              Special Conditions
VIEWGRAPH45
TITLE:        Conditions in the Assistance Agreement
KEY POINTS:

  *   Terms and Conditions and Special Conditions are the additional *
      requirements that will govern an award. These are either spelled out
      directly in the assistance agreement or are incorporated by reference
      (such as the administrative regulations).
  Terms and Conditions:
      Each recipient is subject to certain terms and conditions.  These
      include all applicable provisions of Title 40 of the Code of Federal
      Regulations as well as other pertinent laws and regulations.
      Terms and conditions of a programmatic nature, for example, include
      restricting work on a part of the project until specific milestones are
      met, restricting certain activities until qualified personnel are hired, and
      specifying the frequency & content of progress reports.

      Terms and conditions of an administrative nature may include
      requirements which:
      - Are not in a regulation because the requirement was implemented
        after the regulation was last changed, e.g., recycled paper, the 8%
        DBEplan, or
      - The requirement is added to emphasize a requirement for a particular
        project, recipient, or group of recipients, e.g., the approved indirect
        cost rate.
  9/30/93                        4.7

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VIEWGRAPH # 5 (Continued)
TITLE:       Conditions in the Assistance Agreement

KEY POINTS:


       •   Terms and Conditions need to be clear and specific.

           in the case of Cooperative Agreements, EPA's "substantial
           involvement" is spelled out either in the terms and conditions section or
           in the approved application's narrative/workplan, which becomes part of
           the award. For Headquarter's awarded Cooperative Agreements, the
           "substantial involvement" must be included in the Terms and
           Conditions.

       High Risk Applicants

           In some cases, EPA may determine that a recipient is a "High Risk"
           recipient and should, therefore, be subject to certain "Special  .
           Conditions."
       •   A recipient is considered "high risk if it:

           -  Has a history of unsatisfactory performance;          -
           -  Is not financially stable;

           -  Has a management system which does not meet the management
            standards set forth in EPA administrative regulations;

           -  Has not conformed to the terms and conditions of a previous award;
            or

           -  Is otherwise considered "not responsible" by the Award Official.
           For "High Risk" recipients, the following Special Conditions may be
           included in the assistance agreement:
           -  Paying on a reimbursement basis;

           -  Withholding authority to proceed beyond one phase without proof of
            acceptable performance;
           -  Requiring the recipient to furnish specially detailed financial reports;
           -  Providing additional project monitoring;

           -  Requiring the recipient to obtain technical or management
            assistance; or
           - Establishing additional prior approvals.
   9/30/93                        4.8

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                           EXECUTION OF
                    THE ASSISTANCE AGREEMENT
          Award Official
             Signs
                    Appropriate
                  Notifications ar
                      Mad*
                             AQr09flfflSn* I
                              issued to
                              Recipient
                                       Racipiant
                                        Signs
                                       Affraamant
                                               Countersigned

                                               Ratumad to EPA
VIEWGRAPH#6
TITLE:        Execution of the Assistance Agreement
KEY POINTS:

     Executing an agreement involves obtaining signatures from both
     parties to the agreement  This illustration describes the primary steps
     involved in fully executing an assistance agreement.
 *   When the Award Official signs the assistance agreement, EPA
     assumes its share of the legal obligation and incurs a fiscal obligation
     as well.
 • .  Next, the GMO sends the necessary Congressional Notification
     information and forwards it to the Grants Information and Analysis
     Branch, Grants Administration Division in Headquarters who sends
     the information to the Office of Congressional Liaison (OCL) and to
     other concerned offices.
     The OCL notifies the appropriate Congressional representative or
     designee.

     Once the five-day Congressional notification requirement is met, the
     GMO mails the award offer to the recipient.

 •   In emergencies, the five-day hold (workdays) for Congressional
     notification may be waived pursuant to OCL procedures.
     Once a recipient signs an agreement and sends it back to the
     the recipient assumes a legal obligation to perform all of the activities
     listed in the agreement, in the timeframe agreed to, and for the dollar
     amount specified.
 9/30/93
4.9

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                        PROJECT OFFICER
                           ROLES AND
                        RESPONSIBILITIES

               • PREPARE FUNDING PACKAGE

               • OBTAIN PROGRAMMATIC
                 CONCURRENCES

               • ESTABLISH THE OFFICIAL PROJECT
                 FILE

               • REVIEW THE AWARD DOCUMENT
   VIEWGRAPH#7
   TITLE:        Project Officer Responsibilities


    •    In this phase, the PO is responsible for:

        - Preparing a funding package consisting of the: Decision      -
         Memorandum; Funding Order (EPA Form 5700-14), if required
         by the Grants Management Office; and Commitment Notice
         (EPA Form 2550-9), if required by the Grants Management
         Office.

        - Obtaining the necessary programmatic concurrences and
         signatures on the funding package and sending the package to
         the next level in the concurrence chain.

        - Obtaining Office of International Activities'approval for all
         international awards.

        • Obtaining the Office of Research and Development's Office of
         Health Research approval for all projects involving human
         subjects.

        - Establishing an official file for the project (see Appendix ).
9/30/93                       4.10

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                 GRANTS MANAGEMENT OFFICE
                         ROLES AND
                      RESPONSIBILITIES

               • REVIEW FUNDING PACKAGES

               * PREPARE AWARD DOCUMENT

               • ASSURE COMPLIANCE WITH
                CONGRESSIONAL NOTIFICATION

               * SEND AWARD OFFER TO
                 APPLICANT
 VIEWGRAPH#8
 TITLE:        Grants Management Office Roles and
                Responsibilities

 KEY POINTS:

     In this phase, the GMO is responsible for:

     - Ensuring that all elements of the application and funding package
      meet legal and regulatory requirements.
     - Reviewing the funding package and assuring it is complete and is
      signed by authorized officials.
     - Assuring that there is a Commitment Notice and verification of
      available funds.
     - Assuring the agreement contains all required administrative and
      program conditions, and any Special Conditions for a "High Risk"
      recipient.
     - Preparing the award/amendment document (EPA Form
      5700-20A/B).
     - Forwarding the award package to the Award Official for signature.
     - Assuring compliance with the Congressional Notification
      requirements.
     - Verifying the Indirect Cost Rate.
     - Mailing the award offer to the applicant.
     - Confirming the statutory authority and delegation of Authority.
     - Assuring appropriate funding mechanism.
9/30/93          '            4.11

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                       OTHER PLAYERS
                          ROLES AND
                       RESPONSIBILITIES

                  •  APPLICANT/RECIPIENT

                  •  FINANCIAL MANAGEMENT

                  •  SENIOR RESOURCE OFFICIAL

                  •  OGC/ORC

                  •  MBE/WBE COORDINATOR

VIEWGRAPH39
TITLE:       Other Players Roles And  Responsibilities

KEY POINTS:

  Applicant/recipient Roles and Responsibilities            ;

      In this phase, the applicant is  responsible for'signing the award
      offer, or requesting a time extension, within 3 weeks of receipt. If
      the applicant does not sign the award within 3 weeks, the Award
      Official may withdraw the offer (see 40 CFR Pan 30 and EPA
      policy.)
  Financial Management Office Roles and Responsibilities

  •   The FMO will record an obligation in the Integrated Financial
      Management System (IFMS) immediately after receiving the
      signed agreement from the  Award Official.

  Senior Resource Official
  ••   The SRO will be reviewing and concurring on funding
      recommendations for awards  over certain dollar amounts.

  Office of General Counsel/Regional Counsel
      OGC/ORC may have to become involved in contracts versus
      assistance decisions, eligibility of activities, etc.
  Minority Business Enterprise (MBE) Coordinators
  •   If not already done, the MBE Coordinators will have to negotiate
      the Fair Share percentage if the award includes funds for
      equipment, supplies, or construction.
 9/30/93                      4.12

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        ASSISTANCE
      PROJECT OFFICERS
      TRAINING COURSE
      MODULE V

PROJECT ADMIN & MGT

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                     OVERVIEW
           PO RESPONSIBILITIES IN THIS PHASE INCLUDE:

           * MONITORING RECIPIENT PERFORMANCE

           * REVIEWING REPORTS

           • PROVIDING TECHNICAL ASSISTANCE

           • REVIEWING MODIFICATION (AMENDMENT)
            REQUESTS

           • HANDLING DEVIATIONS/DISPUTES

           * RESPONDING TO NONCOMPUANCE BY
            RECIPIENT

V!EWGRAPH#1
TITLE:       Overview

KEY POINTS:

     This module discusses the genera! responsibilities of GMOs,
     POs, and FMOs during project administration.
     Generally, the GMO serves as a source of administrative
     oversight for all EPA assistance agreements.  However, the
     GMO also serves as the liaison between the region's Project
     Officer and FMO, and the recipient's project manager and
     administrative staff with regard to the administrative aspects
     of assistance.
     The Project Officer serves as EPA's technical manager and
     liaison with the recipient's project manager on all matters
     relating to project performance.
     The Project Officer serves as a source of programmatic
     oversight (on-site reviews; review/approval of progress
     reports; FSRs; payment requests; provides technical
     assistance if needed, etc.)
9/30/93                      5'1

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             MONITORING RECIPIENT PERFORMANCE

               > On-Site:

                 • Performance Reviews

                 - Technical Assistance

               • In-House:

                 • Reports

                 • Payment vs. Progress,

                 • Audit Follow-up


VIEWGRAPH#2
TITLE:       Monitoring Recipient Performance

KEY POINTS:

         The overall management of assistance agreements is a cooperative
         effort among the POs. GMOs., and FMOs. During projecVprogram
         administration, these monitoring duties must be performed as long as
         the agreement is active.

         Some monitoring activities may be the responsibilities of more than
         one EPA office to help ensure that potential problems are identified
         and proper corrective actions are taken.  Examples are:

         -  Monitoring the project or budget period end dates to ensure that
           the agreement is extended, if necessary, before the budget or
           project period expires.

         -  Monitoring recipient performance.

         -  Responding to allegations of mismanagement by recipient
           employees or others.

         -  Responding to audit reports on an assistance agreement.

         Besides audits, EPA performs a variety of other recipient monitoring
         activities, both on-site and "in-house" (at Headquarters or a Regional
         Office).
   9/30/93
5.2

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VIEWGRAPH # 2 (Continued)

TITLE:       Monitoring Recipient Performance

 EY POINTS:
  On-Site Reviews include the following:

  •    Mid-year and end-of-year reviews to evaluate recipient performance.
      These reviews are required under the "Performance Based Assistance
      Policy" for Continuing Environmental Program Grants, and are optional
      for the other programs.

  *    Technical Assistance reviews are used to help ensure the highest quality
      recipient management practices, and to avoid future audit findings and
      difficulties by ensuring recipient compliance with EPA regulations. These
      reviews also assist the recipient in implementing changes to their
      systems and processes in response to changing Federal requirements,
      and to follow up on these changes; and to clarify the specific regulations
      that govern the recipient's cooperative agreement
  In-House Reviews include:

  • Reports:

      - Financial Status Reports: The SF 269, "Financial Status Report" must
       be reviewed to ensure that the recipient uses EPA funds properly. This
       review is done by the GMO as well as the PO.  The PO should review
       the report in connection with the progress reports. If there appears to
       be a discrepancy between the financial information on the SF 269 and
       progress on the project/program, the PO should determine if there is in
       fact a problem, or if the discrepancy can be satisfactorily explained.
      - Progress Reports: The frequency of these reports will vary with the
       program. The frequency will usually be required in a regulation  or by
       program policy, but the reports should not be required more often than
       the program needs (However, they can not be required more often than
       quarterly). The content of the report will also vary with the program.
       Each program office must determine what information they need to
      adequately monitor the recipient's technical and financial progress.
      - The PO should review the recipient's progress against the rate of
       expenditure, and if there appears to be a problem, notify other EPA
      . offices to determine what steps need to be taken to correct the
       problem. (The progress report format should require the recipient to
       provide information on the rate of expenditure versus progress on the
       project, actual accomplishments, and any problems encountered
       during the performance period which may interfere with meeting
       program/project objectives.)
     9/30/93                       5-3

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VIEWGRAPH* 2 (Continued)
TITLE:       Monitoring Recipient Performance

KEY POINTS:
    - Payment Requests: Under the reimbursement payment
      system, the PO should review the request and determine that
      payment should be made. Under the ACH payment system,
      the PO will not be informed before the drawn down is made.
    Audit Follow-up
    - EPA uses its Management Audit Tracking System (MATS) to
      ensure complete and timely  follow-up on the resolution of all
      audit (or other review) findings and the completion of all
      corrective actions.
9/30/93                      5-4

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                    RECIPIENT  REPORTS
                Recipient Reports
VIEWGRAPH#3
TITLE:       Recipient Reports

KEY POINTS:
      A recipient must submit reports to EPA indicating the use of
      funds, the status of accomplishments, and recipient compliance
      with administrative and program requirements.

      The GMO is responsible for obtaining administrative reports
      required by the agreement, and will follow up if the reports are
      not received. Some of these reports may be sent directly to
      other EPA offices  e.g., MBE/WBE reports to the MBE
      Coordinator, which means that the PO and others should let the
      GMO know if the report was received on time.
      The PO is responsible for obtaining and reviewing
      programmatic reports to determine their adequacy.  If there are
      problems with the content of the report or the report is not
      received when required by the application, the PO should deal
      directly with the recipient. If the situation warrants, the PO
      should work the GMO to discuss what further action may be
      necessary.

      The POs and others who receive a report should let the GMO
      know when the report is received. During closeout, the GMO
      will be asking the other offices if all reports were received when
      requested and met EPA requirements.
  9/30/93
                              5.5

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                   PO RESPONSIBILITIES
                 FOR PAYMENT REQUESTS
               Advance Payment
               (EPA-ACHor
               Treasury Check)
               Reimbursement
               Payment
               (Treasury Check)
               Working Capital
               Advance
AUTOMATED

 CLEARING

  HOUSE
 VIEWGRAPH#4
 TITLE:       PO Responsibilities for Payment Requests

 KEY POINTS:

Automated Clearing House Payment System
    The Automated Clearing House (ACH) payment system is
    electronic funds transfer process initiated by EPA in response to
    Treasury's elimination of the Letter of Credit payment system.
*   If the recipient is on the ACH payment system, the PO and GMO
    will not generally see the requests for payment. The recipient
    sends the request directly to the FMO and EPA has 48 hours to
    disapprove the draw down.
    Therefore, under the ACH system, if the PO wants to restrict the
    recipient's drawn downs (e.g., cannot draw down above a certain
    percentage unti! a specific task or product is delivered), the PO
    must make this a condition of the award and inform the GMO
    and FMO of the limitation.
    To help the PO better manage a recipient paid under this system,
    the FMO can get a report from the Integrated Financial
    Management System (IFMS) which provides draw down
    information.  While this report shows only past draw downs, it can
    help the PO by providing information the PO can use along with
    the progress reports to keep track of the project/program.
    If there is a question on payments under the ACH payment
    system, the GMO and PO must decide if there is a need to restrict
    future  draw downs and if so, contact the FMO to decide on a
    course of action.
 9/30/93
                             5.6

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0VIEWGRAPH # 4 (Continued)
   TITLE:       Payment Process

   KEY POINTS:


     Reimbursement Payment System

         If the recipient is under a reimbursement payment system (for
         other than construction grants), the PO should review the
         recipient's request for payment (SF-270, Request for Advance or
         Reimbursement) and determine if the programmatic progress is
         consistent with the request for funds. If there is any question,
         the PO should contact the GMO and both should decide what
         action, if any, is necessary.

     •    If the recipient is requesting a reimbursement under construction
         assistance, the recipient must submit the request for
         reimbursement on SF 271, "Outlay Report and Request for
         Reimbursement for Construction Programs."
         The GMO reviews reimbursement payment requests for
         compliance with the cost sharing requirements of the agreement.
         The FMO is responsible for:
         - Processing payment requests,
         - Ensuring that payments to the recipient are proper and are
          made within a reasonable time after receiving the payment
          request. (For ACH recipients, however, EPA has 24 hours to
          deny a draw down.)

     Working Capital Advance
         If a grantee cannot met the criteria for the ACH payment method
         and the EPA determines that reimbursement is not feasible
         because the grantee lacks sufficient working capital, EPA may
         provide cash on a working capital advance basis. The advance
         covers the first funding period, thereafter, funds are disbursed on
         a reimbursement basis.
      9/30/93                      5-7

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                   CHANGES REQUIRING PRIOR APPROVAL/
                          FORMAL AMENDMENT
                • SITUATIONS WHICH APPLY
                 TO ALL RECIPIENTS

                • ADDITIONAL
                 REQUIREMENTS FOR
                 STATE, LOCAL AND INDIAN
                 TRIBAL GOVERNMENTS

                * ADDITIONAL
                 REQUIREMENTS FOR
                 NONPRORTS

 VIEWGRAPH#5
 TITLE:       Changes Requiring Prior Approval/Formal Amendment

 KEY POINTS:
                                           I  '
    Recipients are permitted to rebudget within the approved direct
    cost budget to meet unanticipated requirements and may make
    limited program changes to the approved project. However,
    certain post-award changes cannot be made without a forma)
    amendment to the agreement.
    A recipient's request for a change must be accompanied by a
    narrative justification for the proposed revision, and must be
    submitted to the PO.
    the PO should notify recipients in writing of disapprovals (with a
    copy to the GMO) of requests for changes.  This is necessary to
    answer any future claims against EPA because the recipient
    "thought" EPA had approved the change.
    The PO must forward to the GMO requests for changes requiring
    formal amendments. The PO must also include their
    recommendation for approval..
Changes Which Require a Formal Amendment
All recipients
•    Any revision resulting in the increase or decrease in funds.
    Transfer of funds allotted for training  allowances, i.e., from
    direct  payments to trainees to other expense categories.
•   Carryover of funds.

 9/30/93                      5.8

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VIEWGRAPH # 5 (Continued)
TITLE:       Changes Requiring Prior Approval/Formal Amendment

KEY POINTS:

     Rebudgeting funds from construction to nonconstruction
     activities, or vice versa.
     Revisions to the objectives of the project.
     Extensions to the period of availability of funds.
 State, local government, and Indian Tribal Governments
 *   Cumulative transfers among direct cost categories, or, if
     applicable, among separately budgeted programs, projects,
     functions, or activities which exceed or are expected to exceed
     10% of the current total approved budget, whenever EPA's
     share exceeds $100,000. (If less than $100,000, the recipient
     does not need prior written approval, but should discuss with the
     PO before doing.) For example, for a grant with an EPA share of
     $150,000, the recipient transfers $15,000 from one budget
     category to another, there is no requirement for prior approval. If
     the recipient then transfers $18,000 from one category to another
     (whether from the same category as before or not), the recipient,
     must obtain prior approval from the Award Official.
     Under nonconstruction projects, contracting out or otherwise
     obtaining services of a third party to perform activities central to
     the purpose of the award. (The procurement of equipment,
     supplies, and general support services are approved in the
     budget section.)
 *   Changes in key project personnel, if key personnel are
     identified in the agreement.  For research projects, this means
     a change in the project manager or principle investigator.

 Universities of Higher Education and other Non-Profits
     Transfer of an award from one recipient to another.
 •   Rebudgeting funds for indirect costs to absorb increases in direct
     costs.
  9/30/93                       5.9

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                  CHANGES WHICH DO NOT
                 REQUIRE PRIOR APPROVAL/
                    FORMAL AMENDMENT

            • Minor Adjustments to
              Methodology or Approach
            • Minor Adjustments to
              Project Budget
            • Staff Changes
VIEWGRAPH #6
TITLE:       Changes Which Do Not Require Prior Approval/
             Formal Amendment
                                                      . ?•?'-
KEY POINTS:

*   Recipients may need to change their projects to respond to
    changed conditions. Neither a formal amendment nor prior
    written approval is necessary for minor changes that are
    consistent with the project objective and within the scope of the
    agreement.  For example, recipients may, without prior written
    approval:         •
    - Make minor changes to the methodology, approach, or other
      aspects of the project to meet objectives or to expedite
      completion.
    - Adjust their project budgets (except for adjustments requiring
      formal amendments) provided they use the funds in
      accordance with the approved workplan/narrative, EPA
      regulations, and applicable cost principles.
    • Changes in the staff (other than key personnel), provided they
      will not affect the objectives of the project.
    However, the recipient should discuss these changes with the
    PO because EPA is not obligated to pay for any changes that
    result in cost overruns.
 9/30/93                     5-10

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                   TRANSFERRING AN AWARD

                Transfer By Award of
                New Assistance
                Agreement
                Transfer By

                Amendment
VIEWGRAPH # 7
TITLE:       Transferring an Award

KEY POINTS:
   Recipients may request that EPA transfer a project to another
   organization for a number of reasons, e.g., transfer of the Project
   Manager to another organization, reorganization, changes in the
   recipient organization's name.

   There are two ways to transfer an award (procedures for each
   may be found in Chapter 34 of the Assistance Administration
   Manual).

   - Terminate the existing award and make a new award.

   - Amend the existing award.
   If a legislative or other legal action (e.g., merger, divestiture,
   reorganization, or recipient name change) affects the status of
   the recipient, the Award Official may transfer the award to the
   new recipient or change the recipient's name by issuing an
   amendment.
  9/30/93
                               5.11

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                              DEVIATIONS


                     Deviation Raqutata Induda:
                     • Name, Attlatanca Identification
                      Numbar, Agraamant Data, and
                      'Award Amount
                     • Sactfon of Regulation From
                      Which a Davtatton is Naadad
                     • Daaeriptfon of Cireumatanoaa
                      and JustlflcatJona
                     • StafamantaatoWhathar
                      Similar DtvlationHaa Bam
                    - yadaPravtoualyforlhaProJaci
VIEWGRAPH#8
TITLE:        Deviations

KEY POINTS:

     Recipients are required to comply with all EPA requirements. In
     some cases, however, it may be necessary to "waive" (deviate) .....
     from a regulatory provision.  EPA does not have the authority
     to deviate from statutory or Executive Order requirements.

 •   The Director, Grants Administration Division is the person
     delegated by the Administrator to approve or disapprove
     deviations from regulatory provisions.

     Recipient deviation requests for Regional awards must be
     submitted in writing to the Region or delegated State agency, as
     appropriate.  The Region (generally the GMO), with input from the
     PO and the delegated State agency, as appropriate, then submits
     the request to the Director, GAD. Deviation requests should be
     submitted as soon as the need for the deviation is known,
     NOT AFTER THE FACT.
     Each request for a deviation must include:

     • The name of the applicant or recipient, the assistance
       identification number of the application (if available) or award,
       the date of the award, and the dollar value of the application or
       award and the amount in question.

     - The section(s) of the regulation from which a deviation is
       requested.
     - A complete description of the circumstances, a careful analysis
      .of the situation, justification for the deviation, an explanation of
       what the deviation will dp, and any pertinent background
       information, including a copy of the applicant's or recipient's
       request.

  9/30/93                       5'12

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VIEWGRAPH # 8 (Continued)
TITLE:       Deviations

KEY POINTS:

     - A statement as to whether the same or a similar deviation has
       been previously requested for the same project, and if so, an
       explanation as to why the previous request was made and the
       outcome.
     • If a deviation is requested for a project administered in a
    .   Regional Office, the deviation must also contain the Region's
       recommendation, including the delegated State's
       recommendation, if appropriate, and the name of a contact in the
       Regional Office who is most familiar with the request.
 ••   Deviations are approved or disapproved by the Director, Grants
     Administration Division.
     GMO internal procedures may vary, so PO's should contact their
     GMO to find out the required steps.

     The applicant may request a deviation before the agreement is
     awarded.  If a deviation is approved before award, the approval
     will be contingent upon the approval of the application and award
     of the assistance agreement.
  '   The Award Official must incorporate the provisions of any
     approved deviation in the agreement.                      .
     The GMO must retain a copy of each deviation decision in the
     official assistance file.  The PO should also keep a copy in the
     project file.                             .
     The Director, Grants Administration Division may reconsider the
     decision if that decision was based on incomplete information.
   9/30/93                       5.13

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                          DISPUTES
              Responsibility for Disputes
              Resolution

              Some EPA Actions not Subject
              to Review
VIEWGRAPH#9
TITLE:        Disputes
KEY POINTS:                                           ?:
  Whenever possible, disputes between EPA and recipients
  should be resolved  at the lowest level possible.           £
  Each Award Official (Regional and Headquarters) may
  designate one or more Disputes Decision Officials (DDO). The
  Disputes Decision Official is responsible for deciding
  disagreements between EPA and recipients (they may also
  decide disputes with applicants).
  The most frequent disputes are a result of recipient
  disagreements with audit findings.
  The following EPA actions cannot be disputed:
  - Denials of deviation requests (40 CFR  Parts 30 and 31).
  - Bid protest decisions (40 CFR Parts 31 and 33)
  - National Environmental Policy Act decision (40 CFR Part 6).
  - Audit Resolution Board decisions (EPA Order 2750).
  - Debarments/suspensions (40 CFR Part 29).
  For Headquarter awards, the disputee may request that the
  appropriate Assistant Administrator review the dispute and
  render the Agency's final decision. These requests must be
  sent directly to the Assistant Administrator.

9/30/93                       5'14

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VIEWGRAPH #9 (Continued)
TITLE:     Disputes

KEY POINTS:
    For disputes of Regional awards, if a recipient disagrees with a
    decision made by a Disputes Decision Official, the disputee may
    request a review by the Regional Administrator.  The Regional
    Administrator's decision is final unless the disputee requests a
    discretionary review by the Assistant Administrator of the affected
    program. If the Assistant Administrator does not elect to review the
    dispute, the Regional Administrator's decision is the final Agency
    action.  If the Assistant Administrator reviews the dispute, the
    Assistant Administrator's decision is the final Agency action.
  9/30/93
5.15

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                           EPA RESPONSE TO
                        RECIPIENT PERFORMANCE

                      • NONCOMPUANCE AND HIGH
                       RISK
                                                        , *
                      • PERFORMANCE-BASED
                       ASSISTANCE POLICY
 VIEWGRAPH#10
 TITLE:       EPA Response to Recipient Performance

 KEY POINTS:

    EPA officials are faced with a wide range of potential problems
    involving  participants in the assistance process. The participant may
    be an assistance recipient, a contractor, a subcontractor, or a
    supplier to a recipient. In some cases, the problem may involve a
    technical matter which can easily be resolved by informal discussions
    with the participant. At other times, the matter may involve
    nonperformance, poor performance, or a criminal matter which places
    the Agency's assistance programs at significant risk.        - •
•   To deal with noncompliance or high risk participants, Award Officials
    may impose special conditions on the award, find a person or
    organization non-responsible to receive an award, issue stop work
    orders, withhold payment of funds, terminate or annul an award, or
    initiate an investigation to determine if further action is necessary.
    Further, after all administrative remedies are exhausted, the Director,
    OGD, may suspend and/or debar any person or organization from
    participation in all EPA assisted activities for a specified period of
    time.
•   For Continuing Environmental Program grants, EPA developed a
    "Policy on Performance-Based Assistance" to ensure a consistent
    effort within the Agency to assess recipient performance against
    negotiated commitments, to reward accomplishments, and to correct
    problems (See Appendix K for a copy of the policy.)
    Because the remedies for recipient noncompliance may have
    ramifications outside the Agency, it is important that any Agency
    action be coordinated among the various offices concerned. Principal
    participants in the decision to take an action are the program office,
    GMO, and the Office of General Counse! or Office of Regional
    Counsel.  The Office of Inspector General (OIG) is also a key
    participant in suspension or debarment actions or where a matter
    may involve an audit or potential criminal wrongdoing.
   9/30/93    -                  5'16

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                        PROJECT OFRCER
                          ROLES AND
                        RESPONSIBILITIES
                • TECHNICAL EXPERTISE
                • DAY-TO-DAY MANAGEMENT OF
                 THE AGREEMENT
                • FOCAL POINT FOR PROGRAMMATIC
                 ISSUES

 VJEWGRAPH4M1
 TITLE:         Project Officer Responsibilities

 KEY POINTS:


    In this phase, the PO is responsible for:

    - Monitoring all activities and the recipient's progress on the project.
    • Reviewing progress reports and other deliverables to assure that
      the recipient is complying with the applicable regulations and the
      programmatic terms and conditions in the agreement. These
      products should be  reviewed for timeliness and completeness.  The
      PO must also track  the receipt of programmatic reports and
      deliverables and inform the GMO when reports and deliverables are
      received so that the GMO can keep track of deliverables in the grant.
    - Providing comments to the recipient on the progress reports and
      other deliverables and sending copies to the GMO if funding is
      potentially affected.
    • Providing technical  assistance to recipients when requested or
      required by terms and conditions of the award.
    - Maintaining the official technical project file and ensuring that it is
      complete.
    - Maintaining a record of communications with the recipient and
      providing, as appropriate, the GMO or other EPA offices with copies
      of pertinent correspondence to and from the recipient.
    - Advising the GMO whenever anything occurs which could endanger
      the successful completion of the project, and working with these
      offices to decide what actions need to be taken to assure that the
      project will be completed as designed, that funds are spent
      properly, and, if necessary, what sanctions would be appropriate.
9/30/93                      5-17

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VIEWGRAPH # 11 (Continued)
TITLE:       Project Officer Responsibilities

KEY POINTS:

    • Reviewing requests for modifications (time extensions,
      additional funding , etc.) and recommending to the GMO
      whether the agreement should be changed.                  ;
    • Recommending to the GMO whether an agreement should be
      terminated.
    - Reviewing the Financial Status Reports (SF 269 or 269a) and
      providing comments to the GMO.
    - Meeting with the GMO to discuss administrative/financial
      problems and issues on an "as needed" basis.  -
    - Conducting periodic reviews to assure that the recipient is
      complying with the terms and conditions of the agreement.
      The PO should provide the GMO a copy of the evaluations.
    - Communicating regularly with any other program staff with
      responsibility for aspects of the project/program to keep
      apprised of the progress on issues which need resolution.
    • Assisting the recipient, where appropriate, with the development
      of an Action Plan for conducting subsequent years of the project.
    - Providing input to their GMO on recipient's requests for any
      rebudgeting or other actions which require EPA prior approval.

    - Notifying the GMO if the recipient is not complying with the
      terms & conditions of the agreement.
9/30/93                       5'18

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                 GRANTS MANAGEMENT OFRCE
                         ROLES AND
                       RESPONSIBILITIES

              • ADMINISTRATIVE EXPERTISE

              • ASSURE ADMINISTRATIVE
               REQUIREMENTS ARE MET

              • FOCAL POINT FOR ADMINISTRATIVE
                ISSUES

VIEWGRAPH #12
TITLE:         Grants Management Office Roles and
               Responsibilities

KEY POINTS:
    In this phase, the GMO is responsible for:

    - Maintaining the official administrative file and ensuring that the file
     contains all required materials, records, and documentation.
    - Assuring that all reports and deliverables required by the agreement
     are received in EPA. Some reports may go directly to the PO (e.g.,
     progress reports), or the FMO (e.g. Federal Cash Transaction
     Reports) but the GMO has to ensure that ail reports required by the
     agreement have been received.  Some GMOs may ask the POs to
     send a memorandum certifying that all programmatic reports and
     deliverables were received on time and were of acceptable quality.
    - Reviewing the Financial Status Reports and resolving any
     discrepancies.

    - Monitoring the financial and management aspects of awards through
     reviews of reports, correspondence, site visits, or other appropriate
     means.
    - Ensuring that the recipient complies with the applicable administrative
     requirements, including certifications, procurement, and indirect cost
     agreements.
    - Conducting oversight reviews  of recipient's administrative systems,
     e.g., procurement, property, and general administrative.
9/30/93                       5-19

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                               RECIPIENT
                              ROLES AND
                           RESPONSIBILITIES

                        COMPLYING WITH ALL
                        REQUIREMENTS IN THE
                        AGREEMENT
VIEWGRAPH#13
TITLE:       Recipient Roles And Responsibilities

KEY POINTS:                                                      ?

   •    in this phase, the recipient is responsible for:
       •  Expending and accounting for funds in accordance with the
         agreement, program regulations, and statutes.
       -  Accounting for total project costs and segregating allowable and •  I
         unallowable costs.
       • Conducting procurements in accordance with the appropriate   I
         procurement rules, including ensuring that debarred or suspended
         bidders are not awarded a contract using Federal funds.
       -  Complying with the appropriate Disadvantaged Business Utilization
         requirements and ensuring that their subcontractors comply with the
         requirements.
       -  Recording the receipt and expenditure of program income as a
         project transaction.

       -  Complying with the appropriate property purchase, management,
         and disposition requirements.
       -  Complying with EPA requirements and the Uniform Relocation
         Acquisition Assistance and Real Property  Acquisition Act, if real
         property is purchased under the agreement.
       -  Requesting the Award Official's required approval for a formal
         assistance amendment.
       -  Requesting the PO's approval for an informal amendment.
       -  Complying with all applicable reporting requirements, including
         submitting progress reports, Financial Status Reports, MBE/WBE
         reports.


   9/30/93                       5<2°

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                        OTHER OFFICE
                         ROLES AND
                  ;     RESPONSIBILITIES

                 • FINANCIAL MANAGEMENT OFFICE

                 • OFFICE OF GENERAL COUNSEL

                 • MBE/WBE COORDINATORS
VIEWGRAPH414
TITLE:      Other Office Roles And Responsibilities

KEY POINTS:

Financial Management Office (FMO)

     Processing requests for payments.
    Complying with any request from the GMO to restrict
    payment for appropriate programmatic or administrative
    reasons. For instance, the PO may want to review and
    approve the results of one  part or activity of the work before
    allowing the recipient to draw down on additional funds.
Office of General Counsel/Regional Counsel
*   The Office of General or Regional Counsel may need to be
    involved from time to time as legal  issues arise.
MBE/WBE Coordinator
    The MBE/WBE Coordinator ensures that, when required,
    recipients send jn completed MBE/WBE reports (SF 334,
    "MBE/WBE Utilization under Federal Grants, Cooperative
    Agreements,  and Other Federal Financial Assistance")
 9/30/93                      5<21

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VIEWGRAPH f 13 (Continued)
TITLE:       Project Officer Responsibilities

KEY POINTS:

    - Reviewing requests for modifications (time extensions,
      additional funding , etc.) and recommending to the GMO
      whether the agreement should be changed.
    - Recommending to the GMO whether an agreement should be
      terminated.
    - Reviewing the Financial Status Reports (SF 269 or. 269a) and
      providing comments to the GMO.

    - Meeting with the GMO to discuss administrative/financial
      problems and issues on an "as needed" basis.

    • Conducting periodic reviews to assure that the recipient is
      complying with the terms and conditions of the agreement.   • *
      The PO should provide the GMO a copy of the evaluations.  .
    - Communicating regularly with any other program staff with   '•
      responsibility for aspects of the project/program to keep
      apprised of the progress on issues which need resolution.
    - Assisting the recipient, where appropriate, with the development
      of an Action Plan for conducting subsequent years of the project.
    - Providing input to their GMO on recipient's requests for any
      rebudgeting or other actions which require EPA prior approval.
    • Notifying the GMO if the recipient is not complying with the
      terms & conditions of the agreement.
9/30/93                      5-22

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                  GRANTS MANAGEMENT OFFICE
                         ROLES AND
                       RESPONSIBILITIES

              •ADMINISTRATIVE EXPERTISE

              • ASSURE ADMINISTRATIVE
               REQUIREMENTS ARE MET

           .   • FOCAL POINT FOR ADMINISTRATIVE
                ISSUES

 VIEWGRAPH*  14
 TITLE:        Grants Management Office Roles and
               Responsibilities


•   In this phase, the GMO is responsible for:
    - Maintaining the official administrative file and ensuring that the file
     contains all required materials, records, and documentation.
    - Assuring that ail reports and deliverables required by the  agreement
     are received in EPA. Some reports may go directly to the PO (e.g.,
     progress reports), or the FMO (e.g. Federal Cash Transaction
     Reports} but the GMO has to ensure that all reports required by the
     agreement have been received.  Some GMOs may ask the POs to
     send a memorandum certifying that all programmatic reports and
     deliverables were received on time and were of acceptable quality.
    - Reviewing the Financial Status Reports and distributing a copy to the
     PO for their review.

    - Monitoring the financial  and management aspects of awards through
     reviews of reports, correspondence, site visits, or other appropriate
     means.
    - Ensuring that the recipient complies with the applicable administrative
     requirements, including  certifications, procurement, and indirect cost
     agreements.
    - Conducting oversight reviews of recipient's  administrative systems,
     e.g., procurement, property, and general administrative.
9/30/93       '               5-23

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                         APPLICANT/RECIPIENT
                              ROLES AND
                           RESPONSIBILITIES


                       COMPLYING WITH ALL
                        REQUIREMENTS IN THE
                        AGREEMENT
VIEWGRAPH#15
TITLE:       Applicant/Recipient Roles And Responsibilities

KEY POINTS:

       In this phase, the recipient is responsible for:
       -  Expending and accounting for funds in accordance with the
         agreement, program regulations, and statutes.
       -  Accounting for total project costs and segregating allowable and
         unallowable costs.
       - Conducting procurements in accordance with the appropriate
         procurement rules, including ensuring that debarred or suspended
         bidders are not awarded a contract using Federal funds.
       -  Complying with the appropriate Disadvantaged Business Utilization
         requirements and ensuring that their subcontractors comply with the
         requirements.
       -  Recording the receipt and expenditure of program income as a
         project transaction.
       -  Complying with the appropriate property purchase, management,
         and disposition requirements.
       •  Complying with EPA requirements and the Uniform Relocation
         Acquisition Assistance and Real Property Acquisition Act, if real
         property is purchased under the agreement.
       -  Requesting the Award Official's required approval for a formal
         assistance amendment.
       -  Requesting the PO's approval for an informal amendment.
       -  Complying with all applicable reporting requirements, including
         submitting progress reports, Financial Status Reports, MBE/WBE
         reports.


   9/30/93                       5'24

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                        OTHER OFFICE
                         ROLES AND
                       RESPONSIBILITIES


                 • FINANCIAL MANAGEMENT OFFICE

                 • OFFICE OF GENERAL COUNSEL
                 • MBE/WBE COORDINATORS
VIEWGRAPH#16
TITLE:      Other Office Roles And Responsibilities

KEY POINTS:


FINANCIAL MANAGEMENT OFFICE (FMO)
    Processing requests for payments.
*   Complying with any request from the PO or GMO to restrict
    payment for appropriate programmatic or administrative
    reasons. For instance, the PO may want to review and
    approve the results of one part or activity of the work before
    allowing the recipient to draw down on additional funds.
Office of General Counsel/Regional Counsel
    The Office of General or Regional Counsel may need to be
    involved from time to time as  legal issues arise.
Office of Small and Disadvantaged Business Utilization
*   The MBE/WBE Coordinator ensures that, when required,
    recipients send in completed quarterly MBE/WBE reports (SF
    334, "MBE/WBE Utilization under Federal Grants, Cooperative
    Agreements, and Other Federal Financial Assistance")
 9/30/93
5.25

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    ASSISTANCE
  PROJECT OFFICERS
  TRAINING COURSE
MODULE VI

CLOSEOUT

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              CLOSEOUT OF ASSISTANCE
                       AGREEMENTS
                 BY THE END OF THIS MODULE YOU
                    WILL BE ABLE TO:

              • Understand the Process For Closeout of
               Assistance Agreements


              • Describe the Roles and Responsibilities
               During Closeout
VIEWGRAPH # 1

TITLE:      Closeout of Assistance Agreements

KEY POINTS:
    This module describes the major steps of the Closeout process for
    EPA program and project-type assistance agreements and indicates
    unique Closeout procedures for: (1) Waste Water Treatment
    construction grants (WWT construction grants), (2) Continuing
    Environmental Program grants, and (3) Superfund Cooperative
    Agreements (Superfund CAs)
    This module also describes the specific roles and responsibilities of
    EPA staff and recipients during closeout.
  9/30/93                     61

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                   PURPOSE OF CLOSEOUT
               Proper Closeout  Ensures the
               Completion of All:
             Technical Work
           • Administrative Work : HI
VIEWGRAPH#2
TITLE:       Purpose of Closeout
KEY POINTS:                                           I

      The closeout process is a systematic method of ensuring that ail
      technical work (e.g. product development, construction) and
      administrative requirements (e.g., review of FSRs) have been
      finalized.
      Closeout is initiated when a project ends due to completion or
      termination. A project may be terminated because of insufficient
      funds, non-funding of a renewal, or decision by the recipient or EPA
      not to continue funding the project/program.
      Closeout ensures a final accounting of expenditures and an
      assessment by the PO that all technical work has been completed
      and is satisfactory.
      Closeout also ensures that any remaining unobligated funds are
      deobligated.
      A task force developed new agency closeout policy on all EPA
      programs. A final policy was issued August 27,1992, and the
      Assistance Administration Manual will be updated. (See Appendix S)
     9/30/93
6.2

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                CLOSEOUT OF ASSISTANCE AGREEMENT
Category
Technical Issues '.
Financial Issues
Legal Issues
Institutional issues
(Superfund Clean ups)
Property
Inventions
Recipient Role
' Writes and Submit* Final
Technical Report
. Submits final FSR and/or
final payment request
• Completes Cost Recovery
Requirements (Superfund)
• Provides Notification of
Settlements
• Provides Assurance that
Institutional Controls, ft
Required, are in Place
• Requests disposition
Instructions
• Submits inventions
report
EPA Role
• PO provides comment to recipients
• PO Notifies GMO of acceptance or
rejection
• GMO *PO Assure All Audit
Exceptions Are Resolved
• FMO Settles Billing and Payments
• GMO ft PO Review and Approve
Financial Status Report
• GMO Amends Agreement or issues
AAN
• GMO ft FMO DeoMigata balances
• GMO ft PO Resolve Any Disputes
• GMO Documents Closure In FBes
• GMO, PO, ft FMO maintain Official
Records
• PO disposition of property
• GMO Provides Disposition
Instructions
• OGC Resolve patent Interest
• GMO provides instructions
VIEWGRAPH#3
TITLE:      Closeout of Assistance Agreements
KEY POINTS:

      This viewgraph illustrates the closeout requirements for assistance
      agreements.
      All  assistance agreements are subject to audit.  However, audit is
      not a pre-requirement prior to closeout.
    9/30/93
                               6.3

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                              TIMING OF CLOSEOUT
                TYPE OF AGREEMENT



                CONTINUING ENVIRONMENTAL
                PROGRAMS
                SUPERFUND

                 PrtJtomedialCA


                 Single SHeCA

                 Muft^SHeCA



                 Cora Program CA



                All
TIMING OF CLOSEOUT

When Project End*
     •\

When prwvioui Continurton Agreement
   Ends
WhenPAiS Activities Are
   Completed
When Work to Computed

Wlwn Work Is CompleM it EMh
  Sit*Activity and upon Completion of all
  SH» Activities
Wlwn Managerial and Administrative
  flesponslbllrtiM Have Been Completed

When project it completed, terminated, or
annulled
VIEWGRAPH#4
TITLE:       Timing of Closeout
KEY POINTS:

    •  ,  Formal closeout can occur only when all parties are satisfied with the
         final product, ail eligible costs have been accepted, all repayments
         have been received, all grant conditions have been met.  If an audit is
         underway prior to closeout, all issues must be resolved prior to
         closeout.
    *    The timing of closeout depends primarily on the type of agreement or
         contract. The viewgraph illustrates when closeout of various types of
         agreements should take place.
    •    Closeout of most non-Superfund project grants, including WWT
         construction grants, begins when the project period has expired.
         Cioseout of Continuing Environmental Program grants begins on the
         date the previous, most recent, Continuation Agreement expires.
         Closeout of Superfund Cooperative Agreements occurs at the following
         times:
              Pre-remedial - when all preliminary assessment/ site inspection
              (PA/SI) activities have been completed or terminated at all sites.
              Single-Site CA - when all activities covered by the statement of
              work (SOW) are completed or terminated at that site.
       9/30/93
                                      6.4

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VIEWGRAPH # 4 (CONTINUED)
TITLE:      TIMING OF CLOSEOUT

KEY POINTS:
          Superfund Multi-Site Cooperative Agreement (MSCA) - is
          somewhat different from other CAs.  Closeout of an individual site
          covered by the MSCA occurs when all activities at that site are
          completed or terminated. Closeout of the MSCA occurs when all
          activities at all sites covered by the SOW have been completed or
          terminated.
          Superfund Core Program Cooperative Agreements (CPCAs) - when
          the State has completed the activities specified in the SOW.
     9/30/93                     65

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                            INITIATING CLOSEOUT
                 To Initiate Closeout, QUO* Mutt:


                 • Obtain "Status Report of Project*
                   Completed But Not Closed Out"

                 • Ensure the Accuracy of the Status
                   Report

                 • Send "Reminder Utter" For Project*
                   Scheduled to End In 90 Days
                 • Update GICS When the Status of Project
                   Changes
VIEWGRAPH#5

TITLE:       Initiating Closeout

KEY POINTS:

       Periodically, the GMO obtains and reviews the "Status Report of
       Projects Completed But Not Closed Out" through the Grants
       Information Control System (GICS).

   •    90 days prior to the project expiration date, the GMOs should send  a
       "Reminder Letter" to remind the recipient and Project Officer of the
       closeout requirements, and update GICS when the status changes.

       The PO informs the GMO in writing (for file documentation) if the
       project should be closed out or extended.
     9/30/93
                                    6.6

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                   DELIVERY OF PRODUCTS AND REPORTS
                THE RECIPIENT MUST DELIVER:
                             •  Satisfactory Final Product
VIEWGRAPH #6
TITLE:        Delivery of Products and Reports
KEY POINTS:

    The PO must provide the GMO with written confirmation that:
    - Project is completed;
    - Final reporVproduct(s) were submitted and are satisfactory;
      * Peer Review Requirements. If the recipient will release the final
        or other  reports, informational materials/or other products
        produced under the agreement to the public, they must follow the
        Agency's peer review process.
       *  Publication Review Regulations. If the final report will be
         published as an EPA report.it must be reviewed through the EPA
         publication review process and the Project Officer  and the
         Award Official are responsible for ensuring this process is used.
         For al! Reports accepted for publication, the Project Officer
         submits a Technical Data Report (EPA Form 2220-1) to the
         appropriate GMO and submits a Technical Data Report and two
         copies of the Final Progress Report to the Headquarters library.
    - The PO must inform the GMO how property purchased under the
      agreement, if any, should be handled.
     9/30/93                      67

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VIEWGRAPH # 6 (Continued)
TITLE:       Delivery of Products and Reports

KEY POINTS:
  If the property is Federally owned property, the recipient must
  ensure the proper disposal of all Federally owned property before
  closeout can be completed.  Once the GMO receives the
  recipient's list of Federally owned property, it must notify the
  recipient of property disposition requirements.
  Other reports:

  -  Invention Report - EPA Form 3340-3. If the project resulted in
     any inventions being produced, the recipient must report them on
     this form to the Award Official.  The PO should be aware of any
     inventions, and should remind the recipient to submit this report;

  -  Request for final payment. The PO should remind the recipient
     to submit a final SF 270, "Request for Payment," SF 271,
     "Outlay Report and Request for Reimbursement".  In
     Headquarters,  the GMO will notify the recipient through an
     Assistance Adjustment Notice to request final payment; and

  -  MBE/WBE Reports - SF 334. The recipient must submit a final
     report on their contracting with MBE/WBE firms.

  Recommended disposition of funds. The PO must inform the GMO
  how the program recommends handling any remaining funds.  In
  Headquarters, any remaining funds will be deobligated.

  If a recipient owes EPA funds, the recipient has 30 days to pay this
  debt. The GMO will inform the FMO of the debt in order that an
  accounts receivable can be established in IFMS.  The assistance
  agreement cannot be closed out until the debt is paid.

  After receiving and reviewing all deliverables, the GMO will prepare
  a closeout letter/amendment (using the Assistance Adjustment
  Notice (EPA Form 5700-42), indicating the disposition of any
  unused funds. At this time the GMO notifies the FMO to deobligate
  any unobligated balances.
  9/30/93                       6

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                      PROJECT OFFICER
                         ROLES AND
                      RESPONSIBILITIES

               CERTIFY ALL DELIVERABLES
               SUBMITTED

               RECOMMENDS DISPOSITION OF
               PROPERTY

               RESPOND TO OIG QUESTIONS
VIEWGRAPH47
TITLE:        Project Officer Responsibilities

KEY POINTS:


   In this phase, the PO is responsible for:
   - Certifying to the GMO that all project activities were satisfactorily
     completed and all deliverables submitted as required in the
     agreement.
   - Providing assistance to recipients and the GMO as necessary
     to assure that the agreement is closed out in a timely manner.
   * Discussing equipment disposition and closeout of technical
     requirements with the recipient at least 30 days prior to project
     completion.

   - Obtaining assistance and advice, if necessary, on property
     disposition issues (including transfer or reimbursement issues)
     or on any follow-up action relative to incomplete outputs,
     including the need for sanctions.
   - If there is an audit of the project, the PO will be required to
     respond to any programmatic issues and may be the
     responsible program person to ensure that the recipient
     complies with any programmatic audit recommendations.
 9/30/93                      69

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                GRANTS MANAGEMENT OFFICE
                         ROLES AND
                      RESPONSIBILITIES

             •  INITIATE CLOSEOUT

             •  INFORM OIG OF PENDING CLOSEOUT

             •  DEOBLIGATE FUNDS

             •  RESPOND TO OIG QUESTIONS
VIEWGRAPH #8
TITLE:        Grants Management Office Roles and
              Responsibilities

  In this phase, the GMO is responsible for:

  -  Initiating the closeout process by sending the recipient and PO a
   reminder letter that the project period has expired.
  -  informing the Office of Inspector General of pending closeouts of
   Wastewater Construction Grants and Superfund projects.

  - Taking necessary actions to close out awards when all project work in
   the agreement is completed.                                    ^

  -  Issuing an amendment/Assistance Adjustment Notice to deobligate
   remaining funds.

  •  If there is an audit of the project, the GMO will respond to any
   administrative findings and recommendations. If there are
   administrative recommendations affecting the recipient, the GMO will be
    responsible for following up to ensure that the recipient complies with
  the   recommendations.                                    .
  9/30/93                     6_10

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                          OTHER PLAYER'S
                             ROLES AND
                         RESPONSIBILITIES


                      RECIPIENT

                      FMO
 VIEWGRAPH # 9
 TITLE:       Other Player's Roles And Responsibilities

 KEY POINTS:

• In this phase, the recipient is responsible for:
    - Responding to any inquiries from the PO and GMO.
    - Submitting technical, financial, and administrative reports as
      required.
    - If an audit is conducted, providing the auditors with all necessary
     information, documentation, etc. related to the agreement.
    In this phase, the FMO is responsible for:
    - Reviewing the Integrated Financial Management System (IFMS)
     and working with the GMO to resolve any differences between
     the final Financial Status Report and IFMS balance.
    - Deobligating from IFMS any remaining balance and reducing the
     Automated Clearinghouse or payment records, as necessary.
    - Responding to any financial audit questions during an audit.
   9/30/93                .      611

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    ASSISTANCE
  PROJECT OFFICERS
   TRAINING COURSE
MODULE VII
    AUDIT

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                         AUDITS

               THIS MODULE WILL:

                • DESCRIBE THE BASIC AUDIT
                  PROCESS

                • DESCRIBE THE POs ROLE IN
                  THE AUDIT PROCESS
 VIEWGRAPH#1
 TITLE:         Audits
                                  /

 KEY POINTS:


 •   The Inspector General Act authorizes the Inspector Genera! (IG) to
     have access to all records, reports, audits, reviews, documents,
     papers, recommendations, or other material available to the
     Agency.  To meet its responsibilities, the IG must have the
     cooperation of Agency personnel.
     Title 18, United States Code, Section 1516 states that whoever,
     with intent to deceive or defraud the United States, endeavors to
     influence, obstruct, or impede a Federal auditor shall be fined or
     imprisoned. Therefore, it is imperative that all personnel
     recognize their obligation to make full disclosure of information
     pertaining to instances of waste, fraud, or abuse.
     The next few slides will provide an overview of EPA's audit
     process,  identify some of the. key individuals involved in
     conducting and resolving audits, how to survive an audit, and the
     PO's responsibilities during the audit and during  audit resolution.
9/30/93                      7.1

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                          TYPES OF AUDITS
                    Internal Audits
                  .• External
                    Audits
   VIEWGRAPH#2 ,
   TITLE:       Types of Audits


   KEY POINTS:

       Internal audits are performance audits that examine the programs
       or operations of Federal agencies.  (However, as pan of an
       internal audit, State agencies or assistance recipients may be   .
       evaluated to provide further information, about the performance of a;
       Federal agency.)  Internal audits are used to test the adequacy of
       an organization's regulatory compliance and financial reporting.
       Additionally, they are used to test the effectiveness of its resource
       management, operating procedures, program results, and financial
       operations. Internal audits may evaluate the entire organization or
       only one or two of an organization's programs or operations.
       internal audits of EPA are conducted by the U.S. General
       Accounting Office (GAO) or EPA's Office of the Inspector General
       (EPAOIG).
   *   External audits are audits that examine a Federal agency's
       assistance recipients. These audits are conducted by the EPA
       OIG or its contractor, or, in the case of Single Audits, by the
       recipient. They may be performed before, during, or after the
       completion of a project. Examples of external audits include single
       audits, pre-award audits, interim and final cost audits, and indirect
       cost audits.
            Single audits are financial and compliance audits of State
            and local governments that are performed in accordance
            with the Single Audit Act of 1984 (Public Law 98-502) and
            OMB Circular A-128, and OMB Circular A-133.
9/30/93
7.2

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       VIE WGRAPH # 2 (Continued)

       TITLE:       Types of Audits

       KEY POINTS:

                  Pre-award audits are reviews conducted to evaluate
                  prospective cost or pricing data.

                  Interim and final cost audits are reviews conducted to -
                  assess the alienability of costs claimed under the
                  assistance agreement or contract and to ensure
                  compliance with the applicable requirements and award
                  conditions.

              -   Indirect cost audits are reviews conducted to determine
                  whether the prospective indirect cost rate properly
                  allocates allowable costs.

            Audits of recipients may be  requested by the Award Official
            when considered necessary. These requests should be made
            on EPA Form 5700-29, "Assistance Audit Request,"  and should
            be submitted directly to the appropriate Divisional Office of the
            Assistant Inspector General of Audits (D1GA).

            EPA is authorized to audit the financially-assisted activities of
            any recipient organization. However, it is Federal policy to place
            maximum reliance on a recipient's own audits (i.e., Single Audits)
            if they are carried out in accordance with applicable Federal audit
            standards.
9/30/93                       . 7.3

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                              AUDIT OFFICIALS
                                          Inspector General
                                           aency AudK Follow-up
                                          Official

                                          Headquarters or Regional
                                          Audit Follow-up Coordinator

                                          Action Officials

                                          Award Officials
   VIEWGRAPH # 3                                           T
   TITLE: Audit Officials          i                             >?
   KEY POINTS:                                               "
         On behalf of EPA's Inspector General, the Office of the Assistant
         Inspector General for Audits (OAIGA) arranges for and monitors
         the audits of EPA's financial assistance program activities.
         The Agency Audit Follow-up Official is responsible for
         Agency-wide audit resolution and implementation of required
         corrective actions. The Assistant Administrator for Administration
         and Resources Management is the Agency Audit Follow-up
         Official.
         The Audit Follow-up Coordinator (AFC) is responsible for the
         day-to-day activities that relate to audit management, response,
         and resolution.

     •    The Action Official is responsible for responding (on behalf of the
         audited organization) to the draft and final reports. (Usually, the
         GMO is delegated the Action Official function.)
         Award Officials are responsible (through the AFC) for completing
         corresponding project files, which include documents and
         correspondence relevant to the prospective audits.  They have the
         authority to submit assistance-related audit requests.
9/30/93
7.4

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                             THE AUDIT PROCESS
                              I  Entrance Conference

                                      t
                              I Advisement of Findings
                              |    Exit Conference
                                   Draft Report
                              I     Final Report
                              [^AudltResolirUon^J
   VIEWGRAPH #5

   TITLE: The Audit Process
   KEY POINTS:

          At the entrance conference, the auditors explain the purpose and
          scope of the audit and receive comments from the organization
          being audited regarding potential audit areas. All personnel with
          extensive knowledge of the area being audited should be at the
          entrance conference. The OIG will ask the AFC for the  program
          and GMO contacts for this audit, and will provide a list of key audit
          personnel.
      *    During the audit, the auditors provide the organization with
          feedback about preliminary findings and developing issues. If the
          organization believes that any of these findings are invalid based
          on factual information, it should discuss this with the auditors.
          Further, significant or sensitive findings should be brought to the
          attention of the organization's senior management immediately.
      •    At the exit conference, the auditors discuss the audit findings  with
          the organization to clarify any questions they may have about the
          audit.
      •    Shortly after the audit is completed, a draft report is issued. The
          report contains the auditor's findings and documentation to  support
          these findings, and management has 30 days to provide the
          auditors with their comments on the draft.
9/30/93
7.5

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              VIEWGRAPH#5(cont.)

              TITLE: The Audit Process
              KEY POINTS:

                *    After receiving the draft report, the organization is expected to
                    provide a written response to the audit findings contained in the
                    draft report within 30 days.  The organization's response should
                    concur with the findings or provide an explanation for its
                 .   disagreement.  If the organization has planned or implemented
                    corrective actions, these should be documented in the response
                    as well.

                •    After the exit conference, the auditors develop a draft audit report
                    containing their findings and recommendations.  After receiving
                    this report, the organization's management has 90 days, if the
                    findings are over $100,000, to provide OIG with a response that
                    either documents concurrence with the audit report or proposes
                    alternative corrective actions for addressing the findings.
                    Audit resolution occurs either when a "final determination" is.  .
                    issued (in the case of an external audit), or when a "final
                    response" is issued (in the case of an internal audit).  For EPA'
                    OIG audits containing significant findings of $100,000 or more,
                    the Action Official must obtain the concurrence of the EPA OIG
                    on proposed corrective action.
                    Under the Inspector General Act Amendments, EPA
                    management must track audit follow-up actions until all corrective
                    actions identified in its management decision are complete.
                    Further, EPA management must report to Congress
                    semi-annually on the status of audit resolution and follow-up
                    activities, as well as provide an explanation for audits not
                    resolved within  180 days and final actions that have remained
                    incomplete for one year or more. Currently, EPA's Resource
                    Management Division prepares the semi-annual report to
                    Congress on audit resolution and implementation of corrective
                    action.
_
       9/30/93                         7-6

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                      SURVIVING AN AUDIT


                       • DOCUMENTATION

                       • COURTESY

                       • PREPARATION

                       • COMMUNICATION

VIEWGRAPH#6
TITLE:      Surviving an Audit

KEY POINTS:

  •   To help make the audit process proceed as smoothly as possible,
     POs should keep the following in mind:
     Documentation:
     • The most important action for a PO (and anyone else involved in
       the administration or management of assistance agreements) is
      to document all actions and the reasons for taking or not taking
      that particular action.  The auditors will consider that the PO has
      approved all actions taken by the recipient unless there is some
      documentation in the file to show otherwise.
     - Be responsive to requests for information.  Make all documents
       available to the auditors.  Remember, everything in the file is
       subject to review, e.g., records, memos, and telephone
       messages.
     - The following are some guidelines to follow when interacting with
       the auditors:
     Courtesy.

     - Maintain good working relationships with the auditors.
     - Use audit as an opportunity to identify and address weaknesses.
  9/30/93                       7-7

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VIEWGRAPH #6 (Continued)
TITLE:       Surviving an Audit
KEY POINTS:
  Preparation.
      - Determine what auditors will look for.                      ^
      - Cooperate & demonstrate steps already taken to resolve issues
       OL agree to take corrective actions.
      - Demonstrate knowledge of program.
      - Ask other POs who have been through an audit what to expect
       during an audit.
 Communication.
      - Answer all questions.
      - Tell auditors what action(s) you have taken to improve problem
       areas.
     • Be truthful. Discuss all problems and and issues; give auditors all
       data they request.
     - Advise auditors of matters which you believe they should review
       during the audit.
 9/30/93                        7.8

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                      PO RESPONSIBILITIES IN AUDITS
                                      Responding to Audit Questions
                                      Ensuring Recipient Completes
                                      Corrective Actions
                                      Performs Audit Follow-up
                                      Function
                                      Ensuring Recipient Follows
                                      Single Audit Act Requirements,
                                      •s Applicable
   VIEWGRAPH # 6
   TITLE:       PO Responsibilities in Audits
   KEY POINTS:
     •   The PO must document in the official Project File all decisions,
         communications, memos, etc. from the beginning of the
         project/program (see Appendix  ).  When the  project/program is
         audited, the PO is responsible for:
         -  Answering programmatic questions from the auditors;
         -  Responding to OIG questions on preliminary finding; and
         -  Preparing written responses to all programmatic findings during
           audit resolution.
     •   The PO's records and notes are very important during an audit to
         help explain why a specific action was taken or not taken.
         During an audit, the PO must be responsive and cooperative and
         prepared to discuss the project/program.
         Make available all records, files, reports, agreements, contracts,
         correspondence, or other requested information.
     •   Advise the OIG on matters which you believe warrant review during
         the audit or investigation.
         The worst situation (also the hardest to avoid) is to develop a
         "them vs us" mentality. The auditors are just doing their job.
9/30/83
7.9

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          ASSISTANCE
         PROJECT OFFICERS
         TRAINING COURSE
        MODULE VIII

INTERAGENCY AGREEMENTS

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                     DEFINITION OF AN IAG
                  An IAG is a written agreement between
                  EPA and another Federal, State, or Local
                  Agency which:
                    •  Provides for Goods or Services In
                       Exchange for Funds, Or
                    •  Provides for Mission Support or
                       Establishes Environmental Policy
                       without Exchange of Funds

  VIEWGRAPH#1
  TITLE:       Definition of an IAG

  KEY POINTS:                                              ,
         The acronym "IAG" is used as an abbreviation for both:
         - Federal interagency agreements, and
         • Intergovernmental agreements between a Federal agency and
           a State or local government
    FEDERAL INTERAGENCY AGREEMENTS
         Written agreements between Federal agencies under which goods
         and services are provided in exchange for funds, or where services
         are exchanged without payment.
         lAQs where funds are exchanged generally involve either:
         - One agency providing goods or services to another agency; or
         - Cases where the agencies have a mutual need for the goods or
           services and share in the cost of the work performed under the
           agreements.
         lAGs are subject to the receiving Agency's rules and regulations
         and to any special conditions the transferring Agency places on the
         IAG, e.g., MBE/WBE requirements,  Superfund audit.
9/30/93        .                  8.1

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 VIEWGRAPH # 1 (Continued)
 TITLE:       Definition of an IAG

 KEY POINTS:
   •   lAGs where no funds are involved are called "Policy Agreements or
      Memorandums of Understanding" These agreements set forth basic
      policies and procedures governing the relationship between the agencies
      (i.e., their respective roles and responsibilities) to accomplish a joint goal or
      project. An example is the agreement between EPA and the Department of
      Energy whereby, EPA will lead a Superfund cleanup at a Federal facility.

   •   lAGs may be awarded to any Federal agency, including bureaus and
      offices within an Agency. Government-owned, contractor operated facilities
      (GOCOS such as the Department of Energy labs, e.g., Lawrence
      Livermore) are considered components of the Federal government and, .  i
      therefor, eligible to receive an IAG. (The District of Columbia is not a
      Federal agency.)

   INTERGOVERNMENTAL AGREEMENTS
      An agreement between a Federal agency and a State or local government
      under which the State or local government reimburses the Federal
      agency (EPA can provide funds to States and local governments only
      under an assistance agreement) for the costs of providing a specific
      technical service, e.g., statistical studies and compilations, technical tests
      and evaluations, training, surveys, reports, documents, and data.
9 '30/93                          8.2

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                           AUTHORITY



                       • ECONOMY ACT OF 1932

                       • COOPERATION AUTHORITIES

                       • INTERGOVERNMENTAL
                        COOPERATION ACT
    VIEWGRAPH # 2
    TITLE:       Authority

    KEY POINTS:
     The Economy Act of 1932
        The Act is the general authority which authorizes Federal agencies
        to exchange goods and services and to reimburse one another.
        - The primary purpose of the Act is to allow an agency to obtain
          goods or services from another agency to improve economy and
          efficiency in the government.
        - This Act or authority is often used to fund lAGs which.bolster one
          agency's capability to conduct an activity in a specific area with
          another agency's expertise.

        - To use this authority, both Federal agencies must have the
          authority to conduct the activities covered by the IAG. Under
          these lAGs, EPA provides the service or goods with its own staff
          or through agency contracts.
     Cooperation Authorities
         EPA also has authority to enter into lAGs with other Federal
         agencies under "cooperation" provisions of our program statutes,
         e.g., §103 of the Clean Air Act, and §104 of the Clean Water Act.  If
        the receiving agency will use any of the funds to fund a grant or
         cooperative  agreement, EPA's IAG must identify EPA's statutory
         authority to award a grant or cooperative agreement.
9/30/93         "   .    .  "         8.3

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 VIEWGRAPH #2 (Continued)
 TITLE:       Authority

 KEY POINTS:


   INTERGOVERNMENTAL COOPERATION ACT
      An intergovernmental Agreement is an IAG between a Federal agency
      and a State or local government under which the Federal agency
      provides technical services it is especially capable to perform in
      exchange for reimbursement. The Office of Management and Budget
      Circular A-97 provides detailed guidance for these agreements.
      Intergovernmental agreements can involve services from an EPA ~
      contract only if:

      - The State or local government certifies that the services are not       <
       reasonably and quickly available through ordinary business channels;::,;
       and                                                 .    > .
      - The services performed under the contract are regular and continuing r
       activities performed by the agency (i.e., almost as if the contractor were
       doing regular work of the agency, such as, contractors working on site
       at EPA  labs.)

       • GAD recently had a request from a State to allow it access to one of
       EPA's PC maintenance contracts, however, this is not fundable
       because it is a service not normally provided by EPA and it is readily
       available through ordinary business channels.
9/30/93                  '         8.4

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                          IAG GUIDANCE
                     • COMPENDIUM


                     * PRINCIPLES OF
                       FEDERAL
                       APPROPRIATIONS
                       LAW
  VIEWGRAPH#3

  TITLE:       IAG Guidance


  KEY POINTS:
    •    There are no EPA regulations which apply to the development and
         management of an IAG. Instead, EPA uses:

         - The IAG Compendium. "Interagency Agreement Policy and
           Procedures Compendium" The Compendium is a compilation of
          information pertaining to lAGs. It includes information in general
          terms that apply to all EPA programs and offices that use
          lAGs.  It is specifically directed to EPA program administrative and
          financial staff who have an active part in developing and
          administering lAGs.

         - Appropriations law. Many IAG issues revolve around interpretation of
           appropriation law.  For example, EPA can not use an IAG augment
           EPA's appropriations,  we must use funds only for the purpose they
           were  appropriated, and we can use funds only as long as they are
           available. The Comptroller General's  "Fundamentals of
           Appropriations Law" (the Red Book) provides guidance in making
           these determinations.

    *    All JAG EPA wide guidance is developed by the Grants Administration
         Division, Grants Information and Analysis Branch. Program offices may
         develop office specific procedures where appropriate.
9/30/93
8.5

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                         AVAILABILITY OF FUNDS
                     ' SAME AS APPROPRIATION

                     • 1 YEAR FUNDS, SEVERABLE
                      SERVICE MUST BE DEOBLIGATED
                      AT END OF FY

                      FUNDS OBLIGATED AVAILABLE
                      UNTIL BUDGET PERIOD END DATE
     VIEWGRAPH # 6
     TITLE:       Availability of Funds

     KEY POINTS:
         Funds obligated under an IAG are subject to the limits of availability
         established by the appropriation from which the funds come. '
         Funds must be deobligated at the end of the Fiscal Year if they are:
         -  One year funds;
         -  Expiring funds obligated under the Economy Act; or
         *  Used for a severable service.
         Funds obligated under an IAG for a product under a contract, grant,
         or cooperative agreement are available until the project is complete.
9/30/93                          8.6

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                 INTERNATIONAL AGREEMENTS


                  . FUNDS OUT:

                    -ECONOMY ACT

                    - COOPERATION PROVISIONS

                  • FUNDS IN:

                     -  FOREIGN ASSISTANCE ACT
   VIEWGRAPH #7
   TITLE:      International Agreements

   KEY POINTS:

       An international agreement is one under which any component will be
       conducted for a foreign government or international organization. We
       use the EPA IAG form for these agreements.
       The Office of International Activities (OIA) must be involved as soon as
       practicable after the need for foreign agreements is known.
   *    The OIA must approve every international IAG. The OIA is
       responsible for obtaining, if necessary, State Department and the Trade
       Development Agency's approval.  OIA must also coordinate with the
       Office of General Counsel.
       lAGs cannot be used to provide funds directly to a foreign
       government or international agency. Funds may be transferred to these
       agencies only under an assistance agreement between EPA and the
       foreign entity.
       -  EPA can cooperate with other federal agencies to provide goods or
         services to fpreign governments through contracts or assistance
         agreements as long as both EPA and the other agency have authority
         for the proposed project. For example, when EPA bought waste water
         treatment equipment for Poland, we provided the funds to the Corps of
         Engineers which did the purchasing.
       EPA can accept funds directly from the foreign governments and
       organizations to provide services to those entities (funds-in). These
       "foreign"agreements are authorized by the Foreign Assistance Act and
       must be approved by the Trade Development Agency.
     ,»
9/30/93                          8.7

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                         CINCINNATI FINANCIAL
                         MANAGEMENT CENTER
                         RECORD OBLIGATIONS

                         MAKE PAYMENTS

                         DEOBLIGATE UNUSED FUNDS
    VIEWGRAPH #8
    TITLE:       Cincinnati Financial Management Center

    KEY POINTS:
        The Cincinnati Financial Management Center (CFMC) records
        obligations in the Integrated Financial Management System
        (IFMS).  They will not obligate funds until the other agency
        returns accepted agreements. For that reason, IAG specialists
        will call at the end of the year to enlist your aid in getting
        documents returned from other agencies.

        CFMC also makes payments under lAGs and requests funds
        from other agencies,  When there is a problem in getting funds in
        an operating plan or allowance, the PO may contact CFMC or
        the GMO. CFMC will also provide guidance as to how to draw
        funds down.

        CFMC will deobligate funds when they are no longer available,
        i.e., expired.  However, CFMC will coordinate with the the GMO
        before deobligating funds.
9-'30/93     '                     8.8

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                            EPA REQUIREMENTS

                        * ASSISTANCE VS ACQUISITION

                        • TRAVEL    .

                        • MBE/WBE

                        • SUPERFUND COST RECOVERY
                         AND AUDIT

                        • INDIRECT COST

  VIEWGRAPH#9
  TITLE:      EPA Requirements
  KEY POINTS:

  •,    When an IAG budget includes funds for travel, the PO must submit a
      statement that the funds are not intended to augment EPA's travel
      ceiling and that the travel is necessary to carry out the project.
  •    In accordance with EPA's Appropriation Act, each "funds-out" IAG
      which includes funds for extramural agreements (i.e., contracts,
      grants, or cooperative agreements) must include a condition
      requiring the receiving agency to follow EPA's Disadvantaged
      Business Utilization plan.  In the event an agency claims they will not
      accept this condition, contact either the Grants Information and
      Analysis Branch, Grants Administration Division,  and the Office of
      Small and Disadvantaged Business Utilization.
      When an IAG includes funds for a grant or cooperative agreement,
      the PO must:
      -. Provide a  statement that the proposed  project is not for the direct
       use and benefit of the Federal government and is consistent with
       the requirements of the Federal Grant and Cooperative Agreement
       Act.

      - If the IAG  is  a "funds-in" IAG, the other Federal agency must
       provide a  similar statement.
  •    lAGs which  include Superfund monies must generally include a
      condition on record keeping and cost recovery. Also, all Superfund
      expenditures by other agencies must be audited by their IAG
      annually.
      If an  IAG budget includes indirect costs, the IAG  must include an
      indirect cost condition.

9/30/93                          8.9

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                       PROGRAM OFFICE
                       RESPONSIBILITIES
                • ASSURE WORK IS CONSISTENT WITH
                  ERA'S MISSION

                • ASSIGN PROJECT OFFICERS

                • NEGOTIATE SCOPE OF WORK, FUNDING
                  AND BUDGET

                • PREPARE FUNDING PACKAGE

                • ASSURE PERFORMANCE

                • REVIEW AND APPROVE PAYMENT REQUESTS

                • CLOSE OUT AGREEMENTS


    VIEWGRAPH14
    TITLE:       Program Office Responsibilities                    .
    KEY POINTS:                                            ,     J

   •   Activities under lAGs must be consistent with EPA's mission and  -. :  \-
       statutory authority. EPA cannot use an IAG to acquire authority it .
       does not already have.                                      '
   *   Each IAG should be for a distinct project with a clearly defined objective
       or work product. The PO must negotiate the work the other agency will
       perform and the work EPA will perform. Both agency's POs should
       negotiate the estimated cost for each IAG. The estimate must reflect all
       costs necessary to carry out the project, e.g., personnel, equipment,
       extramural, travel, and indirect cost.
       After the  scope of work is determined, the PO must prepare a Decision
       Memorandum which:
       - Summarizes EPA's objectives to be met through the proposed IAG
        and certifies that the proposed IAG is consistent with the EPA program
        office's mission.

       - States the IAG is the best means for achieving the objective and, if the
        Economy Act is the statutory authority for the agreement, how the IAG
        will enhance government economy and efficiency.
       - Assures all technical and scientific measures will be performed in
        accordance with an approved quality assurance plan and, if required,
        include a quality assurance form signed by the quality assurance
        officer.
9'30/93                          8.10

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      VIEWGRAPH # 4 (Continued)
      TITLE:        Program Office Responsibilities

      KEY POINTS:

        . includes a statement that any proposed travel funds are necessary for
          the project, not intended to augment either agency's travel ceiling, and
          the travel would not occur except for the other agency's project.

        - Includes a statement that any funds to be used on an assistance
          agreement will not be for work that is for the direct benefit or use of the
          Federal government.
        The Decision Memorandum must be signed by the Decision Official (the
        individual in the program office delegated the responsibility for approving
        the office's use of funds - generally the Allowance Holder.)
        For funds-out lAGs, the program office must prepare a Commitment
        Notice which approves funds for the IAG. GMO staff will verify
        (preyalidate) the commitment in the IFMS Automated Document Control
        Register (ADCR) before award.
        If the IAG includes funds for a detail for an EPA employee for more than
        120 days, the package must include a completed Personnel Action form
        (SF 52).
        The PO must prepare EPA Form 1610-1 for each IAG. (GMOs will assist
        in preparing this form).
        The PO must determine and provide any special conditions which the
        GMO will add to the IAG, e.g., reporting.
        The PO must determine the method of payment. Generally, payment is
        made by reimbursement, i.e., after costs are incurred. In some cases,
        however, it may be necessary to make advance payments.  In such
        cases, the funding package must include a justification for advance
        payment. If the agreement is "funds-in" the PO should discuss payment
        method with the other agency's Project Manager.
        The PO must assure products to be produced under an  IAG are provided
        in a timely manner.
        Although the relationship under an IAG is with another Federal agency,
        inadequate performance should be considered in deciding whether to
        undertake future cooperative efforts with that agency.
9/30/93                           8.11

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                         GMO RESPONSIBILITIES

                     • PREVALIDATE COMMITMENT

                     • PREPARE AWARD

                     •SIGN IAG AND DISTRIBUTE

                     • MONITOR PROJECT TO
                      ASSURE TIMELY
                      COMPLETION AND CLOSEOUT
   VIEWGRAPH # 5
   TITLE:       GMO Responsibilities

   KEY POINTS:
                                                          V;: u

                                                          "f. :.=:
In reviewing funding packages, the GMO will:

• Assure that alt required information is included;
- Proper authorities are cited.
When corrections or changes are required, the GMO will often make
the changes after discussing them with POs.

When clearances by other offices (such as Office of International
Activities) are required, the GMO will assure that the clearances are
included.

Information on lAGs is included in the Grants Information and Control
System (GICS). GMOs can provide reports on lAGs in many forms.
If a program wants a report, they can contact their GMO.

The GMO staff will prepare a transmittal letter and submit the
documents to the Action Official for signature, send the IAG to the
other Agency for signature,  and distribute copies. In Headquarters,
the Action Official is the Chief, Grants Information and Analysis
Branch, GAD. In the Regions, the Action Official is the Regional
Administrator or their designee.

The GMO staff maintains the official IAG file, and the PO maintains
files which document their project management activities.

When lAGs are completed, the GMO will work with the PO to assure
that the IAG is closed out in a timely manner.
9/30/83
                         8.12

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         APPENDIX A
FEDERAL GRANT AND COOPERATIVE
       AGREEMENT ACT

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              .PIBLIC LAW 95-22-1— FEB. 3. 1978
                   92 STAT.
Publir Law 95-224
95th Congress
                            An Act
To l
>'eUerul priH.-urvrn«ut relationships, *ud tor oilier |>ur|WM«,
r«lliipa from
          '
                                                                     Feb. 3. If
                                                                     (H.R. 7691)
  Bf it i niift, !<* of Annri<-eratioiial  incoitaistencies. confimion, inethciency,
     and wa.) Tlie purpos^sof this Act arc—.
       (1)  to characterize the relationship between the Federal Gov-
     ernment and contractors, State and  local governments,  and other
     recipients in the  acquisition of property and services and in the
     furnishing of assistance by the Federal Government so  as to pro-
     mote  a butter understanding of Federal spending and help elimi-
     nate  imiu're».-iry  administrative requirements on recipients of
     Federal awards:
       (i')  to establish Government-wide criteria for selection of appro-
     priate legal .iiairuinrnts to achieve  uniformity in the use  by the
     executive agencies of such instruments, a  clear definition  o*f the
     relationships they reflect, and a  better  understanding  of the
     rtMixMisiiiilitii* of the parties:
       (3)  to promote increased discipline in the selection and use of
     ty|H*s  of contract, grant agreement, and cooperative agreements
     Hint to  maximize competition  in  the award of  contracts and
     encourage competition, where deemed appropriate, in the award
     of grants and roo(«rative'agreempnts; and
       (4) to re<|iurr a study of the relationship between the Federal
     Government Hnd grantees  and other recipients in Federal assist-
     mire progriiin* Hnd tho feasibility of developing a comprehensive
     system of guideline for the use of grant and cooperative agree-
     ment-, and other forms of Federal assistance in carrying out such
     program a.

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                   o~
                                     	in- ii-rin—
                       (1) "Stale irnvernnieni" mean* any of the several States ,^
                    T'nili'd  Slate-, the District  of ("oluinliia. the Commonweal
                    J'uerfo  Rico, artv territory or possession of the I'nifed State^^
                  •  agency  or  in-tnimenfality of  a  State, nnd  any nmlti-Sfri  ,
                   • • ii'i'i'inril. miv. iii'Miicipftlity. city. fou-n. township, local piiMi**
                   authority, •("•••i-il'lii-iriri. intr.-»etafc district, council of govern-
                   ment-'. .|«i!:-"r jjnnip. representative organ r^.'tl ion. other  inter-
                   state gmcni'iieiit  i-niilv. or nnv  other instrumentality of a local
                   government:

                      (;!) "other recipient" mer»n« nny person or recipient oilier than
                   n Si:ite or local wivernmenf who is authorized to receive  Federal
                   ae.-jwfanee or pn»'iireni»'nf  contracts and inclmles-any rlmrit.nl'le
                   ciri'ifilc;iMon:iril1rtitHtion:

                      ; » "cxf-ciiiive  aireney"  means any eTeeufive department ns
                   •leflni-d in section  J"l of title *».  T'nited  States Code,'a military
                   department a* defined in section JO-2 of title 5. United States Code,.
                   an independent establishment as defined  in section 104 of title 5,
                   f'niicd States Co.!e (except that it .*hall  not  include the General
                   .\ceoiinfintr Office), a  wholly owned Government  corporation:
                   and                     '          -   f'
                     (.")  "grant or cooperative agreement*' does not  include any
                  ngn'emi-nt under  which only  direct  Federal cash ae-isfancc
                  tii  itnlividtitil>. a snlisidy, a loan, a loan guarantee. i»r insurance is
                  pro vide. I,
                                      rsE OF
  l?C 50.1.
                Sr.r. 4. Kach executive agency shall tise a type of procurement con-
              tract n« th*> legal instrument reflecting a relationship between the
              Federal Government  and  a State  or local  government or. other
              recipient—                                                        ^

                    (1)  whenever the principal purpose of the instrument is the,.../
                 acquisition, by purchase, lease, or barter, of property or seryjoi
                 for the direct*benefit or use  of the Federal Government; or  •
                   (2)  whenever an  executive agency determines in a spec™
                 instance  that the use  of a  type of procurement contract  i
                 appropriate.     '                              • •
                                 VST OP GRANT AORTEMKVTS

CSC 504.        5KC. 5. Each ejtectitire ajjwicy shall use a type of grant agreement ns
            the legal instrument reflecting a relationship between the Federal Gov-
            ernment and a State or local government or other recipient whenever—
fl'fr"              (1) the principal purpose of the relationship is the transfer of
                money,  property, services, or anything of value -td the State or
                local government or other recipient in order to accomplish a pub-
               ' lie  purpose of support  or stimulation authorized by Federal
                statute,  rather than acquisition, by purchase, lease, or barter, of
                property or services for the direct Iwnefit or use of the Federal
                Government: nnd
                  (•„') no siiltffantial im-olvement  is anticipated between  the
                executive ajrency, acting  for the Federal Government, and the
                State or local government or other recipient during performance
               of flic contemplated activity.

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                  rsr. OF coorr.nATivF. AOIU'.F.MEVTS

  . SEC. fi. Each executive agency shall use a type of eooporati\-e agree- 41 USC 505.
ni'-nt. as the lejral instru.tiem rejecting a relationship between the Fed-
eral Government nnd a State nr  local  government or other recipient
  '
           Hie prinrip.il purpose of the relationship is the transfer of  Tr«nrfm
        .'V. property. servire*. r.'il Got crument. and the Stflfr nr
    '	'I g-M-iTiitwiif ar.of.ljrr recipient during performance of the
    i-nijii'iiiptati'd ariivjty.

                          \iTrroRrzATiiNs

  Svf. 7. (a) N'ot withstanding any other provision of law. each e.twu- Centred*. p»nt
f ive agency iinthorixeil hy law to enter into contracts, grant or roopern- or cooperative
itv« agreements, or similar arrangements is authorized and directed to «f'**Jn*nt»
••nt'. The Director of the Office of >fana?i'ment  ami Pud>ret. in  *! t-'SC 507.
••oo|M'ration with the executive  nyencies. shall  undertake a study to
iti-vclop a hetter  unilerstatidinjr of alternative mcitns of tinpleincntinp
Ki'ilcnU a>^istanre pm^rrntiis, and to determine th<- feasibility of devel-
<>pniir a ciiiiipivhensitT >ystem of guidance for Federal  assistance
jiiDirratii-. Such  study slinll include a thoroii|;li runsideration of the
liiiilin^s and  rci-oiniHciiilations  of the Con mi lesion on ijovernment'
1'nx-uiciin'iif  ivlutin^ to t!.e feasibility of developing such a system.
Tin' Director  r-hali cmiMilt  with  and to the extent practicable, involve
n-|)ri'»<'r>iutivcs of  tin- e.vcutive a-rencies, the Congress, the General
A-roimtinj: Office,  and .State and local jroverntiictits, other recipients
ami t»flicr  intere»ti'd nn-m^rs of the public. The result of thc'stiidy  Report w
-hall be ri'ptnteij to the Committee on Government Operations of the  «"i*r«sion
Ilou-i'uf Iif|jrr-M>ntativesand the Committee on Gox-ernnwntal Affairs  f0mm""*«
nf the Sctiutf  at the earliest practicable date, but m no event later than
i wo year-  uficr the duie of enactment of this Act. The report on the •
•tndy shall include (1) detailed descriptions of the alternative means
of implciin'iititi-j- Federal assistance programs anil of the circumstances
in winch  tltc  u»c of each  appi-ars to be  most desirable, (1) detailed

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  92 STAT. 6
    ISC ->o8.
 Rrpcal. etfertite
   I SC50I note.
 41 I SO 50V.
Csceptaj
inductions
41 USCSOlnoie.
Eipinuon due.
                 PUBLIC LAW 95-224—FEB. 3, 1978

      -..	 .A the ba-ii: characteristics and an outline of such ronipre-
  heiiMvcayMi'iii of guitlani'e for Federal av>i»taitiv programs, the devel-
  opment of which inuy lie determined feasible, and (•') ri'commemJalions
  concern in g arrangements to proceed with the full development of such
  comprehensive system  of guidance and for  such  administrative or
  statutory change::, including changes in the provisions of sections 3
  through 7 of this- Aet. as may be deemed appropriation the basis of the
  findings of the study.
                             OriDKI.I.VKS

 .   SKI-. D. The  I>ireetor  of  the Office  of Management and Budget is
  authorized to issue supplementary interpivtati ve guidelines to promote
 «oiisi-irtit and eflicient u.se of contract, grants agreement, and coopera-
 i ivc agreements as detined in this Act.
                       10.
                                 KEI'LALS AND MVIVGS PROVISIONS
   	  (a) The Aet "ntitlcd "An Art to authorize the expenditure
 of funds through grants for support of scientific n'M-arch.and for other
 pin-poses", approved .September 6.195S (7:i Stal. I"ii3; 42 V.S.C. 1S!>1
 and 1892), is regaled, etfectivc one year after the date of enactment of
 this Act.
   (b) N-nliinfr in this Act shall be construed to rentier void or voidable
 any existing contract, grant, cooperative agreement, or other contract,
 grant, or cooperative agreement entered into up to one year after the
 date of enactment of this Act.
   (c)  Nothing in this Act shall require the esiablt>hment of;a single
 relationship  between the Federal Government and a State .or local
 government or other recipient on a jointly  funded project,  imdiving
 funds from more than one program or appropriation where different
 relationships would otherwise be appropriate for different comr  *~~~
of the project.
   (d)  The Director of the Office of Management and Bndg
eiccpt individual  transactions or programs of unv executive ug^t. .
 from the application of the provisions of this Act. This authoritv shall
expire one year after receipt by the Congress of the study provided fur
in section 6 of this Act.

  Approved February 3. 1978.
              LEUSLATIVE HISTORY:

              HOISE KKPORT No. 95-481 (Comm. on Government O|*r»n»n*).
              SKNATK HEK)RT No. 95-449 •ccooip.nyiru S. 431 (Cumm, oa Government^
              CO.SCKtiSIONAL RECORD:
                   Vol. 123 
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           APPENDIX B
      POLICY FOR AWARDING
FINANCIAL ASSISTANCE VS ACQUISITION

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 11/4/93 DRAFT                                          l^lxF\l  I
                             POLICY
                          FOR AWARDING
               FINANCIAL ASSISTANCE VS.  ACQUISITION

 I.     PURPOSE  i APPLICABILITY

 II.    BACKGROUND

 III.   POLICY.

 IV.    DEFINITIONS

       A. APPROVAL OFFICIAL
       B. AWARD OFFICIAL
       C. DECISION MEMORANDUM
       D. EPA OFFICE
       E. GRANTS MANAGEMENT OFFICE
       F. STATUTORY AUTHORITY

 V.     IMPLEMENTATION PROCEDURES: ROLES i RESPONSIBILITIES

        A. EPA  Office Responsibilities
        B. GMO  Responsibilities

 VI.    DISTINGUISHING ACQUISITION AND ASSISTANCE RELATIONSHIPS

        A. Criteria for Distinguishing Between Acquisition and
           Assistance

        B. Factors to Consider in Selecting the Support Instrument

           1. Direct Beneficiary
           2. Support or stimulation
           3. Non-Profit vs. Profit Organization

        C. Acquisition and Assistance Examples

VII.   SELECTING A GRANT OR COOPERATIVE AGREEMENT

        A. Grant Agreement
        B. Cooperative Agreement

VIII.  STATUTORY AUTHORITY FOR ASSISTANCE AGREEMENTS

 IX.    IN-KIND  ASSISTANCE

 X.     FAILURE  TO COMPLY


Appendix A:  ACQUISITION fc ASSISTANCE CASE STUDIES
Appe&diZ B:  DECISION TREE FOR ASSISTANCE AWARDS

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                                                     DRAFT
                             POLICY
                          FOR AWARDING
              FINANCIAL ASSISTANCE VS. ACQUISITION

I. PURPOSE & APPLICABILITY

     The purpose of this policy is to  clarify the criteria for and
to  achieve  consistency  in  the selection  and  use of  contracts,
cooperative agreements and grants by all EPA offices. This policy
expands  on  the December 2, 1992 memorandum  from the  Assistant
Administrator for Administration and Resources Management on "When
to Use Contractsor Cooperative Agreements  and Grants" and the EPA
Assistance Administration Manual, Chapter 1.

     This policy applies to all EPA offices and further clarifies
the proper use  of  all  award instruments  to fund only appropriate
activities.

     Further, this policy does  not apply to interagency agreements
because they are not considered assistance under the Federal Grants
and Cooperative Agreement Act.

     Please  contact  the Grants Administration  Division's- Grants-
Policy and Procedures Branch regarding the  contents of this policy;
on 202-260-5268.                    i
                                    ?' ;• -
II. BACKGROUND

     Various of Federal  statutes authorize and/or direct  the EPA
Administrator  to   carry  out specific environmental  activities.
These  statutes  may   specify   whether   the activities   may  be
accomplished in-house  by using EPA staff  or by funding  outside
parties  (extramural   funding).   The  latter  includes  financial
assistance  (grants and  cooperative agreements)  and  acquisition
(contracts).  Certain activities may be undertaken  in conjunction
with another Federal  department or agency, a  State, or  a  local
government by Interagency or Intergovernmental Agreements  (IAG).

    ; The Federal Grant and Cooperative Agreement Act of 1977 (FGCAA
or Act),  PL  95-224, as amended (31 U.S.C.  6301 et seg.) established
governmentwide  criteria  for  determining   whether   a  grant  or
cooperative  agreement or  a contract  is  the  appropriate  legal
instrument to use for an extramural  funding activity. Guidance on
implementing the Act  was issued by  the Office of Management and
Budget (OMB.) in 1978,  (see 43 Fed.Reg.36860 August  18,  1978).

     The Act was based on a congressional  finding that  executive
agencies were not  adequately differentiating between procurement
and assistance relationships. Specifically, Congress was concerned
that agencies were misusing assistance agreements to circumvent
competition and other procurement rules,  and also applying

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                   X V'
unnecessarily burdensome contract paperwork requirements to non-
procurement transactions.  To address these problems, and ensure
consistent and uniform agency practice, Congress defined in the Act
the standards for determining the appropriate use of contracts and
assistance agreements.

     Under the  Act,  grants and cooperative  agreements  are both
assistance agreements and are different from contracts. The 'only
distinction between a grant agreement and  a cooperative agreement
is the degree of federal involvement.

     Under section 4  of the Act,  31 U.S.C.  6303, an agency must use
a contract if the principal purpose of an instrument is to acquire,
by purchase,  lease, or barter, property or services for the direct
benefit  or  use  of  the federal  government,  or if  the agency
otherwise  determines that use  of  a  procurement  contract   is
appropriate.   Under sections 5 and 6 of  the FGCAA,  31 U.S.C. 6304.
and 6305,  an agency  may use an  assistance agreement only if the
principal purpose of  an  agreement is to transfer anything of value
(e.g.,  money,  equipment,  services) to  an  eligible  entity   to
accomplish a  public purpose of support or stimulation authorized  by
statute.  Where an agency will not be substantially involved with
the recipient during  the performance of an assistance agreement,  a
grant  is  the appropriate  instrument.    If  substantial  federal
involvement  is  contemplated in  the  assistance relationship, the
agency must select a cooperative agreement.

     Under section 10 of the Act, 31  U.S.C. 6307, OMB is authorized
to  allow exceptions from  the Act's requirements  in individual
cases.   OMB's policy is not to allow  exceptions absent a clear
demonstration that compliance with the Act would result in serious
harm.

     It  is important to note  that the  FGCAA does not expand the
Agency's authority to award assistance  agreements.  The Agency has
no  inherent  authority  to  award  assistance   agreements;  such
authority  must  be found  in the Agency' s statutes  and does not
derive  from  the  FGCAA.   On the other hand, unless  legislatively
prohibited,  every agency  has  inherent  authority  to enter into
contracts  as .long as the procurement is related to  the  agency's
mission.
                          DRAFT

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                                             DRAFT
III. POLICY
    EPA offices awarding extramural funds must determine whether to
award a grant or cooperative agreement or a contract based on the
principal purpose of the relationship between the parties.

    If an office's principal purpose in undertaking a project .is to
obtain a product or service for the direct  benefit  or use of the
Agency,  or  any part  of the  Federal  government including  the
legislative  and judicial branches,  a  contract,  rather  than  an
assistance agreement,  must be used.  This is  the case regardless of
the benefit  the project may have  for  the recipient  organization,
other non-federal entities, or the public.   Offices cannot satisfy
the  principal  purpose  test  to allow the  use  of an  assistance
agreement merely by developing a scope of work describing a project
as not being for  EPA's direct benefit and use.   To  withstand an
audit, there must be  substance behind the written scope  of work
demonstrating that the project is, in  fact, intended to support or
stimulate a recipient  to accomplish a  public purpose authorized by
statute.

     Offices may use a contract even where the principal purpose is
to  establish an  assistance  relationship,  where the use  of  a
contract  is  appropriate(i.e., when   the  office  determines  that
specific  needs  can be  satisfied  best  by using the  procurement
process).  Offices should retain documentation that supports their
determination that use of a contract is appropriate.  (For example,
evidence that use of a contract would be substantially more cost-
effective.)  Such documentation  may  be. part  of  the   Decision
memorandum.

IV. DEFINITIONS

      A.     Approval   Official.     The   individual  having  the
responsibility and delegated authority in an EPA  organization for
determining whether to fund or reject  an application  for  technical
or programmatic reasons.

      B.  Award Official.  The individual who signs the assistance
agreement ensuring that all technical,  legal, and administrative
evaluations  have  been made and  that the proposed  agreement  is
awardable.

     The Award  Official for  regionally administered programs  is
either  the  Regional   Administrator,  the  Assistant  Regional
Administrator,  or the Division Director, depending upon Delegation
of Authority and any subsequent Redelegations.

     The Award  Official for grants and  cooperative agreements  at
Headquarters is the Branch Chief, Grants Operations Branch, Grants
Administration Division, Office of Grants and Debarmeht,  Office of
Administration and Resources  Management;

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                                            DRAFT
      C.  Decision Memorandum.  An EPA  office's memorandum to  an
Award  Official  containing  the  decision and  justification for
funding  or  rejecting an assistance proposal.   This decision  is
signed by the Approval Official or his\her respective designee.

      D.  EPA Office. Refers to either the Headquarters Office  or
Regional  Office  or  Laboratory  responsible  for  managing  the
technical or programmatic aspects of  a specific activity.

      £.  Grants Management Offices  (QMO) .   The Headquarters and
Regional  units  responsible   for  business  management  aspects
associated with the review and  negotiation of applications and the
award and administration of funded projects  from  pre-application
through audit resolution and final close out.  In  the Regions the
GMOs report organizationally to the ARA;  in  Headquarters  the GMO
reports to the Director, GAD.

       F.   Statutory  Authority.   The section  of authorizing
legislation (such as Clean Water Act  or Pollution  Prevention Act,
etc.) specifically stating that  EPA  or the Administrator may  or
shall make grants or  provide financial assistance for the intended
purpose. (Appears as Item #19  on EPA's Assistance  Agreement.)
V. IMPL.pq-:KTATION PROCEDURES ;  po^fi AND RESPONSIBILITIES

    A.  EPA Office Responsibilities

    1.  Each EPA office must  determine  whether a  relationship  is
one of acquisition or assistance.   In making  this determination,
each EPA office will use the  criteria set forth in Section VI  of
this policy.

      Offices should review all contemplated projects as soon  as
possible for the purpose of determining whether the nature. of the
project activity is acquisition or  assistance.  If it is unclear
whether a project is acquisition or assistance, the Office should
request the responsible GMO/Award Official  for. assistance.

    2 .  The Decision Memo must state that the assistance instrument
is appropriate based on the criteria outlined  in this policy.

    3.  In most instances, offices must allow at least 60 days lead
time {Superfund awards require 90 days) from receipt of application
by the  GMO to the award date.   A  much longer  lead  time may  be
needed to award a contract.

    B.  Grants Management Office (GMO)  Responsibilities

    1.  The GMO. will  review the determination of  the Office and
decide whether to  concur.  The GMO  will make  this decision in  a

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                                                    DRAFT
                                                 	 . m*  »•  I

 timely manor and in conjunction with the Office of General Counsel,
 Grants and  Intergovernmental Division  (or Regional  Counsel),  if
 necessary.


     2.  The GMO must return  all  completed assistance application
 packages  that are  acquisition activities to the Office and  say why
 it cannot award the project as an assistance project.

     3.  The GMO will provide training and information dissemination
 regarding the appropriate use  of grants, cooperative agreements and
 contracts  to  staff, and  project  officers  to  help   the  Offices
 determine  the  appropriate use of assistance funds and  to  ensure
 high quality application packages are produced.
VI. DTSTTlJrtTYT*"-*	
                                         	^	,^p JVC.UATJLONSHIPS ...
       A.  Criteria for Distinguishing Between  Acquisition and
           Assistance


       The following criteria apply to all EPA awards of  extramural
   funds,  except  where  the authorizing  legislation was enacted after;
   the FGCAA and specifically supersedes the FGCAA or other provisions
   of  law.  In that  case,  the  award  instrument  specified  in the
   authorizing legislation must  be  used.  Otherwise, the Agency must
   use the appropriate  award  instrument  as required  by the  FGCAA.
  Approval  Officials and Award Officials must  determine in  each
  instance  the   proper instrument  to use,  given  the particular
  circumstances  of the  transaction.
  EPA
 recipient
 acquisition^
          relationship
                          exists
                                        __-, _.« ue«s ux a contract.
       If EPA is funding a recipient to conduct activities that are
 flpfr principaljly .for  the direct benefit  or use  of the  Federal
 Government, and  the award is authorized  by federal statute,  an
 assistance relationship exists and a financial assistance agreement
 (i.e.,  grant or cooperative agreement) may be used.

     Note  that  substantial involvement during performance is not
 relevant  in  determining  whether an  acquisition or  assistance
 mechanism  is required.  It  is  only  after  determining that  an
 assistance  agreement is appropriate  that substantial involvement
becomes  a  factor.   In other  words,   the  need  for  substantial
involvement does  not dictate the use of a cooperative  agreement
rather than a contract.  The substantial involvement test is used to
distinguish between a grant or a  cooperative  agreement.

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     B. Identifying Principal Purpose of              L/K/\F|
        Relationship


     1.  Direct Benefit  or Use  - In  considering the  principal
purpose test, Offices must determine whether the government is the
direct beneficiary or user of the activity. If EPA  provides the
specifications for the project;  or is having the project completed
based on its own identified needs;  or will directly use the report
or result of the project (for  example, by incorporating or relying
on information developed by the  project  in writing EPA guidance or
standards) then, in most cases, the principal purpose  is to acquire
property or services  for the direct benefit or use of  EPA and thus,
a contract relationship exists.   However, there may be cases where
one purpose of an agreement is to acquire property or services for
EPA's direct benefit, since a single agreement may have more than
one  purpose.  For  such  cases,  an  assistance  vehicle  may  be
appropriate.

     Not every benefit to or use by the  government is direct.  Any
extramural expenditure that furthers the Agency's goals or mission
can be said to be of  benefit or use to the government.  But not
every expenditure produces for the government a benefit or use that
is  direct,   e.g.  immediate,  uninterrupted,  or  specific.  If  an
expenditure will  produce  a benefit or use that is not  direct,  a
contract is not required.

    2. Support or Stimulation  -  "Support or stimulation", although
a relatively broad term, does not encompass every agency extramural
award. Every award could be construed to serve a public support or
stimulation  function  if this  means that its ultimate goal  is  to
serve the public welfare.  However,  an award that is not authorized
by statute  or is intended  to acquire  goods or services  for the
direct benefit or use  of  the  government can not  be an assistance
agreement, regardless of how well it serves the public.

     To  find a  public purpose  of support  or stimulation,  the
Office does  not  have to determine that the recipient needed the
federal assistance to perform  the activity; nor is it necessary to
determine that the recipient,  rather than the Agency  initiated the
proposed project.   It is  necessary to  .find that the project  is
being performed by the recipient, for its own purposes,  which EPA
is merely supporting with financial or other assistance.

     3. Non-Profit vs. Profit Organizations

     Type of organization  does  not drive the decision touse one
instrumentor the  other.  A  non-profit  organization  does  not
automatically qualify for an assistance relationship.  Similarly,
a profit-making organization does not automatically reflect an

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acquisition relationship  (although a profit-making organization may
be an assistance recipient only if the statutory grant authority so
provides).    The  sole determinant of  the proper  mechanism is
principal purpose, other 'myths'  in this area  lead one to believe
that research should always be funded by an assistance agreement
and that universities automatically receive cooperative agreements.
In fact, research can be funded by contract and universities can
receive grants or contracts,  as veil  as  cooperative  agreements.

     C.  Acquisition and Assistance Examples

     Examples of activities that EPA may (per individual statutory
     language)  fund through  assistance agreements include:

     1. State continuing environmental programs, such as
        groundwater protection, pesticide enforcement,
        and public water system supervision;

     2. Constructing local wastewater treatment plants;

     3. State and local government cleanup  of  hazardous waste.   •-
        sites;

     4. Environmental education projects;

     5. Conducting surveys,  studies,  and research, when the
        principal purpose is  to stimulate or support development
        or dissemination of  knowledge (not  primarily for use of
        EPA;

     6. Training for non-Federal  personnel  where the recipient
        selects the trainees,  specifies  the plan for
        training,  and provides the trainers.

     7. Assistance to associations  of State officials, as follows:

        As a general rule, an assistance agreement may not be used
        to support a conference or other services, the principal
        purpose of which  is to provide advice,  recommendations, or
        other information for EPA's direct  use in developing or
        changing guidance, regulations,  etc. Thus, for example, an
        Office cannot award  an assistance agreement  to a
        trade association or consulting firm to arrange and conduct
        a conference of EPA  officials and members of the
        regulated community  if the principal purpose is to enable
        EPA to obtain the views of the regulated community on a
        proposed new policy or  changes in an existing one.  If the
        Office needs help in putting  on  such a conference,
        it should use a contract  to acquire logistical support
        services.  An exception to this general rule  is assistance
        to associations of State  officals who  implement EPA
        programs.
                                8
                                             DRAFT

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                       DRAFT
An assistance agreement mav be used to provide funding to
an association of State officials or agencies to hold a
conference among its members and EPA officials to discuss
issues in the implementation of a Federal effort that the
States implement on a day-to-day basis under a formal
delegation or as partners with EPA in a coordinated,
national effort.  Although EPA does derive benefits from
such a conference and may subsequently decide to adopt
recommendations or use information provided by the State
officials at the conference, the principal purpose of the
agreement is not to acquire services for the direct benefit
or use of the Federal Government.  The principal purpose is
to support the association in helping its state members
participate in developing the policies that they will carry
out. State officials and agencies are in the unique role of
sharing operational responsibility with EPA for
implementation of environmental efforts.   EPA may issue
the guidance and regulations, but the States are at least
equal partners in implementing them.  They need, and
clearly benefit from,  an opportunity to discuss the
policies they will be  implementing before EPA adopts those
policies. The same is also true of Tribal governments who
are also partners of EPA in implementing EPA efforts.

At such a conference of EPA and State officials, EPA
officials should not finally agree to adopt particular
policy positions.   EPA officials may tentatively agree on
positions,  or agree on draft or proposed positions, but any
final decisions must be made solely by EPA after
appropriate review, consideration, and modification by the
Agency itself, e.g.,  by senior managers.   The need for
subsequent and well documented EPA review and decision
should be made clear to conference participants.  Such
intervening steps between the Agency's receipt of
recommendations or information and the Agency's adoption of
final positions.

EPA may not treat an association to which it awards
assistance as it would a contractor.  Thus,  an EPA
office may not direct  an association in arranging the
association's conference or in providing other
services for its benefit.   The conference
should be run by the association, not by EPA. The
benefits of the assistance should flow primarily to
the association and its State members, not to EPA. If
the association  is merely providing logistical support
and other services to EPA in arranging an EPA
conference, a contract should be  used.  This does not
mean that EPA personnel may not be substantially
involved in the performance of a cooperative
agreement,  so long as  the purpose of the agreement is
assistance and they do not give daily direction to the

                        9

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                                                  DRAFT
        recipient or its contractor.
     Examples of activities that MUST be funded through a contract
(if not performed 'in-house*  by EPA)  include:

 1. Evaluation of performance of EPA efforts,  projects, or grantee
    activity when the evaluation is  required  bv or is  for the
    direct use of the Agency;

 2. Surveys, studies, and research which gather specific
    information desired by an EPA office for  its own use
    or for dissemination to  the public  as EPA materials;

 3. Training projects where  the EPA  office directs the
    selection of the trainers or the content  of the curriculum;

 4. Design or development of items to meet a
    direct EPA nefd:

 5. Conferences sponsored or initiated  by EPA offices
    primarily to meet a specific EPA  need or obtain information for
    use by EPA;

 6. Support the vork of EPA  Federal  Advisory  Committee Act  (FACA)
    Committees;

 7. Provide technical,  analytical, and  application review        .
    services/advice for the  direct benefit or use of EPA offices;
    such as information used to set  guidelines;

 8. Evaluate or improve the  internal operations of EPA offices;

 9. Provide support to EPA offices,  with the  statutory
    exception of the Senior  Environmental Employee Program;

10. Produce specific information that will be directly incorporated
    by EPA offices  into technical, policy or regulatory decisions;

11. Develop computer models  (i.e. software) specifically for EP£
    use;

12. Produce data for input J.nto internal Aaencv computer
    data bases;

13. Help (as allowed under EPA Order 1900.2)  prepare required EPA
    reports to Congress;

14. Help (as' allowed under EPA Order 1900.2)  prepare EPA guidance
    documents or manuals;
                               10

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15. Operate EPA facilities;
                                                   DRAFT
16. Organize training or other conferences principally for federal
    .employee benefit;

17. Help perform policy analyses (as allowed under EPA Order
    1900.2) for EPA offices;                                '

18. Provide logistic or other support to EPA employees carrying
    out technology transfer activities;
VII.
               BETWEEN A GRANT OR COOPERATIVE AGREEMENT
     After an Office determines that an assistance agreement rather
than a contract is appropriate, it must then decide whether to use
a grant or a cooperative agreement to provide  the assistance. The
Office must  base  this decision on . the  extent and nature of the
Agency's involvement in the activities to be  supported under the
agreement.
                                                          *
       A.    Grant Agreements .    EPA shall  use  a  grant
  agreement whenever an assistance agreement is appropriate
  and jthe Of f ice does not anticipate substantial involvement
  with the recipient during performance of the contemplated
  activities.

       B.    Cooperative  Agreements .  EPA  shall  use   a .
  cooperative agreement whenever an assistance agreement is
  appropriate   and  the  Office   anticipates   substantial
  involvement with the recipient during  performance of the
  contemplated activity.

       Generally,   substantial   Federal  involvement  is
  anticipated where a project is expected to entail:

       a.  Intense monitoring by EPA;

       b.  Joint operational involvement, participation,
           and/or collaboration between  EPA and the
           recipient;                                        .

       c.  EPA  prior review or approval of project phases or
           the substantive provisions of proposed contracts
           found within the scope of  the agreement;

       d.  Agency involvement in the  selection of key
           recipient personnel; or

       e.  EPA collaboration regarding scope of work,
           organizational structure,  staffing, mode of

                             11

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                                    DRAFT
         operation and other management process (assuming
         the principal purpose  Is not to acquire goods or
         services for the government,  in which case a
         contract would  be required).

     Anticipated substantial  involvement during
     performance does not include:

     a.  Agency approval of recipient  plans prior to
         award;

     b.  Normal overview activities such as site visits,
         performance reporting, financial reporting and
         audit;'".-•-

     c.  Unanticipated agency involvement to  correct
         deficiencies in project or financial performance;

     d.  Agency review of performance  after completion.

VIII. STATUTORY AUTHORITY for ASSISTANCE AGREEMENT

  A grant or cooperative agreement may be awarded only if
EPA possesses  statutory authority  to provide  financial
assistance for the activity to be supported. If a statute
authorizes the award of 'grants'  or 'financial  assistance*
it  is deemed to  authorize  the  award  of  grants   and
cooperative agreements,  whichever is consistent with  the
FGCAA.

     Sometimes EPA provides assistance to one party that
subsequently uses the funds for the benefit of  others.  EPA
may  use  an   assistance   agreement  with  an   eligible
intermediary  to  provide  assistance  to the  ultimate
beneficiaries, who must  also  be eligible.  The FGCAA does
not indicate who is to receive support or stimulation. It
does not require that the support or stimulation be only
of the  immediate party  to the  agreement.  On the other
hand,  if the  intermediary is  not itself an  eligible
recipient, or if the intermediary is effectively serving
as a  contractor  to EPA, then EPA  should normally use a
procurement  contract to  obtain  the  services of   the
intermediary in assisting eligible  recipients.
                           12

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                                      DRAFT
IX. IN-KIND ASSISTANCE
    In  addition  to transferring money to an  authorized
assistance  recipient,  EPA  offices nay  use  assistance
agreements  to  transfer  anything  of  value;  such  as,
equipment or  services,  to a recipient.   If it would be
more efficient in  terms  of cost or time for  EPA rather
than the  assistance recipient to purchase equipment or
services, EPA may  do  so and  provide  the equipment  or
services to. the recipient under the assistance agreement.
This approach would be appropriate,  for example,  where a
piece of equipment necessary for a grant assisted project
can be  purchased  at  a considerably lower  price or  be
delivered much earlier using an existing EPA contract.
Likewise,  EPA  may  provide  the  services   of  an  EPA
contractor to an assistance  recipient in lieu of money,
where appropriate.           .

     Offices should provide the following documentation in
their files when providing in-kind assistance:

     1.  a savings of cost or time is  expected; •

     2.  all charges are to the grants object class
         series;  and

     3.  all other details are in accordance with the "in-
         kind" grant feature as defined by EPA regulations
         e.g. 40 CFR parts 30 & 31 and guidance.
X.   FAILURE TO COMPLY

     In certain circumstances, it may become apparent that
an individual office or recipient failed to  comply  with
this Order  by  awarding an assistance agreement where  a
contract was required.

     Individuals discovering such situations are directed
to consult with representatives from the EPA  Office, the
Award  Official,  and the  Office of  General  Counsel to
determine all necessary actions. It is GAD policy to allow
completion of the assistance agreement  where good faith
effort  was  made  to  determine  principal   purpose in
accordance  with  the  FGCAA. It  is  not EPA  policy to
terminate, annul, or require ratification for these awards
unless   it   is  apparent   that   there  was   potential
irregularities, e.g.  conflict of interest.

     GAD will seek to ensure that  future funding decisions
by the involved office are consistent with the  FGCAA.

                           13

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                   DRAFT
                    APPENDIX A
      ACQUISITION  t  ASSISTANCE CASE STUDIES

(These case studies do not depict actual EPA situations..
However, they do illustrate commonly raised circumstances
regarding acquisition and assistance.)
                        14

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CASE STUDY II

FACTSI
DRAFT
1. An EPA office has recently announced a new
   regulatory program.  A trade association has submitted
   a proposal requesting EPA financial assistance for a
   national conference to inform its members about the new
   program and its requirements.

2. The trade association will run the conference,
   including developing the agenda and selecting the
   speakers.  Association employees  and members are among
   the featured speakers.  EPA's role will consist of
   sending a few officials to the conference to speak,
   answering questions and monitoring the proceedings.

3. The proposal calls for funds to cover the travel
   expenses of the non-federal speakers and others who
   will participate in programs and workshops at the
   conference.

4. For purposes of this case study,  assume that there is
   statutory authority and delegated approval authority
   for this award.

QUESTION A: May the office use an assistance
            agreement to fund this conference?

ANSWER A:   Yes.  The principal purpose of the agreement
            is to support the trade association in
            training and educating its members,  not to
            acquire services for the Government's  direct
            use or benefit.  Although EPA officials will
            speak at the conference and EPA derives some
            benefit from explaining its program, the
            principal purpose of the agreement is  to
            provide information to the regulated parties.

QUESTION B: Hay the agreement pay for travel expenses of
            non-federal speakers and other participants in
            the conference?

ANSWER B:   Yes.  Participant support costs  such as
            stipends,, subsistence allowances,  travel
            allowances, and registration fees for  a
            conference, meeting, or training are allowable
            under an assistance agreement and are covered
            by OMB Circular A-122.  However,  travel costs
            for Federal personnel cannot be  paid for
            through assistance agreements.
                           15

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CASE STUDY fl  (continued)
                                         DRAFT
QUESTION C: Could this award be made to a State  or local
            entity covered by OMB Circular A-87  or an
            educational institution covered by Circular A-
            » X •
ANSWER C:
 Yes,  if there is no statutory prohibition to
 do  so.
QUESTION D: Can this State recipient pay travel and other
            conference costs for state  and other non-
            federal participants at  this conference? •
ANSWER D:
Yes. A-87 and A-21 do not directly
address "participant costs" as does A-122;   .
they only address "selected items" of cost.
However, both Circular A-87 and
A-21 provide that if an item of cost is  not
addressed, a determination of allowability
should be based on the treatment of similar
items. Moreover,  EPA believes it would not be
appropriate to treat State and local
government or educational institutions more
restrictively than non-profit organizations in
this regard. Therefore,  consistent with
Circular A-122,  as long as not prohibited by
the authorizing statute (e.g.  Clean Water
Act),  a state or local recipient may pay
travel and other allowable conference costs
for participants  at an EPA funded conference.
                          16

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CASE STUDY 12
FACTS:
DRAFT
1. An EPA Office has an assistance effort open to
   non-profit organizations.  The EPA Office would
   like a non-profit to provide technical
   skills to generate data and prepare a report for EPA's
   use .concerning the effort.

2. The work being conducted falls within the statutory
   authority of the effort.

3. For purposes of this case study, assume that there is
   statutory authority  and delegated approval authority
   for this award.

QUESTION: Can EPA fund  this non-profit organization with
          an assistance agreement?

ANSWER:   No.  Even though the non-profit organization is
          eligible for  funding, the principal purpose
          seems to be to acquire services for the direct
          benefit or use of EPA.
                          17

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                                      DRAFT
CASE STUDY #3
FACTS!
1. An EPA office wants to conduct a training
   session for State personnel involved in permit
   writing and issuance.  The office intends to
   use a cooperative agreement with a non-profit
   organization knowledgeable in the subject and expert in
   training.

2. The non-profit organization will run the training
   session, consulting with EPA on the agenda and the
   training methods, but not taking direction and
   supervision from an EPA office.

3. The audience is expected to consist primarily of
   personnel from State agencies.  The course is designed
   for State personnel and a sufficient number of State
   (or non-federal)  personnel will attend to make holding
   the training session for those personnel financially
   feasible and practicable.  However,  15 percent of the
   audience will be EPA Regional personnel.

4. For purposes of this case study,  assume that there is
   statutory authority and delegated approval authority
   for this award.

QUESTION: May the EPA office use a cooperative
          agreement to fund the training session?

ANSWER:   Yes. It is reasonable to determine that the
          principal purpose is to train
          non-federal personnel if the training session
          would be held (i.e., the.training session is
          feasible and practicable,  financially and
          otherwise) even if no federal personnel
          attended.  Conversely, if the training session .
          would not be held but for the attendance of the
          federal personnel, the principal purpose test
          would not be met and a contract would be
          required.
                4
          Here, the  principal purpose of the agreement is
          to train non-federal personnel. That purpose is
        .  not changed by the attendance of some federal
          personnel. Of course, the travel and associated
          costs of the federal personnel attending the
          training cannot be paid for by the award.
          Principal purpose should not be determined based
          simply on  a count of the participants, i.e., the
          principal purpose is not necessarily to train
          non-federal personnel anytime at least 51
          percent of the audience is non-federal.

                           18

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                          DRAFT
CASE STUDY #4
FACTS:     .
1.   An EPA HQ office wants to award a cooperative
     agreement to a non-profit organization to hold a
     conference.  The proposal for the conference
     describes it as an "EPA conference11.   The agreement
     provides that EPA will develop the agenda, select the
     speakers, determine participant costs, and set
     registration fees.

2.   The non-profit organization will help develop the
     agenda and will provide the programs  and conference
     materials. The non-profit organization will plan and
     handle conference registration and hotel
     reservations, arrange the meeting space, and prepare
     and distribute publicity materials.

3.   The non-profit will provide a five percent match and
     will use information obtained at the  conference for
     educational purposes.

4.   The speakers and the audience will be from federal,
     State, and local governments, plus private nonprofit
     and profit-making firms.

5.   For purposes of this case study,  assume that there is
     statutory authority and delegated approval authority
     for this award.

QUESTION: Hay   the   EPA   office  use   a   cooperative
          agreement to fund this conference?

ANSWER:   No. The principal purpose apparently
          is to acquire the non-profit organization's
          services to enable the EPA office to hold an
          EPA conference based on the  facts that EPA will
          develop the agenda, select the speakers,  etc.
          Accordingly,  a contract is required. Although
          the non-profit organization, will perform
          numerous tasks, they are essentially
          ministerial duties and logistical support.  The
          non-profit will assist EPA in accomplishing
          Agecny objectives. The non-profit's use of
          information from the conference for educational
          purposes does not appear to be the principal
          purpose of the agreement.  The provision of a
          match may suggest an assistance  relationship,
          but in this case it does not  outweigh the
          evidence of a procurement relationship.
                           19

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CASE STUDY f5               DRAFT

FACTS:

1.   EPA  wants  to  award  a  cooperative agreement  for
     research on the impacts of a treatment standard that
     the  Agency  is  considering  requiring  in  certain
     cases.  Before issuing a regulation  proposing use of
     the  standard,  EPA  believes   that  it  needs'  more
     information to explain the proposal adequately for
     public comment.
2.   The   Office   does   not  have   clearly   defined
     specifications for the research to be performed and
     will  need  to  be  substantially  and  frequently
     involved in technical decisions in the research.

3.   For purposes of this case study, assume that there is
     statutory authority and delegated approval authority
     for this award.

QUESTION: May EPA use a cooperative agreement to fund this
          research?
ANSWER:   No.  Although the research may benefit others,
          EPA's principal purpose in funding the research
          is to obtain  information  EPA needs  to draft a
          proposed regulation.  Therefore,  a  contract is
          required.
                           20

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                        APPENDIX B
                                        DRAFT
DECISION TREE FOR DETERMINING WHETHER TO USE
                   A CONTRACT OR
             AN ASSISTANCE AGREEMENT
  1.
2.
3.
    is the principal purpose of the agreement to accomplish a
    public purpose erf support or stimulation rather than to
     federal government?
                 J
          If yes, proceed to next
          question
                 J
      Is there statutory grant making
      authorfty for this activity?    •
         -'   ::i:'"- "'"' "•"•'••
                 »
        If yes, proceed to next
        question   •

        	L
     Do jwhave appropriaied funds
            for thb purpose?
           f±iM^o^fe-w:-;
                 I
          If yes, proceed with
          award
                                     ^ W no, do not use an
                                        assistance agreement
                                        If no, riojopj use an
                                        assistance agreement
                                       If no, dSLQfil use an
                                       assistance agreement
                         21

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        APPENDIX C
EPA INVOLVEMENT IN GRANTEE
PERSONNEL AND CONTRACTOR
SELECTION UNDER GRANTS AND
 COOPERATIVE AGREEMENTS

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         SEP 24  632
          EPA Involvement in Grantee  Personnel  and Contractor
          Se£€3tiojuUnder Grants' and  Cooperative Agreements

                           , -Acting Deputy Assistant Administrator
                        and  Acquisition
               'H. Skinner,  Deputy Assistant Administrator
              Lee of  Research and Development

          ORD  Office Directors
          Laboratory Directors
     The Office of Research and Development is currently shifting
some of its  extramural resources from contract to assistance
instruments.   Although the Inspector General and Congress have
focused in recent months on inappropriate direction and  control
of contractor employees, the Agency must be avare of similar
prohibitions in dealing with assistance recipients.

     Under an assistance agreement, EPA transfers money,
property, services or anything else of va&ie to support  or
stimulate an activity to accomplish a public purpose rather than
to acquire property or. services for the direct benefit of EPA.
This memorandum reaffirms the regulatory requirements regarding
relationships between EPA employees and assistance recipients.

     EPA1 s Code of Conduct states that EPA  employees must not use
their  Government positions to "coerce, or appear to coerce,
anyone to provide any financial benefit to  themselves or others*
 (40 CFR 3.103(d)).  The Code also states that EPA employees "must
.not take any action, whether specifically prohibited or  not,
which  would  result in or create the reasonable appearance of ...
giving preferential treatment to any organization or person11 (40
CFR 3.103(d)(2)).  Additionally, our regulations for procurement
under  assistance state that "the recipient  shall conduct all
procurement  transactions in a manner that provides maximum  open
and free competition" (40 CFR 33.230(a)).   These regulations
prohibit EPA staff from directing whom assistance recipients
should hire  or whom they should contract with under a grant or
cooperative  agreement.

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                          .   -2-

     While EPA has the  responsibility to manage grants and
cooperative agreements,  EPA employees must make certain that they
do not become involved  in certain areas of personnel and
recipient procurement.   This memorandum sets forth when EPA
employees may become  involved in personnel and procurement
actions of an assistance recipient, and when they may not, based
on existing regulations.

o EPA employees 'may not:

  o    Consistent with  the EPA Code of Conduct, take any action
       under a grant  or cooperative agreement that would be a
       conflict of interest or result in an appearance of a
       conflict of interest.

  o    Direct the hiring, firing, promoting, disciplining, or
       rewarding of recipient personnel or contractors under
       grants or cooperative agreements.  (In the Senior
       Environmental  Employment Program, EPA employees may refer
       eligible senior  citizens to recipients, and select persons
       to be enrolled by recipients.)

  o    Direct a recipient to award a contract to a specific  -:.
       individual or  firm.                                       «.,

  o    Participate in the negotiation or award of a contract  >:-•- '
       under a grant  or cooperative agreement.               .  :

o EPA employees may:              .   •/•               ••
                                                      *
  o    Approve the key  personnel of the grantee organization and
       the project director or principal investigator.

  o    Review and comment on a grantee's procurement process or a
       particular procurement action.

  o    Participate in review panels to make recommendations on
       qualified offers and acceptable proposals based on
       published.evaluation criteria.

  o    Upon request by  a recipient organization, EPA employees-
       may provide a  reference for individuals who are employed
       by EPA contractors and who are being considered for
       employment by  the recipient institution to work on EPA
       matters.  In doing so, however, EPA employees should take
       great care to  avoid even the appearance of undue influence
       in hiring decisions, especially EPA officials who have a
       role in selecting the assistance recipient or in defining
       the scope and  amount of the assistance received.

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                f.'
                            _ -3- •

     In summary,.it is inappropriate for Agency staff to direct
or require the use of particular persons or firms by assistance
recipients in the performance of a grant or cooperative
agreement.    • ..       .                  '                   . ...

     Should you have any questions on this memorandum, please
contract Bruce Feldman in the Grants Administration Division on
(202) 260-5268.
cc:  David O'Connor
     Harvey Pippen
Gary Katz
Clarence Kahan

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         -Ant
           APPENDIX O
 40 CFR PART 30, GENERAL REGULATION
FOR ASSISTANCE PROGRAMS FOR OTHER
THAN STATE AND LOCAL GOVERNEMNTS

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I:
te
KJ-'-
i-pr. l. *:
5- -;iv ; -f'; •"

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  Environmental Protection Agency                                       •«. ~
                                                                           4Tt. 30

   SUBCHAPTER 1-0RANTS AND OTHER  FEDERAL ASSISTANCE
  PART   30—GENERAL   tEOULATION
    FOR ASSISTANCE PROGRAMS FOR
    OTHER THAN STATE  AND LOCAL
    GOVERNMENTS
  Svbpwt A— WN*t It Hw
 Sec.
 30.100  What IB the purpose of this regula-
     lion?
 30.101  What is the scope of this regu«a-
     tion?
 30.102  What laws  authorize  EPA  to Issue
     this regulation?
                                  — *
                                  fim
 30.300  What definitions apply to this regu-
    lation?
                                t*c»tv«
               Assistance?
 30.300 What activities does EPA fund?
 30.301 To whom does EPA award  assist-
    ance?
 30.302 How do I apply for assistance?
 30.303 What steps must I take when filing
    a standard application?
 30.304 Is the information "I submit to EPA
    confidential?
 30.305 How do I find out if EPA approved
    or disapproved my application?
 30.306 How long will I have to complete my
    project?
 30.307 How much must I contribute  to the
    funding of my project?
 30.308 When may I begin incurring costs?
 30.309 What Is the effect of accepting  an
    assistance agreement?-

     lutpart P. Hew stow  IF A Pry M«?

 30.400 How does EPA make payments?
 30.405 Can I assign my payment to anyone
    els*?
 30.410 How does EPA determine allowable
    costs?
 30.412 How are costs categorized?
                   i
My AwwrfT
30.500  What records must I maintain?
30.501  How  long  must  I  keep  thi
   records?
30.502  To whom must my contractor and I
   show these records?
                Sec.
                30.503  What  type of  quality assurance
                   practices am I required to have?
                30.505  What reports must I submit?
                30.510  What type of financial management
                   system must I maintain?
                30.515  What restrictions on signs, surveys.
                   and questionnaires must I observe?
                30.518 -What are the  procedures for pub-
                   lishing scientific,  informational,  and
                   educational documents?   .            -
                30.520 When may I use my  own employees
                   ("force account")?
                30.525 How  should  I  treat  program
                   income?
                30.526 How do I treat interest earned on
                   EPA funds?
               30.530 May I purchase  personal  property
                   using EPA aiHilstanrr funds?
               30.531  What property management stand-
                   ards must I follow for nonexpendable
                   personal  property purchased  with  an
                  EPA award?
               30.532  How do I dispose of  personal prop-
                  erty?
               30.535  May I purchase real  property with
                  EPA awarded funds?
               30.536  How do I manage Federally-owned
                  property?
               30.537  Are contractors required to comply
                  with EPA property policies?
               30.538  May I use General Services Admin-
                  istration (GSA) supplies and services?
               30.540  Who will audit my project?
               30.541  What are my audit responsibilities?
           Mast I Cestpfr With?

30.600  What Federal  laws  and  policies
   affect my award?
30.601  Are there restrictions on the use of
   assistance funds for advocacy purposes?
30.603  What additional Federal laws apply
   to EPA assisted construction projects?'
30.610  What are my  responsibilities for
   preventing and  detecting fraud  and
   other corrupt practices?
30.611  Can I hire a person or agency to so-
   licit EPA assistance for me?
30.612  May an  EPA employee  act  as my
   representative?
30.613  What Is EPA's policy on conflict of
   interest?
30 615  May I employ a former EPA  em-
   ployee and still receive assistance?

 Suhpad 0   C«n «n
              30.700  What changes  to  my sssistance
                 agreement require a formal amendment?

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$30.100
                           40 CR Ch. i (7-1-tl Mtie»i)
See.
30.T05  Whmt ehmntes can I make to my as-
   sistance  agreement without  a formal
   amendment?
30*710  Can I terminal* a part or all of my
   assistance agreement?
30.800  What records  and report* must I
   keep after I complete my project?
30.802  Under what conditions will  I  owe
   money to EPA?
 fcifcpmt I—What
•My if A T«*«
  it
30.900  What measures may EPA take tot
   non-compliance?
30.901  What are  the  consequences  of  a
   stop-work order?
30.902  What are the consequences of with-
   holding payment-
30.903  What are  the consequences of ter-
   mination for cause?
30.904  What are  the consequences of an-
   nulment?
30.905  May I request a review of a termina-
   tion, or annulment?
30.906  What are  the consequences of sus-
   pension or debannent?
30.1001  WD1 EPA approve any exceptions
   to these regulations?
30.1002  Who may request a deviation?
30.1003  What information must I Include
   In a deviation request?
30.1004  Who approves or disapproves a de-
   viation request?
30.1005  May I request a review of a devi-
   ation decision?
30.1100  What assistance  agreements are
   subject to EPA patent rules?
30.1101  What Federal patent laws or poli-
   cies govern my asslntnvr agreement?
30.1102  What are my Invention rights and
   my reporting requirements if my award
   is other than an award  under section
   6914 of RCRA?
30.1103  What are my invention rights and
   obligations if I am a profitmaklng firm
   with  an award  under section 6914 of
   RCRA?
30.1104  Can I get  a waiver from section
   6981(0 Of RCRA?
30.1106  Do the patent rules apply to suba-
   greements?
30.1108  Does  EPA  require any type of li-
   censing of background patents  that I
   own?
                  30.1112 Are there any other patent
                      or conditions that apply to my a1
                  30.1130 What rights In data and cop;
                      does EPA acquire?
                                                                           fPA
                                         30.1200  What happens If an EPA official
                                             and I disagree about an assistance agree-
                                             ment requirement?
                                         30.1205  if 1 me a request for review, with
                                             whom must I file?
                                         30.1210  What must I Include in ray request
                                             for review or reconsideration?
                                         30.1215  What are my rights after I file a
                                             request for review or reconsideration?
                                         30.1220  If the Assistant Administrator con-
                                             firms the  final decision of  the Head-
                                             quarters disputes decision official, may I
                                             seek further administrative review?
                                         30.1225  If the Regional Administrator con-
                                             firms the final decision of the Regional
                                             disputes decision official, may I seek fur-
                                             ther administrative review at EPA Bead-
                                             quarters?
                                         30.1230  Will I be charged interest if I owe
                                             money to EPA?
                                         30.1235  Are there any EPA decisions which
                                             may. not be reviewed under this subpart?
                                                   AFPBIBICB TO PABT 30
                  AFPDIDCK A—EPA PBOO*AMS '
                  APFBIDXX  B—PAIDTTS  AMD   COPTMGBTS
                      CiAVSts
                  Armrotx C—RIGHTS  of  DATA AJTO COFT-
                      UOBTS
                  Amroix D—P.AXT 30 RsvoKTDta RBQUXBX-
                   Armntix E—PAST 30 Amur RMuruaczim
                      K>a STATS AMD LOCAL Oovmncnrr RE-
                      CLPlBJfTS

                    AuTHommr 33 TJ.S.C. 1281 tt MO;.; 42
                   UAC. 7401 et Meg.: 42 U.S.C. 6901 et teg.; 42
                   TJ.S.C. 3001 et teg.; 7 UAC. 136 ft teg.; 15
                   OAC. 2601 et teg.: 42 U&C. 9601 et teg.
                    SoUftCC  48 PR 45062.  Sept.  30.  1983.
                   unless otherwise noted.
                                          Subpart A—Wrwrt to MM PurpOM and
                                                 Scop* of this ••cjwtatfeit?

                                          fl 30.100 What is the purpose of this regu-
                                              lation?
                                            (a) The U.S. Environmental Protec-
                                          tion Agency (EPA) Is  responsible  for
                                          protecting and enhtp^"! the quality
                                          of the environment. To achieve
                                          objectives, EPA may award
                                          In  the  form  of  gnats, cooperatve
                                          agreements, or fellowships to support:
                                       326

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 Environmental Prafvcfton Ag«ncy

 (1) State and local pollution  control
 programs; (2) research, demonstration.
 or training  projects:  and  (3) other
 projects that advance EPA's mission.
 This regulation tells how to apply for
 and manage an EPA project, describes
 EPA involvement in the process, and
 identifies  recipients'  responsibilities.
 Other EPA assistance regulations sup-
 plement these. They are found in 40
 CFR part 32 fDebarment). pan  33
 (Procurement Under Assistance Agree-
 ments), part 35 (State and Local As-
 sistance), part 40 (Research and Dem-
 onstration), part  45  (Training) mid
 part 46 (Fellowships).
  (c) This regulation incorporates the
 requirements  of Office  of Manage-
 ment  and Budget (OMB) Circulars
 and EPA Orders.
  (d)  Recipients must  provide  the re*
 porting information required  In this
 part to be eligible for  EPA assistance
 awards.
  NOTK The OMB clearances required by
 the Paperwork Reduction Act are Identified
 in Appendix D to this part.

 § 30.101  What to the scope of this regula-
   tion?
  This regulation coven  financial as*
slstance awards made as grants or co-
 operative agreements  under require-
 ments of the Federal .Grant and Coop-
 erative  Agreement Act  (Pub.  L. 95-
 224). It does not cover direct EPA con*
 tracts under which EPA acquires prop-
erty or services for its use.

 S 30.102  What laws authorize EPA to latue
   this regulation?
  Reorganization Plan  Number  3  of
 1970  and the  following  statutes au-
 thorize the Administrator of EPA to
 issue this regulation.
  (a) The Clean Water Act,  as amend-
ed (33 U.S.C. 1251 et teg.);
  (b) The Clean Air Act, as amended
 (42U.S.C. 7401 «t sec.);
  (c) The Solid Waste Disposal  Act, as
amended (42 UJ5.C. 6901 et see.);
  (d) The Safe Drinking Water  Act. as
amended (42 O.S.C. 300f et teg.);
  (e> The Federal  Insecticide.  Fungi-
cide, and Rodenticide Act. as amended
 (7 O.S.C. 136 et seo.);
  (f)  The Toxic Substances Control
Act (15 U.S.C. 2601 et teg.)', and
                            §31200

  (g) The Comprehensive Environmen-
tal Response, Compensation, and Li-
ability Act Of 1980 (42 O.S.C. 9601 et
seg.}.

(48 PR 45062. Sept. 30. 1983; 49 PR 38944.
Oct. 2. 1984]

 Subpart B—What Definitions Apply
         to this Refutation?

S 30.200  What definitions  apply  to  this
    regulation?
  Allowable cottt. Those project costs
that are: eligible,  reasonable,  neces-
sary, and allocable to the project: per-
mitted by the appropriate Federal cost
principles,  and  approved by EPA in
the assistance agreement.
  Applicant  Any entity  that files an
application or unsolicited proposal for
EPA  financial assistance under this
subchapter.
  Assistance  agreement The legal in-
strument EPA uses to transfer money,
property,  services,  or  anything  of
value to a recipient to  accomplish a
public purpose. It is either a grant or a
cooperative agreement and  will speci-
fy: budget  and project periods;  the
Federal share of eligible project costs;
a description of the work to be accom-
plished; and any special conditions.
  Award official  The  EPA  official
with the authority to execute  assist-
ance agreements and to take other ac-
tions  authorized by this subchapter
and by EPA Orders.
  Budget period. The length of time
EPA specifies in an assistance  agree-
ment  during which the recipient may
expend or obligate Federal funds.
  Consolidated assistance.  An  assist-
ance agreement awarded under more
than one EPA program authority or
funded  together with  one or  more
other Federal agencies. Applicants for
consolidated assistance  submit  only
one application.
  Continuation  award  An  assistance
agreement  after the initial award, for
a  project which has more  than one
budget period in its approved project
period,  or  annual  awards,  after  the
first award,  to State,  Interstate, or
local agencies for continuing environ-
mental programs (see 130.306).
  Contractor. Any party to whom a re-
cipient awards a subagreement.

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§91200

  Cooperative agreement  An  assist-
ance agreement la which  substantial
EPA involvement is anticipated during
the performance of the project (does
ribt include fellowships).
  Coat sharing. The portion of allow-
able project costs that a recipient con-
tributes toward completing its project
(i.e.,  non-Federal  share,  matching
share).
  Environmentally  related measure-
ment*. Any  data collection activity or
investigation involving the assessment
of chemical, physical, or biological fac-
tors in the environment which affect
human health or the quality of life.
The following are  examples of envi-
ronmentally related measurements: (a)
A determination of pollutant concen-
trations from sources  * in the ambi-
ent environment, including studies of
pollutant transport and fate; (b) a de-
termination of the effects of  pollut-
ants on human health and on the en-
vironment; (c) a determination of the
risk/benefit of pollutants in the envir*
oment;  (d)  a determination  of the
quality of environmental data used In
economic studies; and (e) a determina-
tion of  the environmental impact  of
cultural and natural processes.
  Expendable  personal  property.  All
tangible personal property other than
nonexpendable personal property.
  force account worfc. The use of the
recipient's  own  employees or  equip-
ment for construction, construction-re-
lated  activities  (including A  and E
services), or for repair or improvement
to a facility.
  Foreign award*. An EPA award of
assistance when all  or part of  the
project Is performed in a foreign coun-
try by (a) a U.S. recipient, (b) a for-
eign recipient, or CO  an international
organization.
  Formal amendment A written modi-
fication of  an  M««gtAn** agreement
signed by both  the authorized repre-
sentative  of the  recipient and the
award official.
  Grant   agreement  An  assistance
agreement that does not substantially
involve EPA in the project and where
the recipient has the authority and ca-
pability to  complete all elements of
the program (does not include fellow-
ships).
        40 CF* CX. I C7-!-f 1 UMtofi)

  In-kind contribution. The value of a
non-cash contribution to meet a recipi-
ent's cost sharing requirements. An in-
kind  contribution  may  consist  of'
charges for real property and equip-
ment or the value of goods and serv-
ices   directly   benefiting  the  EPA
funded project.
  Nonexpendable personal  property.
Personal property with a useful life of
at least two years and an  acquisition
cost of f 500 or more.
  Personal property.  Property other
than real property. It may be .tangible
(having physical existence), such  as
equipment and supplies,  or intangible
(having no physical existence), such as
patents, inventions, and copyrights.
  Program, income,  Gross income the
recipient  earns  during  its  project.
period from charges for the  project.-
This may  Include income from service'
fees, sale  of commodities, trade-in  al-:
lowances.  or usage or rental fees.  Fees
from  royalties  are  program  income
only  If  the assistance agreement  so
states. Revenue generated under the
governing powers of a State or .local
government which could  have ibeen
generated  without  an award  is not
considered program income. Such rev-
enues include fines or penalties levied
under judicial or penal power and  used
as a means to enforce laws. (Revenue
from  wastewater treatment construc-
tion  .grant projects under Title II  .of
the Clean Water Act, as amended, is
not program income. It must  be  used
for operation  and maintenance costs
of the  recipient's  wastewater facili-
ties.)
  Project  The activities or tasks  EPA
identifies  in the assistance  agreement.
  Project costs. All costs  the recipient
incurs in  carrying  out  the  project.
EPA  considers  all allowable  project
costs  to include the Federal share.
  Project officer. The EPA official des-
ignated in the assistance  agreement as
EPA's program contact with the recip-
ient.  Project officers are responsible
for monitoring the project.
  Project  period. The length  of  time
EPA  specifies  in the assistance agree-
ment for  completion  of all  project
work. It  may  be composed of more
than  one budget period.
  Quality  assurance  narrative state-
ment. A description of how precision.
                                   328

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 imdraniaentd Protection Agency

 accuracy,   representativeness,  com-
 pleteness, and compatibility will be as-
 sessed, and which la  sufficiently de-
 tailed to allow an unambiguous deter*
 mlnation of  the  quality  assurance
 practices to be followed throughout a
 research project.
  Quality assurance program plan.  A
 formal document which  describes an
 orderly assembly of management poli-
 cies,  objectives,  principles,  organiza-
 tional responsibilities,  and procedures
 by  which  an agency  or laboratory
 specifies how it Intends to:
  (a)  Produce  data  of  documented
 quality, and
  (b)  Provide  for the  preparation of
 quality assurance  project plans  and
 standard operating procedures.
  Quality assurance project  plan. An
 organization's   written   procedures
 which delineate how it produces qual-
 ity data for a  specific project or meas-
 urement method.
  Real property. Land,  including land
 improvements, and structures and ap-
 purtenances,  excluding  movable  ma-
chinery and equipment.
  •Recipient  Any entity which  has
 been awarded  and accepted an EPA as-
sistance agreement.
  Standard  operating  procedure.  A
 document which describes in detail an
 operation, analysis, or  action which  is
commonly  accepted as the preferred
method for performing certain routine
or repetitive tasks.
  SubaffreemenL A written agreement
 between an EPA recipient and another
party  (other  than another public
agency) and any lower tier agreement
 for  services, supplies,  or  construction
necessary to complete the project Su-
bagreementa  include  contracts  and
subcontracts for personal and profes-
sional services, agreements with con-
sultants, and purchase  orders.
  Violating facility. Any  facility that
is owned, leased, or supervised  by an
applicant, recipient, contractor, or sub-
contractor  that EPA  lists under 40
 CFR part 15 as not in compliance with
Federal, State, or local requirements
 under the Clean Air  Act or  Clean
Water Act. A  facility includes  any
 building, plant, installation, structure,
 mine, vessel, or other floating craft.
  Unsolicited  proposal.  An  informal
 written offer  to perform  EPA funded
                            §9QJ01

work for which EPA did not publish a
solicitation.

(48 PR 48062. Sept. 30. 1983. as amended at
49 PR 38944, Oct. 2. 1984]

 Support C—How do I Apply for end
         Receive Assistance?

9 30.300  What activities does EPA fund?
  EPA awards assistance  to support
various activities tliat protect the envl
ronment and reduce or control pollu-
tion. EPA groups these activities into
the following  types of assistance pro-
grams:
  (a) State and local pollution control;
  (b)   Construction  of   waste water
treatment works;
  (c) Research;
  (d) Demonstration:
  (e) Training;
  (f) Fellowships;
  (f) Special investigations, surveys or
studies; and
  (h) Consolidated assistance.

6 30.301  To whom does EPA award as*i»t-
      •9
  (a) EPA awards assistance  only  to
applicants which are eligible under ap-
plicable statutes and regulations and
which have the ability to meet the fol-
lowing criteria:
  (1)  Financial resources,  technical
qualifications,  experience,  organiza-
tion, and  facilities adequate to carry
out the  project, or  a  demonstrated
ability to obtain these;
  (2) Resources to meet  the project
completion schedule contained in the
assistance agreement;
  (3)  A   satisfactory   performance
record for completion of projects and
subagreements:
  (4) Accounting and auditing proce-
dures adequate to control  property,
funds, and assets,  as  required in sub-
part E of this part;
  (5)  Procurement   standards  that
comply with part 33 of this subchap-
ten
  (6) Property management systems
for acquiring,  ififtintA
-------
 §30409

 law, and other statutory requirements
 under subpart F of this part.
  (b) EPA considers your submission
 of an assistance application as your as-
 sttrance that you  can and will meet
 these  standards. EPA may conduct a
 preaward audit or  other review to de-
 termine your capabilities.
  (c) EPA must notify you in writing if
 it  finds you unable to meet these
 standards.  The written notice  will
.state the reasons for the finding. You
 may appeal EPA's findings under the
 disputes procedures in subpart L.
  (d) Individuals, agencies,  or  organi-
 zations voluntarily excluded, suspend-
 ed, or debarred under 40 CFR  part 32
 are ineligible to receive assistance.

 9 30.302 How do 1 apply for assistance?
  (a) You must submit a -tahdard ap-
 plication to apply for EPA assistance.
  (b) Before you file an application to
 perform unsolicited work, you  may
 submit an unsolicited proposal, EPA
 will apprise you of your proposal's po-
 tential for funding.
  (c) You can get program Information
 and an  application kit with instruc-
 tions  from  the EPA grants  office
 which is responsible for administering
 that program. Regional EPA grants of-
 fices provide and  review applications
 and award assistance for State  and
 local pollution control projects. State
 water pollution control agencies  pro-
 vide and review applications for grants
 for the construction  of  wastewater
 treatment facilities. EPA  Headquar-
 ters provides and reviews applications
 for and awards research, demonstra-
 tion, fellowships,  training, special in-
 vestigations, surveys, studies, and most
 training assistance.
  (dxi) For  assistance agreements
 awarded  for Fiscal Year  1984,  you
 must develop and implement a quality
 assurance  program acceptable  to the
 award official if your proposal involves
 any environmental  related  measure-
 ments or data generation.  Except as
 noted in paragraphs (d) <2) and (3) of
 this section,  your application  for fi-
 nancial assistance must include a qual-
 ity assurance plan which meets the re-
 quirements in i 30.503. If you  already
 have an EPA approved quality assur-
 ance  plan, you need only  reference
 that plan in your application, provided
         40 Cft Ch. I (7-1-91

the plan coven the project in your ap-
plication.

[48 PR 45062. Sept. 30. 1983; 49 FR 38944,
Oct. 2. 1984. u  amended at 53 FR 8078.
Mar. 11.19881

030403  What steps  mutt I take when
   filing • standard application?
  (a)  Before  you file an application.
you must complete the forms accord-
ing to the instructions.  At  least one
copy  of  the  completed application
must  have an original signature of the
person authorized to obligate you or
your  organization to the terms  and
conditions of EPA's regulations  and
assistance agreement.
  (b) You must:
  (1)  Comply with your  State's inter-
governmental review process, if it es-
tablished one under Executive Order
12372. See 40  CFR pan 29 (48 FR
29288, June 24.1983).-
  (2) Comply with the areawide review,.
requirements of section 204 of the?
Demonstration Cities |.and Metropoli-
tan  Development  Act  of  1966. as
amended (42  U.S.C.  3334)  if your
project will be  located  in a metropoli-
tan area. EPA programs  that are sub-
ject to areawide review are listed in 48
FR 29304, June 24. 1983. and marked
with an asterisk (•).

830.304  h  the  Information 1 submit to
   EPA confidential?
  (a) Generally, the information is not
confidential. When EPA receives your
assistance  application  or unsolicited
proposal the information you submit
becomes part of the Agency's records.
As such, it Is subject to  EPA's disclo-
sure  of  Information policy (40 CFR
part 2) which  is based on the provi-
sions  of  the  Freedom  of Information
Act (5 U.S.C. 552) and on the provision
for patents  and rights  in  data  and
copyrights under subpart K of  this
part.
  (b)  If  you  submit data, documents,
or parts  of documents  which you con-
sider  to be confidential, you  should
clearly identify them with the words
"trade secret,"  "proprietary," or "busi-
ness  confidential."  For further to]
structions on assertion of confidential
ity claims, see 40 CFR part 2, subpart
                                    330

-------
 BflVlf&fUSKMivQl FVOMCfMH
 f 30J06 How do I find oat if EPA ap-
    proved or disproved my application?
  (a> If EPA approves your applica-
 tion. the award  official will prepare
 and st&n an assistance agreement and
 send it to you for signature. Your au-
 thorized representative  must either
 sign and return the agreement to EPA
 within three calendar weeks after you
 receive it or request EPA  to extend
 the time for acceptance. If you do not
 sign or request an  extension within
 the three week period, the assistance
 agreement is null and void.
  (b) If EPA disapproves your applica-
 tion. it will  promptly notify you in
 writing. You may appeal EPA's disap-
 proval under subpart L.
  (c) Sometimes.  EPA  will defer  your
 application. You will  be notified in
 writing of this decision.

 8 30J06  How long will I have to complete
    my project?
  (a) Your assistance  agreement will
state the  length of  your approved
budget  period(s)  and  project period.
Subject to statutory provisions,  your
approved project period may include
more than one budget period. In this
case, you must submit a continuation
application to EPA to request funding
 for each budget period after the initial
one. EPA makes  continuation awards
subject to availability of funds and
 Agency priorities, (Assistance awards
 under  40 CFR part 35, subpart A, do
not have project  periods, but recipi-
 ents of such awards may receive con-
 tinuation awards.)
  (b) The  continuation  application
 must include:
  (DA detailed progress report for the
 current budget period;
  (2)  A  preliminary financial  state-
 ment for the current budget period
 that includes estimates of the amount
 you expect to spend by the end of the
 current budget period and the amount
 of any uncommitted funds which you
 propose to carry over beyond the term
 of the current budget period;
  (3) A  budget for the  new budget
 period;
  (4) A detailed work:  plan revised to
 account  for  your actual accomplish*
 ments  during  the  current budget
 period;
                           §30307

  (5) An Invention report, if appliea-

  (6) Any other reports that the assist-
ance agreement may require.
  (c) If approved by the award official.
you may carry over unexpended  prior
year funds: (1) In lieu of new funds;
(2) to complete work started in  prior
years; or (3) to supplement the new
award.  You  must meet  all program
and cost sharing requirements in each
budget period to carry over funds.
  (d) If EPA executes a  continuation
agreement.  EPA  will reimburse you
for allowable costs you incur between
the end of a budget period and date of
award for the next budget period pro-
vided you submit a continuation  *opli-
cation  before the expiration c.  .he
prior budget period.

(48 FR 45062. Sept. 30.1983. u,amended at
49 FR 38944. Oct. 2.1984]

§30407  How much mutt I contribute to
   the funding of my project?
  (a) The amount of cost sharing you
must contribute  depends  upon  the
statutory and regulatory cost  sharing
provisions that apply to  your specific
assistance project (see 40 CFR parts 35
and 40). You must contribute  at least
a 5 percent share of the total allow-
able  project costs  for each  budget
period unless,'
  (DA lesser amount is specified in
the respective statute or regulation ap-
plicable to your project; or
  (2) The assistance agreement is for a
remedial planning action under  the
Comprehensive  Environmental   Re-
sponse.  Compensation,  and Liability
Act of 1980.
  (b) You may satisfy the requirement
for cost sharing with cash  or.  when
not prohibited by statute  or regula-
tions, with  in-kind contributions. Your
contribution may  not be  paid with
Federal funds or with  property or
services received under another assist-
ance agreement, unless authorized by
statute. Additionally, your  contribu-
tions must be:
  (1) Negotiated before and specified
in your assistance agreement;
  (2) Verifiable from your records;
  (3)  Used  exclusively for  a single
project; and
                                   331

-------
  (4) Properly allocable to and allow-
able under the project.
  (c) All project expenditures by the
recipient shall  be deemed to include
the Federal share.
(48 FR 45062. Sept. 30. 1983: 49 FR 38944.
Oct. 2. 1984)

930.308  When  may I  begin  incurring
   costs?
  (a)   Except    as    permitted   In
5 30.306(d), paragraph  (b) of  this sec-
tion, or  other .EPA regulations, the
award  official and you must  sign the
EPA assistance agreement before you
incur costs.
  (b) You may incur costs between the
date the award official signs the assist-
ance  agreement  and  you sign  the
agreement,  provided  the  costs  are
identified in the  agreement  and you
do not change the agreement.
(49 PR 38944. Oct. 2.1984]

130JOS  What to the effect of accepting an
   assistance agreement?
  (a) When the award official signs
the assistance agreement. EPA will ob-
ligate Federal funds for the amount
stated  in your assistance  agreement
for the purposes of the award. EPA is
not obligated to provide Federal funds
for any costs incurred by you  in excess
of the  Federal share of your approved
budget. (See subpart O of this part.)
  (b)  The  award  of an assistance
agreement constitutes a public trust.
By signing and accepting an assistance
agreement, you become responsible for
complying with all terms  and condi-
tions of your assistance agreement, in-
cluding any special  conditions neces-
sary to assure compliance with EPA
policies and objectives, this  subchap-
ter, and any other applicable statute
or  regulation.  You must efficiently
and effectively manage your project,
successfully complete  the  project ac-
cording to the schedule, and meet all
monitoring  and   reporting  require-
ments. You may not delegate or trans-
fer this responsibility.
        40 Cfll Qi. I (7-1-91 ftJMon)

 Subpart D—H«w *»•» EPA Pay M«?

9 30.400  How doe* EPA make payments?
  (a) EPA will  promptly pay you for
allowable  costs you incur in accord-
ance with EPA regulations  and your
assistance agreement.  If at any time,
EPA determines you received payment
for unallowable cost  or received  an
over-payment, you are required to  re-
imburse EPA. (See § 30.802.)
  (b) Your assistance agreement will
specify one of the following ways for
EPA to pay you. You will receive the
appropriate forms  and instructions
with your assistance agreement. •
  (1) fly letter of credit. EPA will pay
you by the letter of credit method, it
you meet the Treasury Department's
criteria contained in Treasury Circular
No. 1075. as revised. You must estab-
lish  a separate bank account when
payments under a letter of credit are
made on a "check-paid"'basis.   v;.  i
  (2) By advance. If you do not qualify
for a letter of  credit, EPA  may pay
you by the advance payment
You must negotiate  the amount
your initial advance with the award of-
ficial The negotiated amount should
not exceed the  cash you will need for
the first three months of operation.
You must request the initial advance
on Standard Form 270  (SF  270. "Re-
quest  for Advance  or Reimburse-
ment") which will be included in your
award package. EPA will issue a check
for the  first three months  or  one
check each month (at EPA's option) to
pay the advance. After your  initial ad-
vance, you must submit an SF 270 at
least  quarterly, but not more often
than monthly,  indicating the amount
of your expenditures to date and your
request for  funds for the  coming
period.
  (3) By reimbursement. If you do not
meet letter of  credit requirements or
receive  advance payments,  EPA will
pay you by reimbursement. Also, EPA
generally will pay you under the reim-
bursement method if you are receiving
assistance  under  EPA's wastewate
treatment  construction grants
gram (see 40 CFR part 35, subpart
When EPA pays by this method, you
will be reimbursed for costs which you
                                   332

-------
 have Incurred and are currently
 legally oMlgatart to pay.

 • 3t,4tf  Gan  I  aamga  my  payment to

  Except as provided for in 40 CFR
 35.2028 of  EPA's  wastewater
 treatment construction grants regula-
 tion, you cannot assign your right to
 receive payments  under your assist*
 ance agreement. EPA will  make pay-
 ments only to the payee Identified in
 the assistance agreement.
         How
KPA determine allow.
  To be allowable, coat* mint meet ap-
plicable statutory provisions a&d Fed-
eral cost principles. ~*?A uses the fol-
lowing cost principles in determining
allowable costs for all EPA asulntance
HgTf f Illf IllJl fTUt IP1 fr>tI ""fPCTlto MH0HT
them, except as otherwise provided by
statute or this subchapter. Regardless
of whether the organization is the re-
cipient of the award or  is performing
services for the recipient, the nature
of the organization is the sole criterion
for determining applicable cost princi-
ples.
  (a) Stale  and  local   government*
must use OMB Circular A-87 to deter-
mine allowable costs;
  (b) Educational institution*  must
use: (1) OMB Circular A-21 cost prin-
ciples for research and  development.
training, and other educational serv-
ices under grants, cooperative  agree-
ments,  and  subagreementa, and  (2)
OMB Circular  A-88 which provides
principles for coordinating the  estab-
lishment of indirect cost rates and the
auditing of grants,, cooperative  agree-
ments, and subagreements;
  (c)  Other  non-profit  institutions
must use OMB  Circular A-122, as re-
vised:
    Profit-making  organization*
must use Federal  Acquisition Regula-
tion 48 CFR subparts 31.1 and 81.2;
  (e) Hospital* must use 45 CFR part
74, Appendix E.

[48 PR 45062. Sept. 30, 1983, M amended at
49 PR 38944, Oct. J. 19t4]
130.412  Bow an.
  (a)  Costs are categorised as being
either a direct cost if they support a
specific project  only or as an indirect
                            I

cost as described m the applicable cost
principles  (see 130.410). To receive
payment for Indirect costs, you must
have negotiated an indirect cost rate
with your cognfrant Federal Agency
and your assistance agreement must
provide for the use of that rate.
  (b) You may request  a special indi-
rect cost  rate. If  (1) your project is
conducted at an off-site  location; or (2)
your  project  is  a  large,  one-time
project  and its costs would distort the
normal  direct cost base used in com-
puting the Indirect cost rate.

  Subpart I— How do I  Manege My
              Award?

830.500  What records most I maintain.'
                       (a)  You  must  »»i»»«fa»   official
                     records for each assistance award you
                     receive and  Identify  them with EPA
                     assistance    Identification  numbers.
                     These records. must  contain  the fol-
                     lowing Information:
                       (1) Amount received and expended
                     for the. project, including all Federal
                     and cost «H*Htif funds;
                       (2) Program income;
                       (3) Total cost of the project (both
                     direct and Indirect costs);
                       (4) Property purchased under the
                     award or used as part of  your in-kind
                     contribution;
                       (5) Time record* and other support-
                     ing data, Institutions of higher educa-
                     tion may account for the distribution
                     of salaries and wages of professorial or
                     professional   staff    by   budgeted.
                     planned, or assigned work activity if
                     the' system  for  wages and  salaries
                     meets the requirements in OMB Circu-
                     lar A-21;
                       (6)  Documentation  of compliance
                     with  applicable statutes  and  regula-
                     tions.
                       (b) Your contractor must
                     books, documents, papers, and records
                     pertinent to the project.

                     (48 PR 45082. Sept. 30. 1983, ai amended at
                     49 PR 38945. Oct. 2. 19841
                     930.501  How long
                         reeordi?
                        I  koto taeoe
                       (a) Generally you and your contrac-
                     tor must keep all records for three
                     years from the  end of the project.
                     Except  for real property and  nonex-

-------
                                               40 GR d*. I (7-1-91
pendable personal  property records.
the  beginning date  of the three year
period depends on the type of project
you  are conducting, as follows:
  fl) For research, demonstration, and
training  programs,  the  submission
date of a final Financial Status Report
(SF-269);
  (2) For construction awards,  the ap-
proval date of EPA's final payment for
the project.
  (b) You must keep your records on
real  property and nonexpendable per-
sonal property for  three years  from
the date of final disposition.
  (c) If  EPA terminates  your award,
you  must  keep all  records  for three
years  from  the termination  date,
except as provided in paragraph (b) of
this  section.
  (d) If  litigation, a claim,  a  dispute
under subpart L, or an audit la begun
before  the  end  of  the three  year
period, you must keep all records until•'
the  three years  have passed or  until
the litigation, dispute, claim, or audit
is completed and resolved,  whichever
is longer.
C48 FR 45082.  Sept. 30. 1983; 49 FR 38945.
Oct.  2.  1984. as  amended at S3 FR 8078,
Mar.  11.1988)

8 30.502  To whom must my contractor and
   I show these rtcordi?
  You and your contractor must allow
the project officer and any authorized
representative of EPA, Including the
Office   of  Inspector  General,  the
Comptroller  General of the  United
States, the Department of Labor, or a
representative  of  delegated  States
under  the  wastewater treatment  con-
struction grants  program, to Inspect,
copy, and  audit records pertinent to
the  project.  Access  to records is not
limited to the required retention peri-
ods.  You and  your  contractor  must
allow access to records at any reasona-
ble time for as long  as the records are
kept.

§30.503   What tyj* of quality auunnec
   practices am I required to have?
   Ii your project involves environ-
mentally  related  measurements  or
data generation, you must develop and
implement quality assurance practices
consisting of policies, procedures, spec-
ifications,  standards, and documenta-
tlon which will produce data of quality
adequate to meet project objectives
and will minim
-------
 surance project plan acceptable to the
 award official. (For assistance ID pre-
 paring-  » quality assurance  project
 plan  tee "Interim   Guidelines  and
 Specifications for Preparing Quality
 Assurance  Projects   Plans" QAM8-
 005/80.  This document  (EPA-600/4-
 83-004;  NTLS PB 83-170514) may be
 obtained from the National Technical
 Information Service, 5885 Port Royal
 Road.  Springfield.   Virginia  22161.)
 The project plan must address the fol-
 lowing items:
  (1) Title of project and name of prin-
 cipal investigators);
  (2) Table of contents of project pl&n;
  (3) Project description:
  (4) Project organization and respon-
 sibilities:
  (5) Quality  assurance objectives anJ
 criteria for determining precision, ac-
 curacy,  completeness, representative-
 ness. and compatability of ilatJi!
  (6) Sampling procedures;
  (7) Sample custody;
  (8) Calibration procedures and fre-
 quency and traceabUlty of standards;
  (9) Analytical procedures;
  (10) Data reduction, validation, and
 reporting;
  (11) Internal quality control checks;
  (12) Performance and system audits;
  ( 13 ) Preventive
  (14) Specific standard operating pro-
cedures used to amem data precision,
accuracy, representativeness, and com-
parability;
  (15)  Corrective action 'for  out-of-
control situations; and
  (16) Quality assurance reporting pro-
cedures.
(48 PR 450*2. Sept. SO. IMS; 49 PR 3894B.
Oct.  3, 1984. at  amended at S3 PR 8076.
Mar. 11. 1988]

830.506  What reports most I rabmH?
  (a) Interim and Anal  prognu re-
ports. You  must  submit  interim and
final progress reports if the assistance
agreement or EPA regulations  require
them. See 40 CFR parts 35, 40, and 45
for specific  requirements. EPA or its
authorized  representatives  may  In-
spect your project at any reasonable
dme to review its progress.
  (b) Financial report*. (1) You  must
submit a Financial Status Report (SF
269) within  90 days  after each budget
period and  within 90 days after the
                            920510

end of your project completion or ter-
mination.  If  either  the  Financial
Status Report (FSR) you submit after
the budget period or  the PSR you
submit after your project is completed
or  terminated includes . unliquidated
obligations, you  must submit a final
FSR Immediately after those  obliga-
tions  are  liquidated. If you do not
submit a final FSR within a reasona-
ble time after the  90 day period, the
award official may  disallow the unliq-
uidated obligations.
  (2) Recipients  of fellowship assist-
ance  agreements  do  not  have  to
submit FSR'5.
  (c)  Invention  report*.  You  must
report all inventions to the award offi-
cial (see subpart K for detail.}.
  (d) Report on federally-owned prop-
erty.  You must submit an imp"*1 in-
ventory of all Federally-owned proper-
ty used on your project At the end of
the project period, or  when you no
longer need the  property, you must
submit a final Inventory which states
the present condition of each item and
requests  disposition instructions.

C48 PR 45082. Sept SO. 1983. M amended at
49 PR 38945. Oct. 2.1984. as amended at 83
PR 8078. MAT. 11.1988]

8*0.510 What type of  financial manage-
    ment sjrtem most I i«^fit»iiif
  You must «"**•**-*<•* a financial man-
agement system that consistently ap-
plies  accepted  accounting principles
and practices and at least includes:
  (a)  An accurate,  current, and com-
plete accounting of all financial trans-
actions for  your project;
  (b)  Records, together with support-
ing documents showing the source and
application of all project funds. Includ-
ing assistance awards and authoriza-
tions,  obligations,  unobligated bal-
ances, assets, liabilities, outlays, and
Income;
  (c) Control over,  and  accountability
for, all project funds, property, and
other  assets, and an assurance that
you used these solely for their author-
ized purpose;
  (d)  A  comparison  of actual costs
versus budgeted object class amounts;
  (e) Procedures to  ensure prompt dis-
bursement  of Federal funds after you
receive them;
                                    335

-------
    Audita at least every other year
on an organization-wide basis or as re-
quired by OMB Circular A-128. If ap-
plicable (see 130.540): and
  (h)  A systematic method to resolve
audit findings and recommendations.

C48 FR 45062. Sept. 30. 1983, as amended at
51 FR 6353. Feb. 21. 1»8«1

130.515  What  restrictions or. signs/sur-
   vey!,  and questionnaire*  muit I ob-
   serve?
  (a)  Signs. You must  place  a visible
project  identification  sign at  a con-
struction site.  The sign  must give
project  information and  credit  EPA
for  funding. Your  project officer will
give you specifications for sign design.
content, and  placement.  The cost  of
making and erecting the sign is an al-
lowable cost.
  (b)  Surveys anil questionnaires.  If
your  survey  or  questionnaire  states
that information is being collected for
the Federal Government, you must re-
quest written approval from  EPA to
use Agency funds to cover the costs of
data collection.  To assure compliance
with the Paperwork Reduction Act of
1980. Pub.  L. 99-511 (44 U.S.C. 3501 et
seq.). the project officer can grant ap-
proval only with the agreement of the
EPA  Headquarters reports  manage-
ment officer. You must also  receive
the project officer's approval to list
EPA as a recipient of the survey infor-
mation.

§ 30.518  .What are the procedure* for pub-
    lishing  scientific, informational, and
    educational document!?
  (a)  EPA encourages publication of
the  results  of  its assistance  agree-
ments.
  (b)  You must comply  with  EPA's
peer and administrative review process
if you intend to release to the public
informational materials,  reports, and
other products  produced under  an
ZTA  assistance agreement.
  (1) Except for  articles  published
under paragraph (d)  of this section,
you must  submit three copies of the
documents to your project officer for
EPA review.  EPA will evaluate the
         40 CM Ch. I (7-1.91 MNttMt)

documents and will provide you with
written, suggested changes, if any.
  (2) You should make every effort to  -
accommodate suggestions arising from
the EPA review process while prepar-
ing a revised draft.. You should alert
EPA  reviewers  to suggestions  you
cannot  accommodate  and to changes
Initiated by you in the revised draft.
  (3) If an agreement is reached that
the material is appropriate for release
as an EPA publication, the following
statement must be included in the doc-
ument:

The tnf en&atlon in this document hu been
funded wholly or  in  part by the United
States Environmental Protection  Agency
under assistance agreement (number) to (re-
cipient). It has been subjected to thf Agen-
cy's peer and administrative revle* k.... ..*s
been approved for publication as an EPA
document. Mention of trade names or com-  ;
mercial  products does not constitute en-  i
dorsement or recommendation for use.      ?,

  (c) If agreement cannot be  reached
that the material is appropriate for re-
lease as an EPA publication, you may	
independently  publish and distributMJ|
the document for your own use and al*W
your  own expense provided  you in-
clude the following statement in  the
document:

Although the Information in this document
has been funded wholly  or in part by the
United  States Environmental Protection
Agency   under   inntli+arnT   agreement
(number) to (recipient), it may not necessar-
ily reflect the views of the Agency and no
official endorsement should be inferred.

  (d) EPA  also encourages independ-
ent publication of reports  in referred
journals at any time. You must submit
a copy of the article to your project of-
ficer when you send it for publication.
Following publication, three copies of
the article should be submitted to the
project officer. The  article  must in-
clude the following statement:

Although the research described In this ar-
ticle ha* b«en funded wholly or in part b?
the United States Environmental Protection
Agency    unaer   SMti>sn«f   agreement
(number) to (recipient). It has not been su|
jected to the Agency's peer and
tive review and therefore may not:
ly reflect the views of the Agency and no of-
ficial endorsement should be inferred.
                                     336

-------
   (e) Documents that are not to be re-
 leased to the public as EPA publica-
 tions but are part of a recipient's regu-
 lar pollution control activities are not
 subject to the EPA peer and adminis-
 trative review process, e.g.. State pollu-
 tion control agency-published newslet-
 ters and operation and maintenance
 ^•yyi.lff under the wasterwater treat-
 ment  construction grants  program.
 However. EPA encourages you to es-
 tablish a similar  reveiw process before
 publishing any documents at your own
 expense. You may publish such docu-
 ments only if you include the follow-
 ing statement!'

 This project has been funded wholly or in
 part by the  United States Environmental
 Protection Agency  ur4er issittsniy agree-
 ment (number) to *n  Self  Determination Act  (28
TJL8.C. 450f. 450g. and 4Mb).
IttJW  May I
   oslaf EPA
                     personal property
                     loads?
  (a) Nonprofit institution* of higher
education conducting basic or applied
research and nonprofit organization*
whose primary purpose is the conduct
of scienti/lc research.  You may pur-
chase personal property for the con-
duet of basic or applied  research if au-
thorized to do so in your asstotanf*
agreement. Before you purchase prop-
erty or equipment with a unit acquisi-
tion cost of $10.000 or more, you must
receive  the award official's approval.
Title will be vested in you but may be
limited as provided in paragraph (aXl)
of this section.
  (1) If EPA determines that It is in
the best Interest of the Agency. EPA
may reserve the right to transfer the
title for personal property having a
unit acquisition cost of $1.000 or more
to the  Federal Government or a third
party,  within 120 days after project
completion. EPA must identify such
property in the irnlnttncy agreement.
or otherwise notify you  in writing that
EPA reserves the right to transfer the
title.
                                    337

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530J31

  (2) II EPA does not reserve the right
to transfer the title, you have no other
obligations or accountability to EPA.
  (b)  Other recipient*. You may  pur-
cnase personaf property with EPA as-
sistance funds if authorized to do so in
your assistance agreement. Before you
purchase  personal property  with  a
unit cost of $10,000 or more, you must
receive  the award official's approval.
Title will  be  vested in you. subject to
the following conditions:
  (1) You  must use the property in the
EPA assisted project for which it was
acquired as long as needed* whether or
not the project continues to be  sup-
ported with EPA funds:
  (2) You must  assure that EPA's In-
terest (the percentage of  EPA's  par-
ticipation in  the UK_*. award) is  ade-
quately reflected and protected  in
compliance with all recordatlon or reg-
istration requirements of the Uniform
Commercial Code or other applicable
local laws on all nonexpendable  per-
sonal property with a unit acquisition
cost of $10,000 or more;
  (3) You must  follow the  property
management  standards in 130.531;
  (4) You must  follow the disposition
requirements in § 30.532; and
  (5) EPA reserves the right to trans-
fer the title for nonexpendable person-
al property having a unit acquisition
cost of $1,000 or more to the Federal
Government  or  a third party, within
120  days  after  project  completion.
EPA must identify such  property  in
the assistance agreement.
[48 FR 45062.  Sept. 30. 1M3; 49 PR 3894S.
Oct. 2. 19841

§30.531  What   property    management
    standard* mint I follow for nonexpcn-
    dttblc penon«J.property purchased with
    an EPA award?
  Nonprofit institutions of higher edu-
cation conducting basic or applied re-
search  and  nonprofit organizations
whose primary purpose is to conduct
scientific  research  are exempt from
the following standards.  All other re-
cipients must comply with the follow-
ing property  management standards.
Recipients may use their own property
management  system  if  the system
meets  the following tptn1"""* stand-
ards.
         40 CFt Ch. I (7-1-91 MHUn)

  (a)  Maintain  accurate  records  re-
flecting:
  (DA description of the property;
  (2)  Manufacturer's serial  number,
model number, or other identification
number,
  (3) Source of the property, including
assistance Identification number.
  (4) Whether title is vested in the re-
cipient or the Federal Government;.
  (5) Unit acquisition date and cost;
  (6)  The percentage of  the  Federal
share of the cost:
  (7)  Location, use, and condition of
property and the date the information
was recorded; and
  (8) Ultimate disposition data, includ-
ing sales price or the method used to
determine  the price, or the  method
used to determine current fair m  >et
value where  a recipient compensates
EPA  for its  share under  {30.532 of
this part.
  (b) Conduct a physical inventory of
property, and reconcile  the results .
with  the property records,  at least:..,
once every two years. Your inventory
must  verify the current use and. con-
tinued need for the property.  .  ,•-;•
  (c) MittitAin * control system to pre-
vent loss, damage, or theft. (You must
thoroughly investigate and document
any  loss, damage, or theft of nonex-
pendable personal property.)
  (d) Maintain adequate T^trtnt-*****^*
procedures that ensure the property is
in good condition and that instru-
ments  used  for precision measure-
ments are periodically calibrated.
  (e) M^"**'*) proper sales procedures
which  provide  for competition result-
Ing in the highest possible return. ;
  (f ) Maintain identification of Feder-
ally-owned property.
148 FR 45062. Sept. 30. 1983; 49 FR 38945.
Oct. 2. 19841

830.532  How  do  t 4i*po*e  of  personal
   property?
  Nonprofit institutions of higher edu-
cation  conducting basic or applied re-
search  and  nonprofit  organizations
whose  primary purpose is the  conduct
of scientific research are exempt from
the  following requirements. All other
recipients must comply  with  the fol-
lowing requirements. When  personal
property is no longer needed for the
                                   338

-------
 original  project, you may uae it on
 other EPA projects. If you do not have
 other EPA projects, you may use It on
 other Federal projects. If you wish to
 use the property on other than Feder-
 ally  sponsored  activities,  you must
 comply  with  the .following require-
 ments;
  (a)  Generally,  if you purchased non-
 expendable personal property  for less
 than  $1,000 per unit, you may either
 keep  it or sell  it and keep the  pro-
 ceeds. However, if  you are a profit-
 making organization, you  may  keep
 nonexpendable personal property only
 if you reimburse EPA for its  propor-
 tionate  share  of  the current  fair
 market value of the property.
  (b)  EPA is entitled to compensation
 on nonexpendable ±,,zonal propert:
 you purchased for more than $1,000.
 Ycu may keep it. provided you com*
 pensate  EPA  for  its  proportionate
share of the current fair market value.
 If you do not want to keep the proper-
ty, your  project officer will give  you
 instructions for disposition.
  (c) If. at the end of your project, you
have  expendable  personal  property
with  a  total  aggregate  fair  market
value exceeding $1,000. you may use
the property on  other Federally spon-
sored projects. If you do not use the
property on other Federally sponsored
projects you must keep It or sell it. but
 in either case you must  compensate
EPA for its proportionate share of the
current fair market value.

 (48 PR 45062. Sept 30.1983. M amended at
49 FR 38945. Oct. 2.1984]

 §30.535  May  I  purchase  real  property
   with EPA awarded fends?
  You may purchase  real property
 subject to the following conditions:
  (a) .The award official* must approve
 the purchase.
  (b)  Except as provided in paragraph
 . You must
inform the project officer of the avail-
ability of the property when the prop-
erty is no longer needed for the assist-
ance project or when you have  com-
pleted the project. EPA will give you
instructions  on where to  return the
property.

§ 30.537  Are   contractor!   required  to
   comply with EPA property policies?
  Generally, contractors are  not re-
quired to comply with EPA property
policies. However, if your  contractors
acquired personal property with EPA
funds,  and  the subagreement states
that ownership vests in you or EPA.
the contractor must comply with EPA
property policies.
                                   339

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 §30.531

 930.538 May I uee General Services Ad-
    ministration (GSA) supplier and senr-
    ice*?
 » You may not use GSA sources of
 supplies and  services, «.r excess Gov-
 ernment property. Excess Government
 property  consists of  property  under
 the control of any Federal agency that
 is not required for its needs.

 9 30.540 Who will audit my project?
  (a) General  EPA  may perform pre-
 award or interim audits, as  well as a
 final audit of your project. If EPA
 audits your project, EPA will  rely to
 the extent practicable on your audits
 conducted under S 30.510(g) (if done in
 accordance  with   applicable  audit
 standards) instead  of reaudlting the
 same records.
  (b) Other recipients.  The award offi-
 cial may request a final audit after the
 submission of. or the due date of. the
 final  Financial  Status   Report (see
 $30.505 through (h)
 of this section.
  (b) If you receive $100.000 or more in
 a  year in Federal  awards  you must
 have an audit made for  that year in
 accordance with the provisions  of
 OMB Circular A-133.  However, if you
         40 Cft Ch, I (7-1-fl Edition)

receive  $100.000 or more but receive
awards  under only one program, you
have the option of having an audit of
your  institution prepared in accord-
ance with the provisions of OMB Cir-
cular A-133 or having an audit made
of the one program. For prior or sub-
sequent years, when an institution has
only loan  guarantees or outstanding
loans that were made previously, the
institution may be required to conduct
audits for  those programs, in accord-
ance with  regulations of the Federal
agencies providing those guarantees or
loans.
  re) If you receive at least $25,000 but
less than $100.000 a year in Federal
awards  you must have an audit made
for that year in accordance with OMB
Circular A-133 or  have an audit made
of each Federal award.' in accordance
with Federal laws and regulations gov-
erning the programs-in which you par-
ticipate.
  (d) If you receive less than $25.000 in
a  year  in  Federal awards  you  are
exempt from Federal .audit require-
ments, but your records-must be avail--
able for review by appropriate EPA or,
subgranting entity officials.      -'   •
  (e)  Audits  shall  usually  be  per-
formed annually but not less frequent*
ly than every two yean.
  (f) In arranging for audit services.
you  must  follow the  procurement
standards prescribed by OMB Circular
A-110.
  (g) If you receive EPA assistance and
provide $25,000 or more  of it during
your fiscal year to a sub-recipient, you
must ensure that the requirements of
OMB Circulars A-133 or A-128  are
met. as appropriate.
  (h)  Tou  must comply  with the re-
quirements of OMB Circular A-133
concerning-  the use  of   small  audit
firms and audit firms owned and oper-
ated by socially and economically  dis-
advantaged individuals.

[56 FR 7305, Feb. 22.1991]

930.600  What Federal  laws and policies
   affect my award?
  You must comply with all applicable
Federal laws.
  (a) National Environmental Policy
AcL Tou must comply with the  Na-
tional  Environmental Policy Act of
                                   340

-------
 1999 (42 UAC. 4321 et *eg.) as
 ed and  other related  environ
ital
 laws and executive orders that require
 you  to  assess   the  environmental
 impact of your project. See 40 CPR
 part 6 for specific requirements,
  (b) Flood Disaster Protection Act If
 your project Involves construction or
 property acquisition in  a special flood
 hazard area, you must comply with
 the  Flood Disaster Protection Act of
 1973 (Pub. L.  93-234.  December 13.
 1973). If your project is located in a
 community participating in the  Na-
 tional Flood Insurance Program  (42
 U.S.C. 4001-4128). the  Act requires
 you  to purchase flood Insurance as a
 condition of receiving EPA assistance.
 If the community is not partldpatlnr
 in the National Flood Insurance Pro*
 gram and the special flood hazard area
 has been designated by the Federal In-
 surance Administration  of the Federal
Emergency Management Agency  for
at least one year. EPA will not award
assistance for your project until the
community  enters the program and
flood insurance is purchased. See  44
CPR parts 59 through 79 for specific
requirements.
  (c> Clean Air Act. Section 306 of the
Clean  Air Act. (42  UJS.C.  7906).  as
amended, and Executive Order 11738
prohibit EPA  from awarding assist-
ance to you (with certain exceptions)
if you intend to use any facility  on
EPA's  List  of  Violating Facilities  to
complete  work  on  your agreement.
You must include a clause in all suba-
greements that requires the recipients
of  those subagreements to  comply
with the requirements of 40 CPR part
15 (see 40 CFR 33.1020).
  (d) Federal Water Pollution Control
Act. Section 508 of the Federal Water
Pollution  Control  Act.  (33  U.S.C.
1368),  as  amended, and  Executive
Order 11738 prohibit EPA from award-
ing assistance to you (with certain ex-
ceptions) if you intend to use any  fa-
cility on EPA's List of Violating Facili-
ties to complete work on your agree-
ment. You must include a clause in all
subagreements to comply .with the  re-
quirements of 40 CFR part  15 (see 40
CPR 33.1020). Section 13 of the 1972
Amendments to the  Act prohibits sex
discrimination under any program or
activity receiving assistance  under the
Act See 40 CFR part 7 for specific re-
quirements.
  («)  Civil Right*  Act  You must
comply with ration 602.  Title VI of
the Civil Rights Act of 1964. (42 U.8.C.
20004), and related nondiscrimination
laws  and   Executive  Order  11246.
These authorities prohibit you from
excluding any person from participat-
ing in. denying them the  benefits of,
or discriminating against them on the
basis of race, color, or national origin
under any program or activity involv-
ing Federal tinm*)**** assistance. See 40
CFR parts 7 and 8 for specific require-
ments.
  (f)  Rehabilitation Act   You must
comply with section 504 of the Reha-
bilitation Act of 1973, (29  U-SiC. 794),
as amended, which prohibits
     nation  on the  basis of handicap in
     Federally assisted  programs. See  40
     CFR part 7 for specific requirements.
       (g) Age Discrimination  Act  You
     must comply with the provisions of
     the  Age Discrimination Act of 1975.
     (42 T7JS.C. 6101 et seq.), which prohibit
     discrimination on the basis of age in
     Federally assisted  programs; See  40
     CFR part 7 for specific requirements.
       (h) Title IX of the Education Amend-
     ment» o/ 1972. You must comply with
     Title DE of the  Education  Amend-
     ments of 1972, (20 U.S.C. 1681 et teq.y
     which prohibits sex discrimination in
     Federally assisted education programs.
     See 40 CFR part 7. for specific require-
     ments.
       (i)  Uniform  Relocation  Assistance
     and Real Property Acquisition Policies
     Act You must comply with the Uni-
     form Relocation Assistance and Real
     Property Acquisition Policies Act of
     1970, (42 U.S.C. 4601 et teg.), if your
     project involves acquiring  an Interest
     in real  property and/or any displace-
     ment of persons, businesses, or farm
     operations. See 40 CFR part 4 for spe-
     cific requirements.
       (J) The Indian Self-Determination
     and Education Assistance Act You
     must comply with the Indian Self-De-
     termination and Education Assistance
     Act of  1975 (Pub. L. 93-638). If your
     project will  benefit Indians, the Act
     requires you  to give Indians prefer-
     ence in training and employment op-
     portunities and in the award of suba-
     greements.
                                   341

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§30.401

  (k) The Hatch Act It you are a SUte
or  local  government  recipient, you
must  ensure  complJance  with the
Hatch Act, (5 U.S.C.  1501 et *tq.\  as
amended. The Act  requires State and
local government employees to comply
with the restrictions on political activi-
ties Imposed by the Act II their princi-
pal employment activities are funded
wholly  or In pan  by Federal assist-
ance. See 5 CFR part  151 for specific
prohibitions and exemptions.
  (1) Safe Drinking  Water Act Section
1424(e) of the Safe Drinking Water
Act (42 U,S C.  300h-3(e», prohibits
EPA from awarding assistance to you
if EPA determines  that  your project
may contaminate &  sole source aquifer
which   will  result  in  a  significant
hazard to public health. See CFR part
149.
C48  PR 45062, Sept. 30. I»  The Contract Work Hours  and
Safety Standards  AcL The  Contract
Work Hours and Safety .Standards Act
(40 U.S.C. 327 et sea.) and the regula-
tions  of the  Department  of Labor
under 29 CFR part 5 require your con-
tractors  and  subcontractors  to   pay
wages to laborers and mechanics on
the basis of an eight hour work  day f
and 40 hour work week and to pay at •
least  time-and-a-half for  work  per-
formed in excess of these time limita-
tions. Also, the Act prohibits your con-
tractors  and subcontractors  from re-
quiring  laborers   and  mechanics to
work in hazardous, unsanitary, or dan-
gerous conditions (see 29 CFR part
1926).
  (d)  Convict tabor. You may not  use
convict labor  unless the convicts, are
on work release,  parole,  or probation
(see 18 U.S.C. 436).

§ 30.610  What are  my responsibUitte for
   preventing  and  detecting  fraud  and
   other corrupt practices?
  (a)  You bear the primary responsi-
bility for preventing,  detecting,  and
prosecuting corrupt practices under
your assistance agreement.
  (b)  If you become aware  of allega-
tions, evidence, or the appearance of
corrupt practices, you must:
  (1)  Immediately Inform  the  EPA
project officer and the EPA Office of
Tnspe
-------
 ItMIl
    •olidt EPA •Mtitanre for me? *
  Yet,  but you may not  reimburse
 with EPA assistance funds any person.
 corporation, partnership,  agency, or
 other  entity which solidta  or secures
 EPA assistance for you in exchange
 for a commlssioa a percentage fee, a
 brokerage fee. or a contingent fee.

 § 30.612 May an EPA employee act M my
    representative?
  (a) An EPA employee may not repre-
 sent you as an agent or attorney in
 any proceeding before EPA or  any
 other  Federal agency in  which  the
 United States is a party or has a direct
 or substantial interest unless:
  (1) You are  a State or local govern-
 ment agency;
  <2) The EPA employee is on detail to
 the agency under the Intergovernmen-
 tal Personnel Act (5 UAC. 3371-3376);
and
  (3) The representation takes place In
the context of carrying out programs
for which EPA and your agency have
a Joint responsibility under the envi-
ronmental statutes.
  (b) Except as  provided for  In para-
graph (a) of this section, an EPA em-
ployee must not act as an agent or at-
torney for a recipient or for a contrac-
tor  or  subcontractor of a recipient In
any claim against the United States.

830.613  What ii EPA'i policy OB conflict
   of Interest?
  EPA's policy is to prevent personal
or organizational conflict of  interest.
or the appearance of such conflict of
interest in  the award and administra-
tion of EPA aflftlfftanfr. Including suba-
greements. (For restrictions  on  EPA
employees, see 40 CFR part 3.)
  (a) An official or employee of a re-
cipient may not participate in any ac-
 tivity relating to EPA assistance if any
of the following persons or organiza-
 tions,  to the  official's or employee's
 knowledge, has a financial Interest in
 the activity:
  (1) The official or employee himself;
  (2) The official or employee's spouse
 or minor child;
  (3) A partner of the official or em-
 ployee;
  (4)  An organization (other  than  a
 public agency) in which the official or
                            §3*700

employee serves as an officer, director.
trustee, partner, or employee: or
  (9) Any person  or organization with
whom the official or employee is nego-
tiating or has  any amngement con-
cerning prospective employment.
  (b) Officials and employees of recipi-
ents  must  avoid any  action which
might result In. or create the appear-
ance of:
  (1) Using official position for private
gain;
  (2) Giving preferential treatment to
any person;
  (3)  Losing independence  or impar-
tiality;
  (4) Making an  official decision out-
side official channels; or
  (5)  Undermining public confidence
in the integrity of EPA programs.

0 30.615  May I employ a former EPA  em-
    ployee and still  receive assistance?

  You may hire a former EPA employ-
ee and still receive assistance provided
the former employee complies with
the restrictions on post-employment
activities established by 18 U.S.C. 207.
These restrictions  are  explained  in
regulations  issued  by the  Office  of
Personnel Management under 5 CFR
part 737 and EPA regulations under 40
CFR part 3.

    Subport O  Can an Assistance
                 be)
030.700  What change* *• »7 assistance
   agreement require a  formal amend-
   ment?
  You must receive from the award of-
ficial a  formal amendment before im-
plementing:
  (a) A transfer of  an award to an-
other recipient;
  (b) Changes in the objectives of the
project:
  (c) Changes   in   the  assistance
amount:
  (d) Substantial changes within the
scope of the project; or
  (e) A rebudgeting of the following:
  (1) Amounts  budgeted  for  either
construction or  non-construction ac-
tivities if transferred from one activity
to the other.  .
                                   343

-------
           40 Ot Ch. I (?*1-91 MM**)
  (2) Amounts budgeted for  indirect
costs to  absorb increases in direct
costs; or
» (3) Amounts budgeted for  training
allowances if transferred to other cost
categories,

§ 30.705  What changes can I make to my
    assistance agreement without a formal
    amendment?
  Minor changes in the project work
that are consistent with the objective
of the project and within the scope of
the  assistance  agreement do not re-
quire  the  execution  of a  formal
amendment before the recipient's Im-
plementation of the change. However.
such changes do not obligate EPA to
provide Federal funds for any costs in-
curred by you  in exc  • of the assist-
ance amount, unless approved in ad-
vance under 130.700.

930.710  Can I terminate a part  or all of
    my assistance agreement?
  (a) You and  EPA may terminate a
part or all of  your assistance agree-
ment, when both parties agree  that
the  continuation of the project will
not  produce beneficial results.  You
and the award official must  agree bn
the conditions  of the termination, the
effective date,  and in the case of par-
tial termination, the portion to be ter-
minated. EPA may unilaterally termi-
nate for cause your amMarice agree-
ment under 130.903 of this part.
  (b) EPA will pay you the  Federal
share of allowable costs incurred up to
the date of termination and allowable
costs related  to commitments   you
made prior to termination that  you
cannot canceL
•r       .           •

  Subport H—How do I Close ovt my
               Project?

9 30.800  What records and reports must I
    keep after 1 complete my project?
  You and your contractors must keep
all  books;  records, documents,  and
other evidence (including accounting
procedures  and  practices and suba-
greement documents)  that track the
progress of your project in accordance
with the requirements under i 30.501.
   IM JOi  Uaosr what condition* will I owe
      money to EPA?
    (a) If the award official determines
   that you owe  funds, you must reim-
   burse the  Federal government that
   amount. EPA  will take appropriate
   legal and administrative action to col-
  , lect the amount you owe the Agency if
   reimbursement is not made in a timely
   manner. EPA  may  offset  the debt
   against  other  funds payable to  you
   under an EPA  or other Federal agency
   Resistance  agreement if not explicitly
   prohibited by another statute.
    (b) EPA  will charge you interest if
   you fail to pay  within 30 days from
   the date of the Agency's decision that
   a debt is owed. The interest rate will
   be the rate established by the  Secre-
   tary of the Treasury in accordance
   with  the   Treasury  Fiscal Require-
   menta Manual 6-6020.20. The rates are
   published   quarterly in  the. FEDERAL
   REGISTER.
    (c> If you are not a State or local"
   government, EPA will charge you its
   cost to process and handle the overdue
   debt at the end of each 30 day  period
   the debt is overdue, and a penalty of
   6% per annum if the debt is not  paid
   within 120 days after the date  of the
   Agency's decision that a debt is owed.

   [48 FR 45062, Sept. 30.1983. at amended at
   51  PR 6353. Feb. 21.1984]

    Subport I—What Measures may EPA
         Toko for Non-compliance?

   930.900  What measures may EPA take for
       non-compliance?
    If you do not comply with all  of the
   terms  and conditions of your  assist*
   ance  agreement,  the  award official
   may apply any of the following:
     (a) Issue a stop-work order;
     (b) Withold payment;
     (c) Suspend or terminate your assist-
   ance agreement for cause;
     (d)  Annul   your assistance  agree-
   ment;
     (e)  Request  that  the  Director,
   Grants Administration Division, debar
   or suspend you as an eligible recipient;
     (f) Take  other appropriate artmlnis-
   trative action;  or
     (g) Institute  judicial proceedings.
344

-------
 invlroimionfol Protection Agency

 (4B PR 4M63. Sept. 30,1M3, M amended at
 49 PR 38948. Oct. 3. 19S4]

 130.901  What  are the consequence* of a
    •top-work order?
  (a) A stop-work order requires you to
 Immediately stop the work or activi-
 ties described  In the order and to take
 all reasonable steps to minimize  costs
 incurred on the work. The award offi-
 cial will issue the order In writing. The
 order will be  in effect  for forty-five
 days after you receive it unless can-
 celled  or  extended by mutual agree*
 ment between you and EPA. If the
 proWem cannot be resolved during the
 stop-work period and EPA Is likely to
 terminate or annul the agreement, the
 award official  will so Inform you.
  (b) If the stop-work order  is  can-
 celled and it  caused  any Increase  In
 the cost of and/or the time for com-
 pleting the project, you may request
 an  adjustment in the project  period,
 budget period, or assistance amount.
 You must submit a request for adjust-
ment to  the  project officer  within
sixty days after the  stop-work order
 ended.

930.902  What  are  the  consequences  of
    withholding payments?
  (a) The  award official may withhold
payments when  you  fall  to  comply
 with  the  tasks,  reporting  require-
ments, or conditions of your assistance
 agreement. The award official will pro-
 vide you reasonable notice in writing
before withholding payment.
  (b) The  award official may withhold
only the amount necessary to assure
compliance with your assistance agree-
ment.
  (c) The  award offtclal may withhold
 payment to the extent you are indebt-
ed to the United States, unless the col-
 lection of the  Indebtedness will Impair
 the accomplishment of the project and
the continuation of the project is  In
the best Interest of the United States.

 9 30.903  What are the consequence* of ter-
    mination for cause?
  (a) The  award official may unilater-
 ally terminate  your agreement  in
 whole or  in part  at any time before
 the date of completion,  whenever  he
 determines  that  you  have failed  to
 comply with  the  conditions of your
                            §30.904

agreement. The award official will pro-
vide you an opportunity for consulta-
tion before issuing a notice of termina-
tion.
  (b) If EPA terminates your agree-
ment, the award official will notify
you in writing of  his determination,
the reasons for the termination, and
the effective date. Upon receiving the
termination  notice,  you must  stop
work immediately. EPA will not reim-
burse you for any new commitments
you make after you receive the termi-
nation notice.
  re) 15PA will pay you the  Federal
share of allowable costs Incurred up to
the date of termination and allowable
costs related to commitments  you
made prior to termination that you
cannot cancel.

9 30.904  What are the consequence* of an*
    nulment?
  (a) The  award official may unilater-
ally annul in whole or In part your as-
sistance agreement In any of  the fol-
lowing casea:
  (1) You have made no substantial
progress on the project without good
cause;
  (2) You  obtained  an  assistance
agreement by fraud or misrepresenta-
tion;
  (3) You are found  to  practice cor-
rupt administrative procedures;
  (4)  You have Inordinately  delayed
project   completion  without  good
cause; or
  (5)  You have  failed  to meet the
project  purpose to the extent that the
fundamental purpose stated in the as-
sistance agreement is frustrated.
  (b) If EPA intends to issue an annul-
ment, the award official will Inform
you of the annulment in writing. The
award official will provide you an op-
portunity  for consultation before issu-
ing a notice of annulment. If your as-
sistance agreement is annulled, you
must return all funds received for the
project  including those already ex-
pended. EPA may pursue other avail-
able remedies under Federal, State.
and local laws.
                                   345

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 §30.905

 0 30.906  May I request • review of • termi-
    nation or annulment?
   You may request a review of EPA's
 excision to terminate or annul an as-
 sistance  agreement.  Within  thirty
 days after the notice of termination or
 annulment is Issued, you must  file a
 written  request for review to the ap-
 propriate  Assistant  or Regional Ad-
 ministrator. Your request for review
 must follow the procedures under sub-
 part  L of this part.
 (49 PR 38945. Oct. 2. i9843

 §30.906  What are  the  consequences  of
    suspension or debarment?
  EPA may suspend or debar you  in
 accordance with 40 CFR part 32. You
 may  not receive assistance or a suba-
 greement if your nume or organization
 appears  on EPA's Master List of De-
 barred and Suspended Firms and Indi-
 viduals.
 [48 PR 45062. Sept. 30. 1983; 49 PR 3B945.
 Oct. 2. 1984]

 Subpart J  Con  I got An  Exception
     ("Deviation") From  Thoto Regu-
     lations?

 §30.1001  Will EPA approve any excep-
    tions to these regulations?
  (a) On a case-by-case basis, EPA will
 consider  requests for exceptions  to
 these regulations.
  (b) EPA may  issue a  "deviation"
 from any of its assistance related regu-
 lations, except for  those  that imple-
 ment statutory and executive order re-
 quirements.
.  
-------
  Swbparf K—What Fondas Apply to
    Patantt, Data, and Copyrights?

830.1100  What assistance agreements arc
    subject to EPA patent rules? •
  Except  for wastewater  treatment
construction grants  awarded  under
Title II  of  the  Clean Water Act.  as
amended, all EPA  assistance  agree-
ments involving experimentation, de-
velopment, special Investigations, sur-
veys, studies, or research are subject
to the EPA patent .rules.

§30.1101  What Federal patent  laws  or
    policies govern my assistance  agree*
    ment?
  The nature of your organization will
determine  which  laws  and  policies
govern your assistance agreement:
  (a) Small business firms  and  non-
profit organizations, including educa-
tional institutions, are entitled to the
benefits of.  and  must comply with  35
U.S.C. Chapter  IS  (1982),  and the
patent rights clause in OMB Circular
A-124. Attachment A (49 FR 10393).
  (b) A profitmaking firm that is not
defined as a small business firm, and
whose assistance agreement is funded
under section 6914  of the Resource
Conservation   and   Recovery   Act
(RCRA),  must comply  with section
698KO of RCRA. See Federal Acquisi-
tion Regulation 48 CFR part 27 and 48
CFR 52.227-13 (49 FR 12972).
  (c) If you are neither  a small busi-
ness firm nor a profltmaklng firm with
an award under section 6914 of RCRA,
you are  subject to  the  guidelines  in
the President's Memorandum on Gov-
ernment Patent Policy issued on Feb-
ruary 18.1983 (Weekly Compilation of
Presidential Documents,  vol. 19.  no. 7.
page 252). and, therefore, must comply
with 35 U.S.C. Chapter 118 (1982) and
the  patent  rights  clause  cited  in
§30.1101(a).
(48 FR 4S062, Sept. 30. 1983; 49 FR 38946.
Oct. 2.19841

830.1102  What are my invention  rights
    and my reporting requirements if  my
    award is other than an award under
    section 6914 of RCRA?
  You must report all  Inventions to
the Award Official and decide whether
you wish to retain domestic and/or
                          930.1106

foreign rights to your Invention. You
must report your invention and notify
the  Award  Official of your  decision
within the  time periods specified in
the  patent  rights  clause  cited  in
i30.1101(a). If you do not retain the
rights to your Invention. EPA may ac-
quire the title from you. If you retain
title. EPA acquires a royalty-free. Ir-
revocable license to use the invention
throughout  the world by.  and  on
behalf of, the Federal Government,

(49 FR 38946. Oct. 2. 1984]

§30.1103 'What  are my invention  rights
   and obligations if I am a profitmsJung
   firm with an award  under section 6914
   of RCRA?
  If  you  are not a small business and
your assistance agreement does not in-
dicate  otherwise,  you  must  comply
with the patent rights clause, entitled
"Patent  Rights Acquisition   by the
Government"   (48  CFR   52.227-13),
which  implements section 698KO of
RCRA. Under  this section, EPA nor-
mally obtains title to your invention.

(48 FR  48062. Sept. 30. 1983;  49 FR  38946.
Oct. 2. 1984]

8 30.1104  Can I  get a waiver from section
   6981(c) of RCRA?
  On a case by case basis, you may ask
EPA for a deviation  from  section
698KO of RCRA. You must follow the
procedures in subpart J.

8 30.1108  Do the patent rules apply to su-
   bagreements?
  (a) Yes, if the subagreements Involve
experimentation., development, special
investigations,  surveys, studies, or re-
search. you must include the appropri-
ate patent rights clause in the  suba-
greement. All business firms and non-
profit organizations awarded subagree-
ments  are entitled to  the benefits and
must comply with 35 U.S.C. Chapter
18 (1982) and  the President's Memo-
randum on Government Patent Policy
of February 18. 1983. except that  a
party  to a  subagreement  awarded
under  section 6914 of RCRA which is
a profitmaking firm not defined as  a
       business firm, is  subject to
 if 30.110Kb) and 30.1103.
                                   347

-------
 9 90.1 10t

  (b) Subagreements must be In com-
 pliance with the "Patent and data and
 copyright clause" In 40 CFR part 33,
 and generally must contain the same
 patent  right* clause  ai  contained In
 your assistance agreement.
 [4* PR 45043. Sept. 30. 1983; 49 PR 38848,
 Oct. 3. 1984]

 § 30.1108  Does EPA require any type of 11.
    censing .of background  patent! that I
    own?
  Generally,  EPA does  not require
 such  licensing.  However,  in awards
 subject to 35  U.S.C. Chapter 18 (1982)
 the Administrator may approve such a
 requirement  under  exceptional  cir-
 cumstances.
 C48 FR 45083. Sept. 30. 1983: 49 FFc 38948.
 Oct. 2, 19841

 f 30.1112  Arc  there  any  other  patent
    clause* or condition* that apply to my
    award?
  Your  award Is subject to both the
 Notice and Assistance Clause and the
 Authorization and Consent Clause In
 Appendix B to this part.

 130.1130  What righto la date and copy.
    rlghte does  EPA acquirer
  All assistance agreements and suba-
 greements are subject to Appendix C.
 As set forth In Appendix C. the Feder-
 al  Government  has an  unrestricted
 right  to use any data  or Information
 generated  using assistance funds or
specified to be delivered to EPA in the
 assistance   agreement. The  Federal
 Government has a royalty-free, irrevo-
 cable license  to  use any copyrighted
 data in. any manner for Federal Gov-
 ernment purposes,

 Subporft I— Hew or* DfosMitM •*-
    tws*fi EPA Officials and NM R«-
8 30.1209  What happens If an EPA official
    and 1 disagree  about an assistance
    agreement requirement?
  (a)   Disagreements  should  be  re-
solved at the lowest level possible.
  (b)  If you can not reach  an agree-
ment, the EPA disputes decision offi-
cial will provide you with  a  written
final  decision. The EPA disputes deci-
sion official is the individual deslgnat-
         40 CM Oh. I (7-l-f I MtitMi)

ed by the award official to resolve
putes   concerning  your  asslttsm
agreement
  (c) The disputes declton official's de-
cision  will  constitute final  agency
action unless you file a request for
review by registered mall.- return re-
ceipt requested,  within  30 calendar
days of the date of the decision.

C48 PR 45082. Sept. 30. 1983; 49 FR 38948.
Oct. 2. 1984]

0 30.1205  If  I file  •  request for. review,
   with whom must I file?
  (a) For final decisions issued by an
EPA disputes decision official at Head-
quarters, you must file your.request
with the Assistant 'Administrator re-
sponsible for the assistance program.
   For final decisions issued  by a
Regional disputes decision official, you
must file your  request for review with
the Regional Administrator. If the Re-
gional Administrator Issued the  final
decision, you must request the Region-
al Administrator to reconsider that
cision.        -    •'
130.1210  What most I include in  017 i*.
   quest for review or reconsideration?
  Your request must include:
  (a) A copy of the EPA disputes deci-
sion of flcial's final decision;
  (b)  A statement of the amount in
dispute;
  (c)  A description  of the issues in-
volved; and   .             ;,
  (d)  A concise statement of your ob-
jections to the final decision.

fl 30.1215  What are my righto after 1 file *
   request for review or reconsideration?
  (a) You may be represented by coun-
sel and may submit documentary evi-
dence and briefs for inclusion in a
written record;
  (b)  You are entitled to an Informal
conference with EPA officials; and
  (c) You are entitled to a written de-
cision from the appropriate Regional
or Assistant Administrator.
                                    348

-------
 f M.1290  U the Assistant Administrator
    confirms  the final  decision  of the
    Headquarters dispute* decision official,
    may  I  seek farther  administrative
    review?
  A decision by the Assistant Adminis-
 trator to confirm the final decision of
 a Headquarters disputes decision offi-
 cial will  constitute the  final Agency
 action.            .

 830.1225  If the Regional Administrator
    confirms the final decision of the Re-
    gional disputes decision official, may I
    seek  further administrative review at
    EPA Headquarters?
  (a) A determination by the Regional
Administrator to conf'• ". the Regional
disputes decision official's decision will
constitute the final  Agency  action.
However, you  may file a petition for
discretionary review  by the Assistant
Administrator  responsible for the as-
sistance  program within 30 calendar
days of the Regional Administrator's
decision. Your petition must be sent to
the Assistant  Administrator by regis-
tered mail, return receipt requested.
and must Include:
  (DA copy of the Regional Adminis-
trator's decision; and
  (2) A concise statement of the rea-
sons why you believe the decision is er-
roneous.
  (b)  If the Assistant Administrator
decides not to review the Regional Ad-
ministrator's  decision, the Assistant
Administrator  will advise you in writ-
ing that the Regional Administrator's
decision  remains  the  final  Agency
action.
  (c)  Zf  the Assistant Administrator
decides to review the Regional Admin-
istrator's decision, the review will gen-
erally be limited to the written record
on which the Regional Administrator's
decision was based. The Assistant Ad-
ministrator may allow you to submit
briefs in  support of your petition for
review and may provide you an oppor-
tunity for an  informal conference  In
order to clarify factual or legal issues.
After reviewing the Regional Adminis-
trator's decision, the  Assistant Admin-
istrator will issue a written decision
which  will then  become  the final
Agency action.
                       Pi. 10, Aa*. A

130.1290  Will I  be charged interest if I
    owe money to EPA?
  (a)  Interest  will  accrue  on  any
amounts, of money due and payable to
EPA from the date of the disputes de-
cision  official's  final decision, even if
you request  review of  the  decision
under  this subpart. Only full payment
of the debt within 30 days of the dis-
putes  decision officials' final decision
will prevent EPA from charging inter-
est.  If you  pay a  debt but request
review under  this  subpart and the
amount  of the debt is reduced as a
result  of the review. EPA will refund
the interest and penalty charges that
you paid on the adjustment.- How-'er,
processing   and  handling  charges
which  you may have paid are refund-
able only if EPA determines that the
entire  amount of the debt Is not owed.
  (b) State and local  government  re-
cipients are not subject to the penalty
and handling charges In this section.
but are subject to the interest charges.

[48 FR  46062. Sept. 30. 1983. as amended at
51 FR 0353, Feb. 21.19863

§30.1235  Are there any  EPA  decisions
    which may not be reviewed under this
    subpart?
  You  may not request a review of;
  (a) Disapprovals of deviations under
subpart J:
  (b) Bid protest decisions under part
33;
  (c) National Environmental Policy
Act decisions under part 6;
  (d) Advanced  wastewater treatment
decisions of the Administrator, and
  (e) Policy decisions of the EPA Audit
Resolution Board.

(48 FR  45062. Sept. 30. 1983. as amended at
49 FR 38946. Oct. 2. 19843

       APPENDICES TO PART 30

     APPENDIX A TO PART 30—EPA
              PROGRAMS
  The following chart identifies EPA's ss-
slsUnce programs and the types of awards
(grants or  cooperative agreements)  that
EPA will award under these programs.

-------
Pt. 90, Ap*. •
 CT9
  No.
 66001
 66.003

 66.006
 56.416

 66.4 IB

 66420




 6642$

 66402

 68.433

 66.439

 66438
 66.451

 66.454
 66.900


 66.501
 66.502
 66904
 66.506


 66906

 66.90?
 66.600


 66.603


 66.700
 66602
                    •nt*
Af Pollution CoTHul
A* Pofenon Control Mmnpoow Tram-
  ing......	-	•	
Air Pofcitton Control  Tacftr»ca> Tn»v
  ing	;	
A* PoNuttOn CorWOl FallOwaf^pa..	
Construction Grant*  lor Waaawalar
  Traatmant Woma	
Waiar  Poftufton Conffoi Sma  and
  imaratata Program	.".	
wawr  PoBubon Control—SUM  and
  Local Manpoxar Program Oa»a

                                 (*>
                                 (')
                                 (M
                                 (»)

                                 IM

                                 <•)
                                 (M
  1 Coooaratiw* Agraamant
  * Gf«.it Agrwtmaot
  •Eitnar.
  4 Loan or Faftowahip.
            B TO PART 30—PATENTS AND
          ComuoKTS CUUTSES
     Notice and Attittanee Claiae

  («)  The recipient must  report  to  the
project officer, promptly and in reuon&ble
                                                40 CHI Ch. I (7-1^1
written detail, etch known notice or claim
of patent or copyright infiinfement on this
agreement.
  (b) In  the  event  of  any  claim or iuit
against the Government, on account of any
alleged patent or copyright infringement
arising out of the performance of this agree-
ment or out of the use of any supplies fur*
nlshed or work or services performed here-
under,  the recipient  must furnish to the
Government,  when requested by the project
officer, all evidence and information in pos-
session of the recipient pertaining to such
suit or claim. Such evidence and informa-
tion must be furnished at the  expense of
the Government except where the recipient
has agreed to  indemnify the Government.
  CO The recipient must Include in each sv •
bagreement (Including any lower tier suba-
greement) in excess of tlO.OOO a clause sub-
stantially  similar  to  the foregoing  provi-
sions.

  Authorization and Consent Clause

  EPA gives Its  authorisation and consent
for all use and manufacture of any  inven-
tion described In and covered by a patent
held by the United States In the perform-
ance of an assistance agreement and any su-
bagreement.

  APPENDIX  C TO PA&T 30— RIGHTS XH
          DATA AND COPYHIGHTS
  (a) The term ivbject data as used in this
clause Includes writing,  technical  reports.
sound recordings, magnetic recordings, com-
puter programs, computerized data bases,
data bases in hard copy,  pictorial reproduc-
tions, plans, drawings, including engineering
or manufacturing  drawings, specifications,
or  other  graphical  representations,  and
works of any similar nature (whether or not
copyrighted) which an applicant submits or
which EPA specifies to be delivered under
this assistance agreement or which  a recipi-
ent develops or produces and EPA pays for
under this assistance  agreement. The term
does not include financial reports, cost anal-
yses, and other information incidental to as-
sistance agreement administration.
  (b)  Except as may otherwise be provided
In this assistance agreement, when  publica-
tions, films, or similar materials are devel-
oped  directly or Indirectly from a  project
supported by  EPA. the author is free to ar-
range for copyright without approval. How-
ever auch materials shall be subject U. the
provisions of  40  CFR 30.518. The recipient
agrees to and does hereby grant to the Gov-
ernment, and to Its officers, agents, and em-
ployees acting within the scope of their offi-
cial duties, a royalty-free, nonexclusive, and
irrevocable license throughout the world for
                                          350

-------
iiwli»*i»«nt«l r*r«t»cti»ti Agency

Government purposes to publish, translate,
reproduce,  deliver, perform, dispose of and
to  authorise others so to  do, all  subject
data,  or copyrightable  material  based on
such data,  covered by copyright now or in
the future.
  (c) The recipient shaU not Include in the
subject data any copyrighted matter with-
out the written approval of the project offi-
cer,  unless he  provides  the  Government
with the written permission of the  copy-
right owner for the Government to use the
copyrighted matter in the manner provided
in paragraph (b) above.
  (d) Nothing contained in  this  Appendix
shaU imply a  license to  the  Government
under any patent or be  construed as affect-
Ing the scope of any license or other rights
otherwise granted to the Government under
any patent.
   Unless otherwise  limited below.-the
Government may,  without additional com-
pensation  to the recipient, duplicate, use.
and disclose in any manner and for any pur-
pose whatsoever, and have others so do. all
subject data.
  
     AmandmanT (So* 130.302)	
   (f) EPA Form 5770-7 "Faltowihip Aefcva-
     lion Note*" (Sa« f 30.302)	
   (B) EPA Form 5770-S ••Faftamrip A?w-
     inenf (S«a 130.302)	'••
   (h) EPA Form 5770-S  "EPA Ftftomhip
     Tarmnatton Nobea" (Sa* 130.302) .........
(9) SF-2«S "Financial Statua Baport" (Sm
  130.509)	
(10) SF-270 "flaquaat lor AoVanoa or Ra«i»-
  burwiMnf <$•• 130.400)		
(11) SF-271 "OuOBy Raport^ and F»aguaat «ar
  flaiintiuriamarii for Conatnctton Piograma"
  (Saa!30SOS)	
 (12) SF-272 "Fadcrat  Gath
  Raport" ($•• ! 30.400)		

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C49 PR 450«a, Sept. 30.  1981; 49 PR 38944.
Oct. 2.1984]
                                                  352

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            APPENDIX E
40 CFR PART 31, "UNIFORM ADMINSTRATIVE
    REQUIREMENTS FOR GRANTS AND
  COOPERATIVE AGREEMENTS TO STATE
      AND LOCAL GOVERNMENTS"
               AND
      PART 31 POLICY GUIDANCE

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        ,'

        ?
       V


!      ?'

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Environmental Protection A§«ncy
                               Part 31
                                         PART  31— UNIFORM   A&MIN1STRA-
                                           TtVE REQUIREMENTS FOR GRANTS
                                           AND  COOPERATIVE  AGREEMENTS
                                           TO STATE  AND  LOCAL  GOVERN-
                                           MENTS
                                         Sec.
                                         31.1
                                         31.2
                                         31.3
                                         31.4
                                         31.5
                                         31.6
           Subp«f4 A--G«n«ral


     Purpose and scope of this pan.
     Scope of subpart.
     Definitions.
     Applicability.
     Effect on other issuances.
     Additions and exceptions.
                                         31.10 Forms for applying for grunts.
                                         31.11 State plans.
                                         31.12 Special grant or subgrant conditions
                                            for "high-risk" grantees.
                                         31.13 Principal  .environmental  statutory
                                            provisions applicable to EPA assistance
                                            awards.

                                            Stfbp«rt C—Pott-Award IcqwiramMtt
                                                  *            .
                                                FtXAHCIAL ASH DflSTRATTON

                                         31.20 Standards for financial management
                                            systems.
                                         31.21 Payment.
                                         31.22 Allowable costs.
                                         31.23 Period of availability of funds.
                                         31.24 Matching or cost sharing.
                                         31.25 Program income.
                                         31.26 Non-Federal audit.

                                            CHANGES. PKoratrr. AMD Strax WARDS

                                         31.30 Changes.
                                         31.31 Real property.
                                         31.32 Equipment.
                                         31.33 Supplies.
                                         31.34 Copyrights.
                                         31.35 Subawards to debarred and suspend-
                                            ed parties.
                                         31.36 Procurement.
                                         31.37 Subgrants.

                                             REPORTS. RECORDS. RETENTION. AND
                                                     ENFOB
                                                                   requirements
31.40  Monitoring and  reporting program
   performance.
31.41  Financial reporting.
31.42  Retention and
   for records.
31.43  Enforcement.
31.44  Termination for convenience.
31.45  Quality assurance.
                                        31.50 Closeout.

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§31.1

31.51  Later disallowances and adjustments.
31.52  Collection of amounts due.
                 F— OUpvt««

31.70  Disputes
ArrzHDix A— PART 30 AUDIT RCQUIRKMEKTS
   FOR STATE AND LOCAL GOVERNMENT RE-
   CIPIENTS
  AUTHORITY:  33  U.S.C. 1251 et seq.;  42
U.S.C. 7401 et seq.: 42 U.S.C. 6901 et seq.: 42
D.S.C. 300f et seq.: 7 U.S.C. 136 et seq.: 15
U.S.C. 2601 et seq.: 42 U.S.C. 9601 et seq.: 20
U.S.C. 4011 et seq.: 33 O.S.C. 1401 et seq.
  SOCXCK 53 PR  8075 and 8087.  Mar.  11.
1988. unless otherwise noted.
  Ewtmva DAT* No**. At S3 PR 601 b ad
8087. Mar. 11. 1988. Pan 31 was added, ef-
fective October 1. 1988.

         Subpart A— G«n«ral

9 31.1  Purpose and scope of this part.
  This  part establishes  uniform  ad-
ministrative rules for  Federal  grants
and  cooperative  • agreements   and
subawards to State,  local and Indian
tribal governments.

9 31.2  Scope of subpart
  This subpart contains general rules
pertaining to this part  and procedures
for control  of  exceptions from this
part.

fl :.,3  Definitions.
  As used in this part:
  "Accrued  expenditures"  mean  the
charges   Incurred  by  the  grantee
during  a given period requiring  the
provision of funds for (1) Goods and
other tangible. property received; (2)
services performed by employees, con-
tractors.  subgrantees.  subcontractors.
and  other  payees;  and  (3)   other
amounts  becoming  owed under pro-
grams for which no current services or
performance is required, such as annu-
ities. insurance claims, and other bene-
fit payments.
  "Accrued income" means the sum of:
(1)  Earnings during a  given  period
from  services performed by the grant-
ee and goods and other tangible prop-
erty delivered to purchasers,  and (2)
amounts  becoming owed to the grant-
ee  for  which  no current services or
         40 CFR Ch. I (7-1-88 iditioA

performance is required by the grant-
ee.
  "Acquisition cost" of an item of pur-
chased equipment means the net in-
voice unit price of the property includ-
ing the cost of modifications, attach-   -
ments. accessories, or  auxiliary  appa-
ratus necessary to make the property
usable  for the purpose for  which it
was  acquired. Other charges such as
the cost of installation, transportation
taxes, duty  or protective in-transit in!
surance. shall be included or excluded
from the unit acquisition cost  in ac-
cordance with the grantee's regular ac-
counting practices.
  "Administrative" requirements mean
those matters common to grants in
general,  such as financial  manage-
ment, kinds and frequency of reports-   '
and  retention of records. These are
distinguished  from  "programmatic";
requirements, which concern matters   •
that can be  treated only on a program-
by-program  or grant-by-grant
such as kinds of activities that can
supported by grants under a pa
program. *
  "Awarding agency" means (1)  with
respect to a grant, the Federal agency,
and  (2) with respect to a subgrant. the
party that awarded the subgrant.
  "Cash   contributions"  means   the
grantee's  cash outlay, including  the
outlay of money contributed to  the
grantee or subgrantee by other public
agencies and Institutions, and private
organizations and  individuals. When
authorized by Federal legislation. Fed-
eral funds received from other assist-
ance agreements may be considered ai
grantee or  subgrantee cash  contribu-
tions.
  "Contract" means (except as used in
the  definitions for "grant" and "sub-
grant"  in  this  section  and except
where qualified by  "Federal") a pro-
curement contract under a  grant or
subgrant, and means a procurement
subcontract under a contract.
  "Cost sharing  or  matching" meant
the  value of the third party
contributions and the portion of
costs of a federally assisted project «
program  not  borne.by  the Federal
Government.
  "Cost-type  contract" means a con-
tract or subcontract under a *ran'™
which the contractor or subcontract

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• ^Environmental Protection Agency

 is  paid  on the basis  of the  costs it
 incurs, with or without & fee.
  "Equipment" means  tangible, nonex-
 pendable,  personal property having a
 useful life of more than one year and
 an acquisition cost of  $5,000 or more
 per unit. A  grantee may  use  its own
 definition  of equipment provided that
 such definition would  at least include
 all equipment defined above.
  "Expenditure report" means: (1) For
 nonconstruction  grants, the  SF-269
 "Financial Status Report" (or  other
 equivalent report); (2) for construction
 grants,  the  SF-271 "Outlay  Report
 and Request for Reimbursement" (or
 other equivalent report).
  "Federally recognized Indian  tribal
 government"  means  the  governing
 body or a governmental agency of any
 Indian tribe, band, na*  ^n, or other or-
 ganized  group  or cotUmuTUty (includ-
 ing any Native village as  defined in
section 3 of the Alaska Native Claims
Settlement Act. 85 Stat 688) certified
by the Secretary of the Interior as eli-
gible for  the  special  programs and
services provided by him through the
Bureau of Indian Affairs.
  "Government" 'means a  State or
local  government or a  federally recog-
nized Indian tribal government.
  "Grant"  means an award of finan-
cial assistance,  including  cooperative
agreements, in the form of money, or
property in lieu of money, by the Fed-
eral Government to an eligible grant-
ee.  The term does not include techni-
cal  assistance which provides services
instead of  money, or other assistance
in the form of  revenue sharing, loans,
loan guarantees, interest subsidies, in-
surance,  or direct appropriations. Also.
the term does  not  include assistance.
such  as  a fellowship  or other  lump
sum award, which the grantee is not
required, to account for.
  "Grantee" means the government to
which a grant is awarded and which is
accountable for the use of the  funds
provided. The  grantee is  the entire
legal  entity even if only a particular
component of the entity is designated
in the grant award document.
  "Local government" means a county,
municipality,  city,  town,  township,
local  public authority  (including any
public and*  Indian housing  agency
under the  United States Housing Act
                             §31.3

of 1937) school district, special district.
intrastate district, council of govern-
ments (whether or not incorporated as
a. nonprofit corporation  under state
law), any other regional or interstate
government entity, or any agency or
instrumentality of a local  government.
  ^'Obligations" means the amounts of
orders placed, contracts and subgrants
awarded, goods and services received,
and similar transactions during a given
period  that will require  payment by
the grantee during,  the same or a
future period.
  "OMB" means  the U.S.  Office of
Management and Budget.
  "Outlays"   (expenditures)   mean
charges made  to  the project or pro-
gram. They may be reported on a cash
or accrual basis. For  reports prepared
on a cash basis, outlays are the sum of
actual  cash disbursement  for  direct
charges for goods and  services,  the
amount of indirect expense incurred.
the value of in-kind contributions ap-
plied,  and the amount  of  cash ad-
vances and payments made to contrac-
tors and subgrantees. For reports pre-
pared on an accrued expenditure basis.
outlays are the sum of actual cash dis-
bursements, the  amount of  indirect
expense incurred, the value of inkind
contributions applied, and the new In-
crease (or  decrease)  in  the amounts
owed by the grantee for goods and
other property received,  for services
performed  by  employees, contractors,
subgrantees, subcontractors, and other
payees,  and other amounts becoming
owed  under programs for  which no
current services or performance are re-
quired,  such as  annuities, insurance
claims, and other benefit payments.
  "Percentage  of  completion method"
refers to a system under which pay-
ments are made for construction work
according to the percentage of comple-
tion of  the work, rather than to the
grantee's cost incurred.
  "Prior approval" means documenta-
tion evidencing consent prior to incur-
ring specific cost.
  "Real property" means land, includ-
ing land improvements, structures and
appurtenances thereto, excluding mov-
able machinery and equipment.
  "Share",  when referring  to  the
awarding  agency's  portion  of  real
property,  equipment  or   supplies.
                                   359

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§31.4

means  the  same  percentage  as the
awarding agency's portion of  the ac-
quiring party's total costs under the
grant to  which the acquisition costs
under the grant to which the  acquisi-
tion cost of  the property was charged.
Only costs are to be counted—not the
value of third-party in-kind contribu-
tions.
  "State" means any  of the  several
States of the United States, the Dis-
trict of Columbia,  the Commonwealth
of Puerto Rico, any territory  or pos-
session  of the  United  States,  or any
agency  or instrumentality of  a State
exclusive  of local governments. The
term does not include  any public and
Indian  housing agency under United
States Housing Act or 1937.
  "Subgrant" means an award  of fi-
nancial assistance in   the form, of
money, or property in  lieu of  money.
made under a grant by  a grantee to an
eligible subgrantee. The term includes
financial assistance when provided by
contractual  legal agreement, but does
not  include  procurement purchases,
nor does it include any form of assist-
ance which  is excluded from the defi-
nition of "grant" in this part.
  "Subgrantee"  means  the  govern-
ment or other legal entity to which a
subgrant is  awarded and which is ac-
countable to the grantee for the use of
the funds .provided.
  "Supplies" means all  tangible per-
sonal property  other  than  "equip-
ment" as defined in this part.
  "Suspension" means  depending on
the  context,  either   (1)  temporary
withdrawal  of the authority  to obli-
gate grant  funds  pending  corrective
action by the grantee or subgrantee or
a decision to terminate  the grant, or
(2)-an action taken by a suspending of-
ficial in accordance with agency regu-
lations implementing E.O. 12549 to im-
mediately exclude a person from par-
ticipating in grant transactions for  a
period,  pending completion of an in-
vestigation  and such  legal or debar-
ment proceedings as may ensue.
  "Termination"   means  permanent
withdrawal  of  the authority  to obli-
gate previously-awarded  grant funds
before that  authority would otherwise
expire.  It also means the voluntary re-
linquishment of that authority by the
        40 CFR Ch. I (7.1.88
grantee or subgrantee. "Terminatic
does not include:
  (1) Withdrawal of funds awarded
the basis of  the  grantee's  underef
mate of the unobligated  balance ir
prior period;
  (2) Withdrawal of the unobliga*
balance as of the expiration of a gr:.
  (3) Refusal  to  extend a grant
award. additional funds, to make
competing or  noncompeting conti:
ation. renewal, extension,  or  sup?
mental award: or
  (4) Voiding  of a grant upon deter
nation that the award  was obtair
fraudulently,  or was otherwise ille
or invalid from inception.
  "Terms  of   a grant  or  subgrar
mean all requirements of the grant
subgrant. whether in statute,  regx:
tions. or the award document.     >-
  "Third party in-kind contributor
mean property or services which be:
fit a federally assisted project or p:
gram and which are contributed
non-Federal   third   parties  withe
charge to the grantee, or a cost-ty
contractor under the grant, agreeme:
  "Unliquidated obligations"  for ;
ports prepared on a cash basis me:  :
the amount of obligations incurred .'•  '
the  grantee that has not  been pa:
For  reports prepared on an accru
expenditure basis, they  represent t.
amount of obligations incurred by t.
grantee for which an outlay has n
been recorded.
  "Unobligated balance"  means  t:
portion of the funds authorized by t,'
Federal agency that has not been ob
gated  by  the grantee  and is dete
mined by deducting the cumulative o
ligations from the cumulative fum
authorized.

931.4 Applicability.
  (a) General Subparts A-D  of th.
part apply to all grants and subgran;
to governments,  except where incox
sistent  with  Federal statutes or wit
regulations authorized in  accordaac
with the exception  provision of j 31.
or
  U) Grants  and subgrants to SUi
and local  institutions of higher edues
tion or State and local hospitals.
  (2) The block grants  authorized b:
the Omnibus Budget ReconcUiatia

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Environmental Protection Agoncy

Act of 1981 (Community Services; Pre-
ventive Health  and Health  Services;
Alcohol,  Drug  Abuse,  and  Mental
Health Services; Maternal and  Child
Health Services; Social Services; Low-
Income  Home   Energy   Assistance;
States' Program of Community Devel-
opment Block Grants for Small Cities;
and Elementary  and Secondary Educa-
tion other  than  programs  adminis-
tered by the-'Secretary of Education
under  Title  V. Subtitle D, Chapter 2.
Section  583—the  Secretary's  discre-
tionary grant program) and  Titles I-
XII of the Job  Training  Partnership
Act  of 1982 and under the  Public
Health Services Act (Section 1921), Al-
cohol and Drug  Abuse Treatment and
Rehabilitation Block  Grant and *art
C  of Title V. M...val Health Sr .ice
for the Homeless Block Grant).
  O) Entitlement grants to carry out
the following programs of the Social
Security Act:
  (i) Aid to  Needy Families with De-
pendent 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);
  (11) Child Support Enforcement and
Establishment of Paternity (Title IV-
D of the Act);
  (iii) Foster Care and Adoption  As-
sistance (Title IV-E of the Act);
  (iv) Aid to the Aged. Blind, and Dis-
abled  (Titles  I.  X.  XIV. and  XVI-
AABD of the Act); and
  (v)  Medical Assistance  (Medlcaid)
(Title T1"* of the Act) not Including
the State Medicald Fraud Control pro*
gram    authorized    by    section
1903(a)(6KB).
  (4) Entitlement grants under the fol-
lowing  programs of The  National
School Lunch Act:
  (1) School Lunch (section  4 of  the
Act).
  (ii) Commodity Assistance (section 6
of the Act).
  (iii) Special Meal Assistance (section
11 of the Act).
  (iv) Summer Food Service  for Chil-
dren (section 13 of the Act), and
  (v) Child  Care Food Program (sec-
tion 17 of the Act).
  (5) Entitlement grants under the fol-
lowing programs of The  Child  Nutri-
tion Act of 1966:
                             §31.6

  (i) Special  Milk (section 3 of  the
Act), and
  (ii) School  Breakfast  (section  4 of
the Act).
  (6) Entitlement grants for State Ad-
ministrative 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 sub-  '
section 412(e) of the Immigration and
Nationality Act (8 U.S.C. 1522(e)) and
subsection  501(a) of the Refugee Edu-
cation Assistance Act of 1980 (Pub. L.
96-422. 94 Stat.  1809). for cash assist-
ance, medical assistance, and supple-
mental security income benefits to ref-
ugees and  entrants and the  adminis-
trative costs  of providing  the assist-
ance and benefits;
  (9) Grants  to  local education agen-
cies under  20 U.S.C. 236 through 241-
l(a), and 242 through 244 (portions of
the Impact Aid program),  except for
20 U.S.C. 238(d)(2)(c) and 240(f) (Enti-
tlement  Increase  for  Handicapped
Children); and
  (10) Payments under the Veterans.
Administration's  State Home   Per
Diem Program (38 U.S.C. 641(a)).
  (b) Entitlement programs. Entitle-
ment programs  enumerated  above in
5 31.4(a) (3) through (8) are subject to
Subpart E.

9 31.5 Effect on other issuances. "
  All other grants administration pro-
visions  of codified program regula-
tions,  program   manuals,  handbooks
and other  nonregulatory  materials
which are inconsistent  with  this pan
are superseded, except to  the extent
they are  required  by  statute, or au-
thorized in accordance with the excep-
tion provision in S 31.6.

§ 31.6 Additions and exceptions
  (a) For classes of grants and grant-
ees subject to this part. Federal agen-
cies may not impose additional admin-
istrative requirements except in codi-
fied regulations published  in the FED-
ERAL REGISTER.

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§ 31.10

  (b) Exceptions for classes of grants
or grantees may be authorized only by
OMB.
  (c) Exceptions  on  a  case-by-case
basis and for subgrantees may be au-
thorized by the affected Federal agen-
cies.
  (1) In the Environmental  Protection
Agency.the Director, Grants Adminis-
tration Division, is authorized to grant
the exceptions.
  (d) The EPA Director is also author-
ized to approve exceptions, on a class
or  an individual case  basis, to EPA
program—specific  assistance  regula-
tions other than those which imple-
ment statutory and executive order re-
quirements.  .
(&3 FR 8068 and 8087, Mar. 11. 1988, And
amended tt 53  FR 8075, Mar. 11.19881
  Erncnvi DATE NOTE At 53 FR 8075. Mar.
11.1988, i 31.8 (CXI) and (d) were added, ef-
fective October 1.1988.

Subpart S—Pre-Award Requirements

fl 31.10 Forms for applying for grants.
  (a) Scope (1) This section prescribes
forms and instructions to be used by
governmental  organizations  (except
hospitals and institutions  of higher
education operated by a government)
in applying for grants. This section is
not  applicable, however, to formula
grant programs which do not require
applicants to  apply  for funds  on  a
project basis.
  (2) This section applies only to appli-
cations to Federal agencies for grants,
and is not required to  be  applied by
grantees In dealing with applicants for
subgrants. However,  grantees are en-
couraged to  avoid more detailed  or
burdensome  application  requirements
for subgrants.
  (b) Authorized forms  and  instruc-
tions for governmental organizations.
(1) In applying for grants, applicants
shall  only use  standard  application
forms  or those  prescribed  by  the
granting agency with the approval of
OMB under  the Paperwork Reduction
Act of 1980.
  (2) Applicants are  not required to
submit more than the original and two
copies of preapplications  or applica-
tions.
         40 CFR Ch. I (7-1-88

  (3) Applicants must follow all appli-
cable  instructions  that  bear OMB
clearance numbers.  Federal  agencies
may specify and describe the  pro-
grams, functions, or activities that win
be used to plan, budget, and evaluate
the work under a grant. Other supple-
mentary instructions  may be .'issued
only with the approval of OMB to the
extent required under the Paperwork
Reduction Act  of 1980. For any stand-
ard form, except the SF-424 facesheet.
Federal agencies may shade out or in-
struct  the applicant  to disregard any
line item that is not needed.
  (4) When a grantee applies for addi-
tional  funding  (such as a continuation
or supplemental award) or amends a
previously submitted application, only
the affected pages need be submitted.
Previously submitted pages with infor-
mation that is still current need not be
resubmitted.

§31.11  State plan*.
  (a) Scope. The statutes Jor some pro-
grams require  States to. submit plans
before receiving grants. Under regula-
tions  implementing  Executive1 Order
12372. "Intergovernmental Review of
Federal Programs," States are allowed
to simplify, consolidate and substitute
plans.  This section contains additional
provisions for plans that are subject to
regulations implementing the Execu-
tive Order.
  (b) Requirements. A State need  meet
only Federal  administrative  or pro-
grammatic requirements  for a  plan
that are in statutes  or codified regula-
tions.
  (c)  Assurances. In each plan the
•State  will include an assurance  that
the State shall comply with all appli-
cable  Federal statutes and regulations
 In  effect with respect to the periodi
 for which it  receives  grant  funding.
 For this assurance  and other assur-
 ances required in the plan, the Suu
 may:
  (1) Cite by number the statutory or
 regulatory provisions requiring the as-
 surances and  affirm that it gives th«
 assurances  required by  those pro*
 sions,                           ,
   (2) Repeat the assurance language la
 the statutes or regulations, or
                                     362

-------
   (3) Develop its owu language to the
 extent permitted by law.
   (d) Amendments. A State will amend
 a plan whenever necessary to reflect:
 (1) New or revised Federal statutes or
 regulations or (2) a material change in
 any State law, organization, policy, or
 State agency operation. The State will
 obtain approval  for  the amendment
 and its effective date  but need submit
 for approval only the  amended por-
 tions of. the plan..

 §31.12  Special grant or  subgrant condi-
     tions for "high-risk" grantees.
  (a) A grantee or subgrantee may be
 considered "high risk" if an awarding
 agency determines that a  grantee or
 subgrantee:
  (1) Has a  history of  unsatisfactory
 performance, or
  (2) Is not financially stable, or
  (3) Has a management sy.cem which
 does not meet the management stand-
 ards set forth in this part, or
  (4) Has not conformed to terms and
 conditions of previous awards, or
  (5) Is otherwise not  responsible; and
 if  the awarding agency  determines
 that an award will be  made, special
 conditions and/or  restrictions  shall
 correspond to the high  risk condition
 \nd shall be included in the award.
  (b) Special conditions  or restrictions
 may include:
  d) Payment on  a reimbursement
 basis:
  (2) Withholding authority  to pro-
 ceed to the next  phase until receipt of
 evidence  of   acceptable  performance
•within a given funding period;
  (3) Requiring  additional, more de-
 tailed financial reports;
  (4) Additional project monitoring;
  (5) Requiring the grante or subgran-
 tee to obtain technical or management
 assistance; or
  (6) Establishing additional prior ap-
 provals.
  (c) If an awarding agency decides to
 impose such conditions, the awarding
 official will notify the grantee or sub*
 grantee as early as possible, in writing.
 of:
  (l) The nature of the special condi-
 tions / restrictions;
  (2) The reason(s) for imposing them:
  (3) The  corrective  actions  which
 •nust be taken before they will be re-
moved and the time allowed tor com-
pleting the corrective actions and
  (4) The method of requesting recon-
sideration  of  the  conditions/restric-
tions imposed.

§31.13  Principal environmental statutory
    provisions applicable  to  EPA  assist-
    ance awards.
  Grantees shall comply with ail appli-
cable Federal laws including:
  (a) Section 306 of the Clean Air Act,
(42U.S.C. 7606).
  (b) Section 508 of the Federal Water
Pollution Control Act. as amended. (33
U.S.C. 1368).
  (c)  Section  1424(e)  of  the Safe
Drinking Water Act, (42 U.S.C.  300h-
3(e».

(53 FR 8075. Mar. 11.1988)
  EmcTivc DATE Now: At 53 PR 8075. Mar.
11. 19f.8. {31.13 was added..effective Octo-
ber t. 1988.

Subport C—Post-Award Requirements

      FINANCIAL ADMINISTRATION

§31.20  Standard*  for financial  manage-
    ment systems.
  (a)  A State  must expand and ac-
count  for  grant  funds in  accordance
with State laws and procedures for ex-
pending and accounting for its own
funds. Fiscal control and  accounting
procedures of the State, as well as its
subgrantees and cost-type contractors,
must be sufficient to—
  (1) Permit preparation of reports re-
quired by  this part and the statutes
authorizing the grant, and
  (2) Permit the tracing of funds  to a
level of expenditures  adequate to es-
tablish that such funds have not been
used  in violation of the  restrictions
and prohibitions  of applicable stat-
utes.
  (b)  The  financial management  sys-
tems  of other grantees and subgran-
tees must meet the following  stand-
ards:
  (1)  Financial  reporting. Accurate,
current, and  complete  disclosure of
the financial results of financially as-
sisted  activities must  be made in ac-
cordance with  the  financial reporting
requirements of the grant or subgrant.
                                    363

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§31.21

  (2)  Accounting  records.  Grantees
and  subgrantees   must   maintain
records which adequately identify the
source and  application  of funds pro-
vided for financially-assisted activities.
These records must  contain informa-
tion pertaining to grant or subgrant
awards  and  authorizations,  obliga-
tions, unobligated  balances,  assets, li-
abilities, outlays* or expenditures, and
income.
  (3)  Internal control Effective con-
trol and accountability must be main-
tained for all grant and subgrant cash.
real and personal property, and other
assets. Grantees and subgrantees must
adequately safeguard all such  proper-
ty  and  must assure that it  is used
solely for authorized purposes.
  (4) Budget control Actual expendi-
tures  or outlays must  be compared
with budgeted amounts for each grant
or  subgrant. Financial information
must be related to performance or pro-
ductivity data, including the develop-
ment  of unit cost  information when-
ever appropriate  or specifically  re-
quired in the grant or subgrant agree-
ment. If unit cost data are required,
estimates based on available  documen-
tation will be accepted whenever possi-
ble.
  (5) Allowable cost  Applicable OMB
cost principles, agency program regu-
lations,  and  the terms  of grant  and
subgrant agreements will  be followed
in determining the reasonableness, al-
lowability, and allocability of costs.
  (6) Source  documentation. Account-
ing records must be supported  by such
source  documentation  as  cancelled
checks,  paid bills,  payrolls,  time and
attendance records, contract and sub-
grant award documents,  etc.
  (7), Cash  management  Procedures
for minimizing the time elapsing  be-
tween the transfer of funds from the
U.S. Treasury  and  disbursement  by
grantees and subgrantees cust be fol-
lowed whenever advance payment pro-
cedures are used. Grantees must estab-
lish reasonable procedures  to ensure
the receipt of reports on subgrantees'
cash balances and  cash  disbursements
in sufficient time  to enable them  to
prepare complete  and  accurate cash
transactions  reports to  the awarding
srency. When  advances are made by
'puer-of-credit  or  electronic  transfer
        40 CFR Ch. I (7-1-38 Edition)

of funds methods, the grantee must
make drawdowns  as close as possible
to the time of making disbursements.
Grantees  must monitor cash  draw-
downs by  their subgrantees  to assure
that they conform substantially to the
same standards of timing and amount
as apply to advances to the grantees.
  (c) An awarding agency may review
the adequacy of the financial manage-
ment system of any applicant for fi-
nancial assistance   as   part  of  a
preaward review or at any time subse-
quent to award.

§ 31.21  PmvmenL
  (a) Scope. This section prescribes the
basic standard and the methods under
which a Federal agency will make pay-
ments to  grantees,  and  grantees  will
make payments  to subgrantees  and
contractors.
  (b)  Basic standard.  Methods  and
procedures for payment  shall mini-
mize  the  time elapsing  between  the
transfer of funds and disbursement by
the grantee or subgrantee. in accord-
ance with Treasury regulations at 31
CFR Part  205.
  (c) Advances. Grantees  and subgran-
tees shall  be paid  in advance, provided
they maintain or demonstrate the will-
ingness and ability to maintain proce-
dures to minimize the time elapsing
between the transfer of the funds and
their disbursement by the grantee or
subgrantee.
  (d)  Reimbursement Reimbursement
shall be the preferred method when
the requirements in paragraph (c) of
this section are not met. Grantees and
subgrantees may also be paid by reim-
bursement for any construction grant.
Except as otherwise specified in regu-
lation. Federal agencies shall not use
the percentage of completion method
to pay construction grants. The grant-
ee or subgrantee may use that method
to pay its  construction contractor, and
if it does,  the awarding agency's  pay-
ments to   the  grantee or subgrantee
will be based on  the grantee's or sub-
grantee's actual rate of disbursement.
  
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 Invtronmotital Protection Agoncy

 bursement Is not feasible because the
 grantee  lacks sufficient  working cap-
 ital, the awarding agency may provide
 cash or  a working  capital advance
 basis. Under this procedure the award*
 ing agency shall advance cash to the
 grantee  to cover its estimated dis-
 bursement needs for  an  initial period
 generally geared to the grantee's dis-
 bursing cycle. Thereafter, the award-
 ing agency shall reimburse the grantee
 for its actual cash disbursements. The
 working capitalJ 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. grantee to  provide
 timely advances to  the subgrantee  to
 meet the subgrantee's actual cash dis-
 bursements.
  (I) Effect of  program  income, re*
funds,  and audit recoveries o i  pay-
 ment  (1)  Grantees and  subgrantees
 shall disburse repayments to and in-
 terest  earned on a  revolving   fund
 before requesting additional cash pay-
 ments for the same activity.
  (2) Except as provided in paragraph
(fXl) of this section, grantees and sub-
 grantees   shall  disburse   program
 income, rebates, refunds, contract set-
 tlements, audit recoveries and interest
 earned on such  funds before request-
 ing 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)  The grantee or subgrantee has
 failed to comply  with  grant award con-
ditions or
  (ii) The grantee or subgrantee is in*
debted to the United States.
  (2)  Cash  withheld  for  -failure  to
 comply with grant award condition,
 but without suspension of the grant,
shall be released to the grantee upon
 subsequent compliance. When a  grant
 is suspended, payment  .adjustments
 will  be  made  in  accordance   with
 !31.43(c).
  (3) A Federal agency shall not make
 payment to grantees for amounts that
 are withheld by grantees or subgran-
 tees  from payment to contractors  to
 assure   satisfactory  completion  of
 work. Payments shall be made by the
                            §31.22

Federal agency when the grantees or
subgrantees  actually  disburse   the
withheld funds to the contractors or
to  escrow  accounts  established  to
assure  satisfactory  completion  of
work.
  (h)  Cash depositories. (I) Consistent
with  the  national goal  of expanding
the opportunities for  minority  busi-
ness  enterprises,  grantees and sub-
grantees are encouraged to use minori-
ty banks  (a bank which is owned at
least  50 percent by  minority group
members). A list  of minority owned
banks can be obtained  from the Mi-
nority Business Development Agency,
Department  of Commerce,  Washing-
ton. DC 20230.
  (2)  A grantee  or subgrantee  shall
maintain a separate bank account only
when required by Federal-State agree-
ment.
  (i)  Interest  earned  on  advances.
Except for interest earned on advances
of funds exempt under the Intergov-
ernmental Cooperation Act (31 U.S.C.
6501 et seq.) and the Indian Self-De-
termination Act (23 U.S.C. 450). grant-
ees 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.

9 31.22 Allowable com.
  (a)  Limitation  on  use  of funds.
Grant funds may be used only  for.
  (1) The allowable costs of the grant-
ees, subgrantees and cost-type  contrac-
tors,  including allowable costs in the
form of payments to fixed-price con-
tractors; and
  (2) Reasonable fees or profit to cost-
type  contractors but not any fee or
profit (or other  increment above al-
lowable costs) to the grantee or sub-
grantee.
  (b)  Applicable  cost  principles.  For
each  kind of organization, there is a
set of Federal principles for determin-
ing  allowable  costs. Allowable costs
will be determined in accordance with
the  cost  principles applicable to the
organization incurring the costs. The
following chart lists the kinds of orga-
nizations and the applicable cost prin-
ciples.
                                   365

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  31.24
                                                   cm en. i V./-I-OQ
   For th» costs of a—
 SUM. toon or Indian Mai
Pnvaw nonprofit eroaraaton
 omar ffwn an (1)
 Of  Nghor •ducabon.
 "•fttf^y. Of \3f
 namad «i OMB Crcuar A-
 122 u not «ubt«a to thai
OM8 Ocular A-S7

O8M Cirailar A.I 22.
                (2) j
Educational raMu&ons	
For-proM orga/waoon oinar
  than a hospital and an or-
  ganoataon named m OBM I
  OcUar A-122 as not sub- '
  tact to that ocular.
                   OMB Circular A-2V
                   48 CFfl Pan 31. Contract
                    Coat Pnne<>Ks and Procs-
                    durat. or uniform cost ac-
                    counting standards  thai
                    Comply witfi cost pnnocM**
                    accaplatta to tha Fadaral
§ 31.23  Period fo availability of funds.
  (a) General Where ft funding period
is specified, a grantee may charge to
the  award only costs resulting  from
obligations  of  the  funding  period
unless carryover of  unobligated bal-
ances 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 90  days  after  the end  of the
funding period (or  as specified in a
program regulation)  to  coincide with
the submission of the annual Finan-
cial Status Report (SF-289). The Fed-
eral  agency may extend this deadline
at the request of the grantee.

§ 31.24  Matching or cost sharing.
  (a) Basic rule: Costa and contribu-
tions acceptable. With  the .qualifica-
tions and exceptions listed in  para-
graph (b) of this section, a matching
or cost sharing requirement may be
satisfied by either or both  of the fol-
lowing:
  (1) Allowable costs incurred by the
grantee, subgrantee or a  cost-type con-
tractor  under  the  assistance  agree-
ment.  This  includes  allowable  costs
borne  by  non-Federal  grants  or by
others cash.donations from non-Feder-
al third panics.
  (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—
 (1) Costs borne by other Federal grant
 agreements.  Except  as provided  by
 Federal  statute,  a cost  sharing  or
 matching requirement may not be met
 by  costs borne  by another Federal
 grant. This prohibition does  not apply
 to income earned by a grantee or sub-
 grantee  from; a  contract   awarded
 under another Federal grant.
  (2) General revenue sharing. For the
 purpose  of  this section, general reve-
 nue sharing funds distributed under
 31 U.S.C. 6702 are not considered Fed-
 eral grant funds.
  (3) Cost or contributions counted to-
 wards other Federal  costs-sharing re-
 quirements.  Neither  costs   nor the
 values of third party in-kind contribu-
 tions may count towards satisfying a
 cost sharing or matching requirement
 of  a grant agreement  if they  have
 been or  will be counted towards .satis*:
lying a  cost sharing or matching  re-
 quirement of  another Federal  grant
 agreement,  a  Federal procurement
 contract, or any other award of Feder-
 al funds.
  (4)  Costs  financed  by   program
 income.  Costs financed  by  program
 income,  as defined in § 31.25, shall not
 count towards satisfying a cost sharing
 or matching requirement  unless they
 are  expressly permitted in the terms
 of the assistance agreement. (This use
 of  general program  income is  de-
 scribed in ! 31.25(g).)
  (5) Services or property financed by
 income  earned by contractors.  Con-
 tractors  under  a grant may  earn
 income from the activities carried out
 under the contract in addition to the
 amounts earned from the party award-
 ing  the  contract. No costs of services
 or property supported  by  this income
 may count toward 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 re-
 quirement.
  (6) Records.  Costs and  third  party
 in-kind contributions counting towards
 satisfying a cost sharing or matching
 requirement must be verifiable from
 the records of grantees and subgrantee
 or cost-type contractors. These records
                                    366

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 Environmental Pr»t»«tion Agency

 must show how the  value placed on
 third party In-kind contributions was
 derived. To the extent feasible, volun-
 teer services will be supported by the
 same methods  that the organization
 uses to support the allocability of reg-
 ular personnel costs.
  (7> Special standards for third party
 in-kind contributions. (1) Third  party
 in-kind contributions  count towards
 satisfying a cost sharing or matching
 requirement only where, if  the  party
 receiving  the contributions  were  to
 pay for them, the payments would be
 allowable costs.
  (ii) Some third party in-kind contri-
 butions are goods and services that. If
 the grantee, subgrantee. or contractor
 receiving the contribution had to pay
 for them,  the  payments  would have
 been an indirect costs.  Costs sharing
 or matching credit for such contribu-
 tions shall be given only if the grant-
 ee, subgrantee. or contractor has es-
 tablished,  along with its regular indi-
 rect  cost rate, a special rate for allo-
 cating  to  individual projects or pro-
 grams the value of the contributions.
  (ill) A third party in-kind contribu-
 tion  to a  fixed-price contract may
 count towards satisfying-a cost sharing
 or matching requirement only if It re-
sults in:
  (A)^An  increase in the services  or
 property provided under the contract
 (without additional cost to the grantee
or subgrantee) or
  (B) A cost savings to the grantee or
subgrantee.
  (iv) The values placed on third party
 in-kind contributions for cost sharing
or matching .purposes will conform to
 the rules in the succeeding sections of
 this part. If a third party in-kind con-
 tribution is a type not treated in those
 sections, the value placed upon it shall
 be fair and reasonable.
  (c) Valuation  o/ donated services—
 (1) Volunteer services. Unpaid services
 provided to a grantee or subgrantee by
 individuals will be valued at rates con-
 sistent with those ordinarily paid for
 similar work in the grantee's or sub-
 grantee's organization. If the grantee
 or subgrantee does not have employ*
 ees performing similar work: che rates
 will be consistent with those ordinarily
 paid by other  employers -for similar
 work in the same labor market.  In
                            §31.24

either case, a reasonable amount for
fringe benefits may be included in the
valuation.
  (2)  Employees  of  other organiza-
tions. When an employer other than a
grantee, subgrantee. or cost-type con-
tractor furnishes free  of  charge the
services of an employee in the employ-
ee's normal line  of work, the services
will be valued at the employee's  regu-
lar rate of  pay  exclusive  of  the em-
ployee's fringe benefits and overhead
costs. If the services are in a different
line of work, paragraph (cXl) of this
section applies.
  (d) Valuation of third party donated
supplies  and loaned  equipment or
space. (1) If a third party donates sup-
plies, the contribution will be valued
at the market value of the supplies at
the time of donation.
  (2) If a third party donates the use
of equipment or space in a  building
but retains title, the contribution will
be valued at the  fair rental rate of the
equipment or space.
  (e) Valuation of third party donated
equipment,  buildings, and land. If a
third party donates equipment, build-
ings,  or  land, and title passes to a
grantee or subgrantee. the treatment
of the donated  property  will depend
upon the purpose of the grant or sub-
grant, as follows:
  (1) Awards for capital expenditures.
If the purpose  of the grant or sub-
grant is to  assist the grantee or sub-
grantee in the acquisition of property,
the market value  of that property at
the time of donation may be counted
as cost sharing or matching,
  (2) Other awards. If assisting in the
acquisition of property is  not the pur-
pose of the grant or subgrant. para-
graphs (eX2) (i)  and 
-------
 $31.23
         40 CNl Co. I (7-1-M fedit.e
 as an allowable direct cost. If any part
 of the donated property was acquired
 with Federal funds, only the non-fed-
 eral ahare  of  the property may be
 counted at cost-sharing or matching.
   Valuation c/ grantee or tubgran-
 tee donated real property far cofutmc-
 tion/a&ruisition.  If a grantee or sub-
grantee donates  real property for a
construction -or facilities acquisition
project, the current market value of
that property may be counted  as cost
sharing or matching. If any part -of
the  donated property  was  acquired
with Federal funds, only the non-fed-
eral  share of the property may be
counted as cost ahartnf or
  (g)  Appraisal  of real  property. In
some cases under  paragraphs (d), (e)
and (f ) of this section, it will be neces-
sary to establish the market value of
land or a building or the fair rental
rate of land or of  apace in a building.
In these  cases,  the  Federal agency
may require the market  value or fair
rental value be set by an independent
appraiser, and that the value or rate
be certified by  the grantee.  This re-
quirement will also be imposed by the
grantee on subgrantees.

9 31.2S  Program income.
    General Grantees  are  encour-
aged  to  earn income to  defray pro-
gram cost*.  Program income includes
income  from  fees for services per-
formed, from the use or rental of real
or personal  property  acquired with
grant funds, from the sale of commc
ities or items fabricated under a gra
agreement,  and  from  payments
principal and interest on loans ma
with grant funds. Except as otherw
provided in regulations of the-Fede:
agency, program Income does not
elude interest on grant funds, rebat
credits, discounts, refunds, etc. and
terest earned, on any of them.
  (b)  Definition of program incor
Program income means gross incoi
received by the grantee or subgrant
directly generated by a grant suppo
ed activity, or earned only as a resi
of the grant agreement during t
grant  period.  "During  the  gra  •
period" is the time between the eff•
tive date of the award and the end!
date of the award reflected in the fix
financial report.
  
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 Environmental Protection Agency

 amount*  of  income.  When  Federal
 agencies authorize the alternatives in
 paragraphs (g) (2) and (3) of this sec-
 tion, program Income in  excess of any
 limits stipulated shall also be deducted
 from outlays.
  (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 Fed-
 eral agency and grantee  contributions
 rather than to increase the funds com*
 mitted to the project.
  (2) Addition. When authorized, pro-
 gram income may be added to the
 funds committed to the grant agree-
 ment 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) Co*t 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.
 There are  no Federal  requirements
 governing the disposition of program
 income  earned after the end of the
 award period (Le.. until the ending
 date of the final financial report, see
 paragraph (a) of this  section), unless
 the terms-of the agreement or the
Federal agency  regulations  provide
otherwise.

831.2* .N**-Ifcteal audit
  (a)  Batic 'rate.  Grantees  and sub-
 grantees are responsible  for obtaining
audits, in accordance  with the Single
Audit'Act el 1984 (31 XLS.C. 7501-T)
and Federal agency implementing reg-
 ulations. The audits shall be made by
 an independent auditor in accordance
 with  generally accepted government
 auditing ff^ft"ri*rdn covering *t"«"<»4«i
and compliance audits.
  4b>- Svbffrantee*. State  or  local gov-
ernments, as those terms are defined
 for  purposes of the Single Audit Act,
 that receive Federal financial assist-
 ance and provide $25,000 or  more of it
 in a fiscal year to a subgrantee shall:
                            §31 JO

  (1) Determine whether State or local
subgrantees have  met 'the audit re-
quirements of the Act and whether
subgrantees covered by OMB Circular
A-110,  "Uniform  Requirements  for
Grants  and Other Agreements with
Institutions of Higher Education, Hos-
pitals and Other Nonprofit Organiza-
tions" have met  the audit  require-
ment. Commercial contractors (private
forprofit and private  and governmen-
tal organization*) providing goods and
services  to State  and local govern-
ments are not  required  to have  a
single audit performed. State and local
govenments should use their own pro-
cedures to ensure that the contractor
has compiled  with laws and  regula-
tions affecting the  expenditure of Fed-
eral funds:
  (2) Determine whether the auogran-
tee spent Federal assistance funds pro-
vided In accordance  with  applicable
laws and regulations. This may be ac-
complished by reviewing an audit of
the subgrantee  made in  accordance
with  the  Act,  Circular   A-110,  or
through other means (e.g., program
reviews) if the subgrantee has not had
such an audit;
  (3) Ensure that  appropriate correc-
tive action Is taken within six months
after receipt of the audit report in in-
stance of noncompliance with Federal.
laws and regulations;
  (4)  Consider  whether  subgrantee
audits necessitate  adjustment of .the
grantee's own records; and
  (ft)-. Require each  .subgrantee  to
       Independent auditors to have
       to tt^ records and ^fa
  (c) Auditor  selection In arranging
for audit services, 1 31.36 shall be fol-
lowed,
. ABB SUBAWABM
  CHAjress, PRO

SUJt  Changes.

  (aO General. Grantees and subgran-
tees ar» permitted to rebudget within
the approved direct cost  budget to
meet unanticipated requirements and
m«y m*ir» ]tmit»4 progr*""1 changes to
the approved, project. However, unless
waived  by the awarding agency, cer-
tain types of post-award changes in
budgets and projects shall require the
                                   369

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 §31.31

 prior written approval of the awarding
 agency.
  (b) Relation to cost principles. The
 applicable cost principles (see 9 31.22):
 contain requirements for prior approv-
 al of  certain types of costs. Except
 where  waived,  those  requirements
 apply to all grants and subgrants even
 if paragraphs (c) through (f) of this
 section do not.
  (c) Budget changes. (1) Nonconstruc*
 tion projects. Except as stated in other
 regulations or  an  award document,
 grantees  or subgrantees shall obtain
 the  prior approval  of the  awarding
 agency whenever any of the  following
 changes is anticipated under a noncon-
 struction award:
  
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 Environmental Protection Ag«"«V .

  (b) Use. Except as otherwise provid-
 ed by Federal statutes, real property
 will be used for the originally author-
 ized purposes  as long as needed for
 that purposes, and the grantee or sub-
 grantee shall not dispose of  or encum-
 ber its title or other interests.
  (c) Disposition. When real property
 is no longer needed for the originally
 authorized purpose,  the grantee  or
 subgrantee will request disposition in-
 structions from the awarding agency.
 The instructions will provide for one
 of the following alternatives:
  (1) Retention of title. Retain title
 after  compensating   the  awarding
 agency.  The   amount  paid  to the
 awarding agency will  be computed by
 applying the  awarding agency'* per-
 centage of participation in the cost of
 the  original  purchase  to   the fair
 market value of the property. Howev-
 er, in those situations where a grantee
or subgrantee  is disposing of real prop-
 erty acquired with grant funds and ac-
 quiring  replacement  real   property
 under the same program, the net pro*
 ceeds  from the  disposition may  be
 used as an offset to the cost of the re-
 placement property.
  (2) Sole of property. Sell the proper-
 ty  and  compensate  the  awarding
 agency. The amount due to the award-
 ing agency will be calculated by apply*
 ing the awarding agency's percentage
of participation in  the cost of the
original purchase to  the  proceeds  of
the sale after  deduction of any actual
and  reasonable selling and fixing-up
expenses. If the grant is still active,
the  net  proceeds  from sale  may  be
offset against  the original cost of the
property. When a grantee or subgran-
 tee is directed to sell property, sales
 procedures shall be followed that pro-
 vide for competition to the  extent
 practicable and result in the highest
 possible return.
  (3) Transfer of title. Transfer title to
 the  awarding  agency or. to a  third*
 party  designated/approved  by the
 awarding agency. The grantee or sub-
 grantee shall be paid an amount calcu-
 lated by  applying the grantee or sub-
 grantee's percentage  of  participation
 in the purchase of the real property to
 the current fair market value of the
 property.
                            §31.32

§ 31.32  Equipment.
  (a) Title. Subject  to the obligations
and conditions set  forth in this sec-
tion, title to equipment acquired under
a grant or subgrant will vest upon ac-
quisition in the grantee or subgrantee
respectively.
  (b) States. A State will use. manage,
and dispose  of equipment acquired
under a grant by the State in accord-
ance with State laws and procedures.
Other  grantees  and subgrantees  will
follow  paragraphs (c) through   of
this section.
  (c) Use. U) Equipment shall be used
by the grantee  or  subgrantee  in the
program or project for which  it was
acquired as long as needed, whether or
not the project  or program c  ^tnues
to be  supported by Federal  funds.
When no longer needed for the origi-
nal program or project, the equipment
may be used in other activities  cur-
rently  or  previously supported by a
Federal agency.
  (2) The  grantee or subgrantee shall
also make equipment available for use
on other projects or programs current-
ly or previously supported by the Fed-
eral Government, providing such use
wUl not interfere with the work  on the
projects or program for which  it was
originally  acquired. First  preference
for other  use shall be given to other
programs or projects supported by the
awarding agency. User fees should be
considered if appropriate.
  (3) Notwithstanding the encourage-
ment  in § 31.25(a) to earn  program
Income, the  grantee  or  subgrantee
must not use equipment acquired with
grant funds  to  provide  services for  a
fee to compete unfairly with  private
cbmpanies  that provide  equivalent
services, unless  specifically permitted
or contemplated by Federal statute.
  (4)   When  acquiring  replacement
equipment, the  grantee or subgrantee
may use the equipment to be replaced
as a trade-in or sell the property and
use the proceeds to offset the  cost of
the replacement property, subject to
the approval of the awarding agency.
  (d)  Management  requirements. Pro-
cedures for managing equipment (in-
cluding   replacement    equipment).
whether acquired in whole or  in part
with  grant  funds, until  disposition
                                   371

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 $31.33
         40 CFR Ch. I (7-1-«8 Edition)
 takes place will, as a minimum, meet
 the following requirements:
  (1) Property records must be main-
 tained  that  include a  description of
 the property, a serial number or other
 identification number,  the  source of
 property, who  holds title, the acquisi-
 tion date, and  cost of the  property,
 percentage of Federal participation in
 the cost of the property, the location,
 use and condition of the property,  and
 any ultimate disposition data  includ-
 ing the date  of disposal and sale price
 of the property.
  (2) A  physical inventory of the prop-
 erty must be  taken and the results  rec-
 onciled with the property records at
 least once every two years.
  <3) A control system must be devel-
 oped to ensure adequate safeguards to
 prevent loss, damage, or theft of  the
 property. Any  loss, damage, or theft
 shall be investigated.
  (4)  Adequate  maintenance  proce-
 dures 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  be  established to  ensure   the
 highest possible return.
  (e) Disposition. When original or re-
 placement equipment acquired under
 a  grant  or  subgrant  is no  longer
 needed  for the  original project or pro-
 gram or for other activities currently
 or previously supported by  a Federal
 agency, disposition  of the equipment
 will be made as follows:
  (1) Items of equipment with a cur-
 rent per-unit fair market value of  less
 than $5,000 may be retained, sold or
 otherwise disposed of with no further
 obligation to  the awarding agency.
  (2) Items of equipment with a cur-
 rent per  unit  fair market  value in
 excess  of (5,000 may be  retained or
sold and  the awarding agency shall
 have a  right  to an amount calculated
by  multiplying the current market
value or proceeds from sale by  the
awarding agency's share of the equip-
ment.
  (3) In cases where a grantee or sub?
 grantee fails to take appropriate dispo-
 sition actions,  the awarding agency
 may direct the grantee  or subgrantee
 to take  excess and disposition actions.
  (f) Federal equipment In the event a
grantee or subgrantee is provided fed-
erally-owned equipment:
  (1) Title will remain  vested in the
Federal Government.
  (2)  Grantees  or subgrantees  will
manage the equipment  in accordance
with Federal agency rules and proce-
dures, and submit an annual inventory.
listing.
  (3) When the equipment is no longer t
needed, the grantee or subgrantee will
request disposition instructions  from
the Federal agency.                  I
  (g) Riffht to transfer title. The Feder-
al awarding agency may  reserve the<
right to transfer title to  the Federal:
Government or a third part  named byx
the  awarding agency   when such a\
third party is otherwise eligible under?
existing statutes. Such transfers shall;
be subject to the following standards::
  (1) The  property shall be  identified -
in the grant or otherwise made known:!
to the grantee in writing.
  (2) The Federal awarding  agency %
shall   issue  disposition  instruction "
within 120 calendar days after the end
of the  Federal support  of the project
for which it was acquired. If the Fed-
eral awarding agency fails to issue dis-
position instructions within the 120
calendar-day period the grantee.shall
follow 31.32(e).
  (3) When title to equipment is trans-
ferred, the grantee shall  be paid an
amount calculated by  applying the
percentage of participation in the pur-
chase to the current fair market value
of the property.

631.33  Supplies.
  (a) Title. Title  to supplies acquired
under  a grant  or subgrant will vest.
upon acquisition,  in  the grantee  or
subgrantee respectively.
  (b) Disposition. If there  is a residual
Inventory  of  unused supplies  exceed-
ing  $5.000  in  total  aggregate  fair
market value  upon  termination  or
completion of the  award, and if the
supplies are not needed for  any other
federally  sponsored    programs   or
projects,  the  grantee   or subgrantee
shall compensate the awarding agency
for its share.

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 Environmental Protection Agency

 § 31.34  Copyright*.
  The  Federal  awarding  agency  re-
 serves  a  royalty-free,  nonexclusive.
 and irrevocable license  to reproduce,
 publish or otherwise use, and to au-
 thorize others to use, for Federal Gov-
 ernment purposes:
  (a) The copyright in any work devel-
 oped under a grant, subgrant. or con-
 tract under a grant or subgrant; and
  (b) Any rights of copyright to which
 a grantee, subgrantee or a contractor
.purchases ownership with grant sup-
 port.

 S 31.35   Subawardi to debarred and  sus-
    pended 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 sus-
 pended or is otherwise excluded from
 or ineligible for participation in Feder-
 al assistance programs under Execu-
 tive Order 12549, "Debarment and
 Suspension."

 931.36  Procurement
 jft). States. When procuring property
and services under a grant, a State will
follow  the same policies  and  proce-
dures it uses for procurements from its
non-Federal  funds.  The  State will
ensure that every purchase  order or
other contract includes any clauses re-
quired  by Federal statutes and execu-
tive orders and  their  implementing
regulations. Other grantees and sub-
grantees-will  follow paragraphs (b)
through (i) in this section,
  (b)   Procurement   standards.  (1)
Grantees and  subgrantees  will  use
their own  procurement  procedures
which  reflect  applicable  State and
local laws and regulations,  provided
that the procurements conform to ap-
plicable Federal law and the standards
identified in this section.
  (2) Grantees and  subgrantees will
maintain  a contract  administration
system which ensures that contractors
perform in accordance with the terms,
conditions, and specifications of their
contracts or purchase orders.
  (3) Grantees and  subgrantees  will
maintain  a written code of standards
 of conduct governing the performance
of  their  employees engaged in  the
 award and administration of contracts.
                             § 31.36

No employee, officer or agent of the
grantee or subgrantee shall participate
in selection, or in the award or admin-
istration of a contract supported by
Federal funds if a conflict of interest.
real or apparent, would be involved.
Such a conflict would arise when:
  (i) The employee, officer or agent.
  (ii) Any  member  of  his immediate
family,
  (iii) His or her partner, or
  (iv> An organization which  employs.
or. is about  to employ,  any of the
above,  has a financial or other interest
in the  firm  selected for  award.  The
grantee's or subgrantee's officers, em-
ployees or agents will neither solicit
nor  accept gratuities,  favors  or  any-
thing of monetary value from contrac-
tors, potential contractors, or parties
to subagreements. Grantee -nd  sub-
grantees  may  set  minimum  rules
where the financial interest is not sub-
stantial 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 con-.
duct will provide for penalties, sanc-
tions, or other disciplinary actions for
violations of  such  standards by the
grantee's  and subgrantee's  officers.
employees, or agents,  or  by contrac-
tors or their agents.  The awarding
agency may in regulation provide addi-
tional prohibitions relative to real, ap-
parent, or potential conflicts of inter-
est.
 . (4) Grantee and  subgrantee proce-
dures will provide for a review of pro-
posed procurements to avoid purchase
of unnecessary or  duplicative items.
Consideration should be given to con-
solidating  or breaking out procure-
ments  to obtain a more economical
purchase. Where appropriate, an anal-
ysis will, be made of lease versus pur-
chase alternatives, and any other ap-
propriate analysis  to  determine  the
most economical approach.
  (5) To foster greater economy and
efficiency,  grantees and  subgrantees
are encouraged to enter into Sute and
local  intergovernmental  agreements
for  procurement or use  of common
goods and services.
  (6) Grantees and subgrantees are en-
couraged to use Federal excess and
surplus property in lieu of purchasing
new equipment and  property when-
                                   373

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 $ 31.36
         4V cm en. i
 ever such use is feasible and  reduces
 project costs.
  (7) Grantees and subgrantees are en-
 couraged  to  use  value  engineering
 clauses in contracts for construction
 projects of sufficient size to offer rea-
 sonable opportunities for cost reduc-
 tions. Value  engineering is a systemat-
 ic and  creative anaylsis of each con-
 tract item or task to ensure that its es-
 sential  function is provided  at  the
 overall lower cost.
  (8) Grantees and subgrantees  will
 make awards only to responsible con-
 tractors possessing the ability to per-
 form successfully under the terms and
 conditions of a proposed procurement.
 Consideration  will be given to such
 matters  as contractor inter-* ty. com-
 pliance with public policy,  iccord of
 past performance,  and  financial  and
 technical resources.
  (9) Grantees and subgrantees  will
 maintain records sufficient to detail
 the  significant  history of a procure-
 ment. These records will include, but
 are not necessarily limited to the fol-
 lowing:  rationale for  the method of
 procurement,  selection   of contract
 type, contractor selection or rejection,
 and the basis for the contract price.
  (10) Grantees  and subgrantees  will
 use time and material type contracts
 only-
  CD After a determination that  no
 other contract is suitable, and
  (ii) If the contract includes a ceiling
 price that the contractor exceeds at its
 own risk.
  (11) Grantees and subgrantees alone
 will be responsible, .in accordance with
 good  administrative   practice  and
 sound business judgment,  for the set-
 tlement of all contractual and admin-
 istrative issues arising out of procure-
 ments. These issues include, but are
 not limited to  source evaluation, pro-
 tests,  disputes,  and  claims.   These
standards do  not rrlieve the grantee or
subgramee of any contractual  respon-
sibilities under its  contracts. Federal
 agencies will  not substitute their judg-
ment for  thar.  of the grantee  or sub-
 grantee unless  the matter is primarily
 a Federal  concern.  Violations of law
 will be referred to the local. State, or
 Federal authority having proper juris-
 diction.
  (12)  Grantees and subgrantees  will
have protest procedures to handle and
resolve disputes relating to their pro-
curements and shall in all  instances
disclose  information  regarding  the
protest to the awarding agency. A pro-
testor  must exhaust all administrative
remedies  with the  grantee  and sub-
grantee before pursuing a protest with*
the  Federal agency. Reviews of pro-
tests by the  Federal  agency will be
limited to:  -
  (i) Violations of Federal law or regu-
lations and the standards of this sec-
tion (violations of  State  or  local law
will  be under  the jurisdiction of State
or local authorities) and
  (11) Violations of the  grantee's or
subgrantee's  protest  procedures for
fail  •• to review a complaint or  pro-
test. Protests  received by the Federal
agency other than those  specified
above  will be  referred to the grantee
or subgrantee.
^^Competition. (1) All procurement
transactions will be conducted  in  a
manner providing full and open com- .>
petition consistent with the standards-.,
of 5 31.36. Some of  the situations con-
sidered to be restrictive of competition
include but are not limited to:
  (i) Placing  unreasonable  require-
ments  on firms  in  order  for them to
qualify to do business.
  (*') Requiring  unnecessary experi-
ence and excessive bonding.
  (ill) Noncompetitive pricing practices
between firms or  between  affiliated
companies,
  (iv) Noncompetitive awards to con-
sultants that are on retainer contracts,
  (v) Organizational conflicts of inter-
est,                                  ;
  (vi) Specifying only a "brand name"
product instead of allowing "an equal"
product to  be offered and describing
the  performance of other relevant re-
quirements of the procurement, and
  (vii)  Any arbitrary action in the pro-
curement process.
  (2) Grantees and subgrantees  will
conduct  procurements in a manner
that prohibits the use of statutorily or
administratively imposed  in-State or
local geographical  preferences  in the
evaluation of  bids or proposals, except
in those cases where applicable  Feder-
al statutes expressly mandate  or en-
courage geographic preference. Noth-
                                    374

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    :<•-..<$*,
                                              T.AV

                                              '. '%
 Environmental Protection Agency

 ing in this section preempts State li-
 censing laws. When contracting for ar-
 chitectural  and  engineering  (A/E)
 services, geographic location may be a
 selection criteria provided its applica-
 tion leaves an appropriate number of
 qualified firms,.given the nature and
 size of the project, to compete for the
 contract.
   (3) Grantees will have written selec-
 tion  procedures  for   procurement
 transactions.  These   procedures  will
 ensure that all solicitations:
   (i) Incorporate a clear and accurate
 description of the technical require-
 ments  for  the material, product,  or
 service to be procured. Such descrip-
 tion shall not, in competitive procure-
 ments, contain features which unduly
 restrict competition. The description
 may include a st*t  -*nt  of the quali-
 tative nature of the material, product
 or service to be procured,  and when
 necessary, shall set forth those mini-
 mum  essential  characteristics  and
 standards to which it must conform if
 it is  to satisfy its intended use. De-
 tailed product specifications should be
 avoided if at all possible. When  it is
 impractical or uneconomical to make a
 clear and accurate description of the
 technical   requirements,   a . "brand
 name  or  equal" description  may be
 used as a means to define the perform-
 ance or other salient requirements of a
 procurement. The specific features  of
 the named brand  which must be met
 by offerers shall be clearly stated; and
  (ii) Identify all requirements which
the offerers must fulfill and all other
factors to be used in evaluating bids or
proposals.
  (4)  Grantees  and subgrantees  will
ensure  that all prequallfied lists  of
persona, firms, or products which are
used  in acquiring goods  and services
are current and include enough quali-
fied  sources to ensure maximum open
and  free  competition. Also, grantees
and  subgrantees will not  preclude po-
tential bidders from qualifying during
the solicitation period.
  (5)   Construction   grants   awarded
under Title II of the Clean Water Act
are  subject  to the  following "Buy
American"   requirements  in  para*
graphs (cXSXlMiii)  of  this section.
Section 215 of the Clean Water Act re-
quires that contractors give preference
                             §31.36
to the use of domestic material in the
construction of EPA-funded. treatment
works.  .
  (i) Contractors must  use domestic
construction materials in preference to
nondomestic material if  it is priced no
more than 6  percent higher than the
bid or offered price of the nondomes-
tic material, including ail costs of  de-
livery to the construction site and any
applicable duty,  whether  or  not  as-
sessed. The grantee will  normally base
the computations on prices and costs
in effect on the date of opening bids or
proposals. •
  (ii) The award official  may waive the
Buy American provision based on fac-
tors the award official  considers rele-
vant, including:
  (A) Such use is not in the public in-
terest;
  (B) The cost is unreasonable:
  (C) The Agency's available resources
are not sufficient to implement the
provision, subject to the  Deputy Ad-
ministrator's concurrence;
  (D) The  articles, materials  or sup-
plies of the class  or kind to be used or
the articles, materials or supplies from
which  they are manufactured are  not
mined, produced  or manufactured in
the  United  States in  sufficient and
reasonably available commerical quan-
tities or satisfactory quality  for the
particular project; or
  (E) Application of this provision is
contrary to multilateral  government
procurement  agreements,  subject to
the  Deputy  Administrator's  concur-
rence.
  (ill)  All  bidding documents,  suba-
greements. and,  if appropriate,  re-
quests for proposals must contain the
foDowing  "Buy American" provision:
In accordance with section 215 of the
Clean  Water Act (33 U.S.C.  1251 et
seq.) and Implementing EPA regula-
tions, the contractor agrees that pref-
erence will be given to domestic con-
struction materials by the contractor,
subcontractors, materialmen and sup-
pliers in the performance of this suba-
greement.
  (cU Methods of procurement to be fol-
lowed. (1) Procurement by small pur-
chase procedures. Small purchase pro-
cedures are those relatively simple and
informal procurement methods for se-
curing  services,  supplies,  or  other
                                    375

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§31*36

property that do not cost more than
125,000 in the aggregate. If small pur-
chase procurements are used, price or
rate quotations will be obtained from
ui   adequate .number   of .qualified
sources.
  (2) Procurement  by  sealed  bids
:formal advertising). Bids are publicly
solicited  and  a firm-fixed-price  con-
:ract (lump  sum or  unit price)  is
iwarded  to  the  responsible  bidder
whose  bid, conforming with  all the
Material  terms and conditions  of the
jwitation for bids, is the., lowest  in
arice. The sealed bid method  is the
^referred method for procuring  con-
struction,  if  the   conditions   in
131.36(d)(2)(i) apply.
  If sealed bids are  used; the fol-
owing requirements apply:
 (A) The Invitation for bids will  be
jublicly advertised and bids shall  be
iolicited from an  adequate number of
cnown suppliers, providing them suffi-
:ient time prior  to the  date set  for
ipening the bids:
 (B) The invitation for bids,  which
viO  include any specifications and per-
inent attachments,  shall  define the
terns or  services in order for the
lidder to  properly respond;  •
 (C) All  bids will be publicly opened
it the time and place prescribed in the
nvltation for bids;
 (D) A   firm  fixed-price  contract
iward wiU be made in writing  to the
owest  responsive  and  responsible
)idder. Where specified in bidding doc-
unents,  factors  such  as  discounts.
rauportation  cost,  and  life  cycle
osts shall be considered in determin-
ng  which bid is lowest. Payment dis-
:ounts will only be used to determine
he  low bid when prior experience  in-
licates that such discounts are usually
aken advantage of: and
         40 CFR Ch. I (7.1-48
  (E) Any or all bids may be rejected if
there is a sound documented reason.
  (3) Procurement by competitive pro-
posals. The technique of competitive
proposals is normally conducted with
more than one source submitting an
offer, and either a fixed-price or cost-
reimbursement type contract is award-
ed. It  is generally used when condi-
tions are not appropriate for the use
of sealed bids. If this method is used.
the following requirements apply:
  (i) Requests  for proposals  will be
publicized and identify all evaluation
factors and their relative importance.
Any response to  publicized requests
for proposals shall be honored to the
maximum extent practical;
  (ii) Proposals will be solicited from
an  adequate number  of qualified
sources;
  (iii) Grantees  and subgrantees will
have a method for conducting techni-
cal evaluations  of the proposals re-
ceived and for selecting awardees;
  (iv) Awards will  be made to the re-
sponsible 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 services whereby competi-
tors' qualifications are  evaluated and
the most qualified competitor is select-
ed. subject to negotiation  of fair and
reasonable    compensation.     The
method, where price is not used as a
selection factor, can only  be used in
procurement of A/E professional serv-
ices. 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 so-
licitation of a proposal from only one
source,   or after  solicitation  of  a
number  of sources, competition is de-
termined inadequate.
  (I) Procurement by noncompetitive
proposals may be  used only when the
award of a contract is infeasible under
small purchase procedures, sealed bids
or  competitive proposals  and one of
the following circumstances applies:
  (A) The item is available only from a
single source:
                                   376

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 Environmental Protection Agency

   (B) The public exigency or emergen-
 cy for the requirement will not permit
 a delay resulting from competitive .so-
 licitation.
   (C) The awarding agency authorizes
 noncompetitive proposals; or
   (D) After solicitation of a number of
 sources, competition is determined in-
 adequate.
   (ii) Cost analysis., i.e., verifying the
 proposed  cost data, the projections of
 the data, and the  evaluation of the
 specific elements of costs  and profit, is
 required.
   (iii) Grantees and subgrantees may
 be required to submit the  proposed
 procurement to the awarding agency
 for  pre-award review  in accordance
 with paragraph (g) of this section.
  4£^ Contracting wit*. ..nail and mi-
 nority firms, women's  business enter'
 prise and labor surplus area firms. (1)
 The grantee and subgrantee will take
 ail  necessary  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 mi-
 nority  businesses and  women's, busi-
ness enterprises on solicitation lists;
  (ii) Assuring that small and minority
businesses, and women's  business en-
terprises  are solicited whenever they
are potential sources:
  (iii)  Dividing  total requirements,
when  economically   feasible,  into
smaiier tasks  or quantities to permit
maximum participation by small and
minority  business,  and women's busi-
ness enterprises;
  (iv) Establishing  delivery schedules.
where the requirement permits, which
encourage participation by small and
minority  business,  and women's busi-
ness enterprises;
  (v) Using the services and assistance
of the Small Business Administration.
and the   Minority  Business Develop-
ment 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  para-
graphs (e)(2)  (1) through (v)  of this
section.
  (fl Contract  cost  and, price.  (1)
Grantees  and  subgrantees must  per-
 form a cost or price analysis in connec-
tion with every procurement action in-
cluding contract modifications. The
method and degree of analysis is de-
pendent on the facts surrounding the
particular procurement situation, but
as  a  starting  point,  grantees  must
make independent estimates before re-
ceiving bids or proposals. A cost analy-
sis  must be performed when the of-
feror  is required to submit the ele-
ments of his estimated cost, e.g.. under
professional, consulting, and architec-
tural  engineering services contracts. A
cost analysis will be necessary  when
adequate price competition  is lacking.
and for sole source procurements, in-
cluding  contract  modifications   or
change orders, unless price  resonable-
ness can be established on the basis of
a catalog or market price of a commer-
cial product sold in substantial quanti-
ties to the general public or based on
prices set by law or regulation. A price
analysis will be used in all other in-
stances to determine the reasonable-
ness of the proposed contract price.
  (2)  Grantees and  subgrantees will
negotiate profit as a separate element
of the price for each contract in which
there is no price competition and in all
cases  where cost analysis is performed.
To  establish  a fair  and  reasonable
profit, consideration will be given  to
the complexity of the work to be per-
formed, the risk borne  by the contrac-
tor, the contractor's investment, the
amount of subcontracting, the quality
of its record of past performance, and
industry profit rates in the surround-
ing geographical area for similar work.
  (3)  Costa or  prices based on estimat-
ed costs for contracts under grants will
be allowable only to the  extent that
costs  Incurred or cost estimates includ-
ed In negotiated prices are consistent
with   Federal cost  principles  (see
) 31.22). 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.
  (gl Awarding  agency  review.   (1)
Grantees  and subgrantees must make
available, upon request of the award-
ing agency, technical specifications on
proposed  procurements  where  the
awarding  agency believes such review
                                    377

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                                               40 CFR Ch. I (7-1-88 Edition)
 is needed to ensure that the item and/
 or service specified is the one being
 proposed  lor  purchase.  This review
 generally will  take place prior to the
 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 usual-
 ly limited to the technical aspects of
 the proposed purchase.
  (2) Grantees and  subgrantees  must
 on request make available for award-
 ing  agency pre-award review C delete
 "."3 procurement documents, such as
 requests for proposals or invitations
 for  bids, independent cost estimates.
 etc.. when:
  (i) A grantee's or subgrantee's- pro-
 curement procedures or operation fails
 to   comply  with  the  procurement
 standards in this seciton: or
  (ii) The procurement is  expected to
 exceed $25,000 and  is to  be  awarded
 without competition or only one bid or
 offer is received in response to a solici-
 tation; or
  (iii) The procurement, which is ex-
 pected  to  exceed $25.000, specifies a
 "brand name" product; or
  (iv) The proposed award over $25.000
 is to be awarded to other than the ap-
 parent  low bidder under a sealed bid
 procurement; or
  (v) A proposed contract modification
 changes the scope of a contract or in-
 creases the contract amount  by more
 than $25,000.
  (3) A grantee or subgrantee will be
 exempt from the pre-award review in
 paragraph (gX2) 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 re-
 quest 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  re-
 views shall occur where there is a con-
 tinuous high-dollar funding, and third-
.party contracts are awarded on a regu-
 lar basis;
  (ii) A grantee or  subgrantee may
 self-certify  its procurement system.
 Such self-certification shall not limit
the awarding agency's right to survey
the system. Under a  self-certification
procedure,  awarding  agencies  may
wish  to  rely  on written  assurances
from the grantee or subgrantee that it
is complying with these standards. A
grantee or subgrantee will cite specific
procedures,   regulations,   standards,
etc., as being in compliance with these.
requirements  and  have  its  system
available for review.
 jhj  Bonding requirements. For con-
struction or facility improvement con-
tracts  or  subconstracts  exceeding
$100,000,  the  awarding  agency may
accept the bonding policy and require-
ments of the grantee or subgrantee
provided  the  awarding  agency  has
made a determination that the award-
Ing agency's interest is adequately pro-
tected. If such  a determination has
not been made, the minimum .require-
ments shall be as follows:
  (DA bid guarantee from each bidder
equivalent to five percent of the  bid
price. The "bid  guarantee" shall con-;
sist of a firm commitment such as a
bid bond, certified check, or other ne-
gotiable  instrument  accompanying a
bid as assurance that the bidder will.
upon  acceptance of  his  bid.  execute
such contractual documents as may be
required within the time specified.
  (2) A performance bond on  the part.
of the contractor for 100 percent of the
contract  price. A "performance bond"
is one executed in connection with a
contract  to secure  fulfillment of all
the  contractor's  obligations under
such contract.  .
  (3) A payment bond on the part of
the contractor for 100 percent of the'.
contract  price. A "payment  bond" is
one executed In connection with a con-
tract to assure payment as required by
law of all persons supplying labor and
material  in  the execution of the work
provided for in the contract.
  m Contract provisions. A  grantee's
and subgrantee's contracts must con-
tain provisions in paragraph (i) of this
section. Federal  agencies are permit-
ted  to  require changes,  remedies.
changed  conditions, access and records
retention,  suspension of  work,   and
other clauses  approved by the Office
of Procurement Policy.
  (1)  Administrative, contractual,  or
legal  remedies in instances where con-
                                    378

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                ..    . .    -
 environmental Protection Ag«"«Y

 tractors  violate or  breach contract
 terms, and provide for such sanctions
 and penalties as may be appropriate.
 (Contracts other  than  small  pur-
 chases)
   (2) Termination  for cause and lyr
 convenience by the  grantee  or.sfb-
 grantee   including  the  manner  by
 which it will be effected and the basis
 for settlement. (All contracts in excess
 of $10.000)
   (3)  Compliance   with   Executive
 Order 11246 of September 24. 1965 en-
 titled "Equal Employment  Opportuni-
 ty." as amended .by  Executive Order
 11375 of October 13,  1967 and as sup-
 plemented  in  Department of Labor
 regulations (41 CFR Chapter 60). (All
 construction  contracts  awarded  in
 excess of $10,000 by grantees and their
 contractors or subgrantees)
  (4) Compliance  v th the Copeland
 "Anti-Kickback" Act (18 U.a.C. 874) as
 supplemented in Department of Labor
 regulations (29 CFR Part 3). (All con-
 tracts and subgrants for construction
 or repair)
  (5) Compliance  with  the  Davis-
 Bacon Act (40 U.S.C. 276a  to a-7) as
 supplemented by Department of Labor
 regulations (29 CFR Pan 5).  (Con*
 struction contracts in excess of $2.000
 awarded by grantees and subgrantees
 when required by Federal grant pro*
 gram legislation)
  (6) Compliance with sections 103 and
 107 of the Contract Work Hours and
Safety Standards Act (40 U.S.C. 327-
330) as supplemented by Department
of Labor regulations (29 CFR Part 5).
(Construction contracts  awarded  by
grantees and subgrantees in excess of
$2,000, and in  excess of  $2,500 for
other contracts which involve the em-
ployment of mechanics or laborers)
  (7) Notice of awarding  agency re-
quirements and regulations  pertaining
 to reporting.
  (8) Notice of awarding  agency  re-
quirements and regulations  pertaining
to patent  rights with respect to any
discovery  or invention which arises or
is  developed in the course of or under
such contract.
  (9)  Awarding agency requirements
and  regulations pertaining to  copy-
 rights and rights in data.
  (10) Access by the grantee, the sub-
grantee, the Federal grantor agency,
the  Comptroller  General  of  the
United States, or any of their duly au-
thorized representatives to any  books,
documents, papers, and records  of the
contractor  which are  directly  perti-
n-->nt to that specific contract for the
purpose of making audit, examination.
excerpts, and transcriptions.
  (11)   Retention   of   all   required
records for three years after grantees
or subgrantees make final  payments
and  all other pending  matters are
closed.
  (12) Compliance with all applicable
standards,  orders,  or  requirements
issued  under section 306 of  the Clear
Air Act (42 U.S.C. 1857(h)). section 508
oi the  Clean Water Act (33  U.S.C.
1368). Executive Order 11738, and En-
vironmental Protection Agency regula-
tions  (40  CFR Part 15). (Contracts,
subcontracts,   and    subgrants   of
amounts in excess of $100,000)
  (13) Mandatory standards and poli-
cies  relating to  energy   efficiency
which  are  contained   in  the  state
energy  conservation plan   issued in
compliance  with the  Energy  Policy
and Conservation Act (Pub. L. 94-163).
  (|| Payment to consultants. (1) EPA
wuTlimit its participation in the salary
rate (excluding overhead) paid to indi-
vidual  consultants retained  by  grant-
ees or by a grantee's  contractors or
subcontractors to the maximum daily
rate for a GS-18. (Grantees may. how-
ever, pay consultants more  than this
amount). This limitation  applies to
consultation services of designated in-
dividuals with specialized  skills  who
are paid at a daily or hourly rate. This
rate  does not include transportation
and subsistence costs  for travel per-
formed; grantees will pay these in ac-
cordance with their normal trave1 re-
imbursement  practices. (Pub.  L.  99-
591).
  (2)  Subagreements with  firms  for
services which are awarded using  the
procurement requirements in this part
are not affected by this limitation.
  (k> Use of the same architect or engi-
neer during construction.  (1)  If  the
grantee is satisfied with the qualifica-
tions and performance  of the architect
or engineer who provided any or all of
the facilities planning or design serv-
ices for a waste-water treatment works
project and  wishes to retain that firm
                                   379

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 $31.3?
         40 CFR Ch. I (7-1-38 Edition)
 or individual during construction of
 the project, it may do so without fur-
 ther  public notice and  evaluation of
 qualifications, provided:
   (i) The grantee received a facilities
 planning (Step  1)  or  design  grant
 (Step 2). and  selected the architect or
 engineer in   accordance  with EPA's
 procurement  regulations  in  effect
 when EPA awarded the grant; or
   (ii) The award official approves non-
 competitive    procurement   under
 $31.36(d)<4)  for  reasons other  than
 simply  using  the same  individual or
 firm that provided facilities planning
 or design services for the project; or
   (ill) The grantee attests that:
   (A) The initial request for proposals
 clearly  stated the possibility that the
 firm  or individual selected  could be
 awarded a subagreement for services
 during construction; and
   (B) The firm or individual .was se-
 lected for facilities planning or design
 services in accordance with procedures
 specified in this section.
  (C) No employee, officer or agent of
 the grantee, any member of their im-
 mediate families, or  their partners
 have financial or other interest in the
 firm selected for award; and
  (D) None of the grantee's officers.
 employees or agents solicited or ac-
 cepted  gratuities, favors  or anything
 of monetary value from contractors or
 other parties to subagreements.
  (2) However, if the grantee uses the
 procedures in  paragraph (kXl) of this
section  to retain  an architect or  engi-
neer,  any Step 3 subagreements be-
tween the architect or .engineer and
the grantee must meet all of the other
procurement provisions in 9 31.36.

 C53 PR 8068 and 8087. Mar. 11. 1988. and
 amended at $3 PR 8075. Mar. 11.1988]
  Erracnvc DATT NOTE At S3 PR 8075, Mar.
 11. 19B&. 131.36 (CMS), (J)  and (k) were
 added, effective  October 1.1988.

 9 31.37  SubrranU.
  (a) States. States shall follow  state
 law  and  procedures  when  awarding
and administering subgrants (whether
 on a cost  reimbursement  or   fixed
 amount  basis) of financial  assistance
 to  local  and  Indian  tribal govern-
ments. States shall:
  (1)  Ensure that every  subgrant in-
 cludes any clauses required by Federal
 statute and executive orders and their
 implementing regulations:
  (2)  Ensure  that subgrantees  are
 aware of requirements imposed upon
•them  by Federal statute and  regula-
 tion:
  (3) Ensure that a provision for com-
 pliance with § 31.42 is placed in every
 cost reimbursement subgrant: and
  (4) Conform any advances of grant
 funds  to subgrantees substantially to
 the same standards  of timing  and
 amount that apply to cash advances
 by Federal agencies.
  (b)  All  other  grantees.  All. .other
 grantees shall follow the provisions of
 this  part which  are applicable to
 awarding agencies when awarding and ?
 administering subgrants (whether on a
 cost reimbursement or fixed amount
 basis)  of financial assistance to local
 and Indian tribal governments. Grant-
 ees shall:
  (1) Ensure that every subgrant in-
 cludes a provision for compliance with :
 this part:
  (2) Ensure that every subgrant in-
 cludes any clauses required by Federal
 statute and executive orders and their
 implementing regulations; and
  (3)  Ensure  that subgrantees  are
 aware of requirements imposed upon
 them by Federal statutes and regula-
 tions.
  (c) Exceptions. By their own terms,
 certain provisions of this part do not
 apply to the award and administration
 of subgrants:
  (1) Section 31.10:
  (2) Section 31.11;
  (3) The letter-of-credit procedures
 specified in  Treasury Regulations at
 31  CFR Part 205, cited in 8 31.21; and
  <4) Section 31.50.

  REPORTS, RECORDS. RETENTION, AND
             ENFORCEMENT

 931.40  Monitoring and reporting program
    performance.
  (a) Monitoring by grantees. Grantees
 are responsible for managing the  day-
 to-day operations of  grant and  sub-
 grant  supported activities. Grantees
 must monitor grant and subgrant sup-
 ported activities to assure compliance
 with applicable  Federal requirements
 and that performance goals are being
 achieved.  Grantee monitoring must
                                    380

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 ....*irwi.Mi»moi
                         Agency
 cover each program, function or activi-
 ty.
   (b) Nonconatruction performance re-
 portal 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 termi-
 nation of grant support. Unless waived
 by the Federal agency this report will
 be due on the same date as the final
 Financial Status Report.
   (1)  Grantees shall  submit  annual
 performance reports unless the award-
 ing agency requires quarterly or semi-
 annual reports. However, performance
 reports will not be required  more fre-
 quently  than  quarterly. Annual  re-
 ports shall be due 90 days  after the
 grant  year, quarterly  or semi-annual
 reports shall be due 30 days after the
 reporting period.  The  final perform-
 ance report will be due 90 days after
 the expiration or termination of grant
 support. If a  justified request  is sub*
 mitted  by  a  grantee,  the Federal
 agency may extend the due date for
 any performance report. Additionally,
 requirements .for  unnecessary  per-
 formance reports may  be waived  by
 the Federal agency.
  (2) Performance reports will contain,
 for each  grant, brief information  on
 the following:
  (i) A comparison of  actual  accom-
 plishments  to  the objectives   estab-
 lished  for  the  period.  Where  the
 output of the  project can be quanti-
 fied, a computation of the cost  per
 unit of output may be required if that
 information will be useful.
  (U) The reasons for slippage if estab-
lished objectives were not met.
  (iii)  Additional  pertinent  informa-
 tion including, when appropriate, anal-
ysis 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
standards in this section in prescribing
performance reporting  requirements
for subgrantees.
  (c)  Construction  performance   re-
ports. For the most part, on-site tech-
nical inspections and certified percent-
         X                  §31.41
          .•\
age-ol-completion  data  are  relied on
heavily by  Federal agencies to monitor
progress under construction grants
and subgrants.  The  Federal  agency
will require additional formal perform-
ance  reports  only when considered
necessary,  and never more frequently
than quarterly.
  (d) Significant developments. Events
may occur  between the scheduled per-
formance reporting dates which have
significant  impact  upon the grant or
subgrant supported activity. In such
cases,  the  grantee must inform the
Federal agency as  soon as the follow-
ing types of conditions become known:
  (1) Problems, delays, or adverse con-
ditions  which will materially impair
the ability  to meet the objective of the
award. This disclosure must include a
statement of the action taken, or con-
templated,  and any assistance needed
to resolve the situation.
  (2)  Favorable  developments which
enable meeting time schedules and ob-
jectives sooner or at less cost than an-
ticipated or producing more  beneficial
results than originally planned.
  (e) Federal agencies may  make site
visits  as warranted by-program needs.
  (f) Waivers,  extensions. (1)  Federal
agencies me.y  waive any performance
report required  by this  part if not
needed.
  (2) The grantee may waive any per-
formance report from  a subgrantee
when not  needed. The  grantee  may
extend the due date for any perform-
ance report from a subgrantee if the
grantee will still be able to meet its
performance reporting  obligations to
the Federal agency.

931.41  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
Federal agencies, or
  (11)  Requesting  advances  or  reim-
bursements when letters of  credit are
not used.
                                   381

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 3 * i .<>• i

  (2)  Grantees  need not  apply the
 forms prescribed  in this  section  in
 dealing with their subgrantees. How-
 ever,  grantees shall  not impose more
 burdensome requirements on subgran-
 tees.
  (3)  Grantees shall follow  all applica-
 ble standard and supplemental Feder-
 al  agency instructions  approved by
 OMB to the extend required under the
 Paperwork Reduction Act of 1980 for
 use in connection with forms specified
 in paragraphs (b)  through (e) of this
 section. Federal  agencies  may issue
 substantive   supplementary  instruc-
 tions  only with the approval of OMB.
 Federal agencies may shade out or in*
 struct the grantee to  disregard any
 line item that  the Federal agency
 finds  unnecessary for its decisionmak-
 ing purposes.
  (4) Grantees will not  be required  to
 submit more than the original and two
 copies of forms required  under this
 part.
  (5)  Federal agencies  may provide
 computer outputs to  grantees to expe-
dite or contribute to the accuracy  of
reporting.   Federal   agencies   may
accept the required information from
grantees in machine  usable format  or
computer  printouts  instead of  pre-
scribed 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
grantee.
  (b)  Financial  Status  Report—(I)
Form.  Grantees  will   use Standard
Form 269 or 269A,  Financial  Status
Report, to report the status.of funds
 for all nonconstruction  grants and for
 construction  grants when required  in
accordance with 131.41   Federal  Cash    Transactions
Rcport-41) Form, (i) For grants paid
by letter or credit. Treasury  check ad-
vances or electronic transfer of funds.
the grantee will submit the Standard
Form 272, Federal Cash  Transactions
Report, and when necessary, its con-
tinuation  sheet. Standard Form  272a,
unless the terms of the award exempt
the grantee from this requirement.
  (ii) These reports will be used by the
Federal agency to monitor cash ad-
vanced to grantees and to obtain dis-
bursement or outlay information for
each grant from grantees. The format
of the report may be adapted as ap-
propriate when reporting is to be ac-
complished  with  the assistance of
automatic data processing equipment
provided that the information  to be
submitted is not changed in substance.
  (2) Forecasts of Federal cash require-
ments. Forecasts of  Federal cash re-
quirements may  be required in the
"Remarks" section of the report.
  (3)  Cash in hands of subgrantees.
When considered necessary  and  feasi-
ble by the Federal  agency, grantees
may be required to report the amount
of cash  advances  in excess of  three
days' needs in the hands of their sub-
grantees or contractors and  to provide
short narrative explanations of actions
taken  by the  grantee to reduce the
excess balances.
  (4) Frequency and due date. Grant-
ees must submit the report no later
than 15  working  days following the
                                   382

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 Environmental Protection Agency

 end of each quarter. However, where
 an advance either by letter of credit or
 electronic transfer of funds is author-
 ized at an annuallzed rate of one  mil-
 lion  dollars  or  more,   the  Federal
 agency may require the  report to be
 submitted within  15 working days fol-.
 lowing the end of each month.
   (d)  Request  for advance  or reim-
 bursement—(1) Advance payments. Re-
 quests for Treasury  check advance
 payments will be submitted on Stand-
 ard Form 270. Request for Advance or
 Reimbursement. (This  form will  not
 be used for drawdowns under a letter
 of credit, electronic funds transfer or
 when  Treasury' check advance  pay-
 ments are made to the grantee auto-
 matically on a predetermined basis.)
  (2) Reimbursements. Requests for re-
 imbursement  under  nonconstruction
 grants will also be submitted on Stand-
 ard Form 270. (For reimbursement re-
 quests under construction grants, see
 paragraph (e)(l) of this section.)
  (3)  The frequency  for submitting
 payment  .requests  is   treated   In
 § 31.41(b)(3).
  (e) Outlay report and request for re-
 imbursement  for  construction , pro-
 grams. (1) Grants that  support con-
 struction  activities paid by reimburse-
 ment method.
  (i)   Requests  for  reimbursement
 under  construction grants will be sub-
 mitted on Standard Form 271. Outlay
 Report and Request for Reimburse-
 ment for Construction Programs. Fed-
 eral agencies may, however,  prescribe
 the Request for  Advance  or Reim-
 bursement   form,   specified    in
 § 31.41(d). instead of this form.
  (ii) The frequency for submitting re-
 imbursement  requests  la treated In
 § 31.41(bK3).
  (2) Grants that support  construction
 activities paid by  letter of credit, elec-
 tronic  funds  transfer  or  Treasury
 check  advance,  (1) When a  construc-
 tion grant is paid by letter of credit,
 electronic funds transfer  or  Treasury
check  advances,   the  grantee   will
 report  its  outlays to  the  Federal
 agency using  Standard  Form   271.
 Outlay Report  and Request for Reim-
 bursement for Construction Programs.
The Federal agency will  provide  any
 necessary special  Instruction. Howev-
           f                §31.4

er.  frequency  and due date shall t
governed by S 31.41(b) (3) and (4).
  (11)  When a construction grant
paid  by  Treasury  check  advanci
based on  periodic requests  from tr
grantee, the advances will be reques
ed on the form specified in § 31.41(d
  (ill) The Federal agency may subst
tute the Financial Status Report spe
ified  in  f 31.41(b)  for  the  Outla
Report and Request for  Reimburs-
ment for Construction Programs.
  (3) Accounting basis. The accountir
basis  for the Outlay Report and Pi-
quest for  Reimbursement  for  Coi
struction Programs shall be governe
by |31.41(bX2).

§ 31.42  Retention and access requiremcn
    for records.
  (a) Applicability. (1) This section ai
plies to all financial and prograznmat:
records, supporting documents, stall
tical  records,  and  other records c
grantees or subgrantees which are:
  (1) Required  to be maintained by th
terms of this Part, program reguli
tions or the grant agreement, or
  (ill Otherwise reasonably considere
as pertinent to program regulations c
the grant agreement.
  (2) This  section does not apply i
records maintained by contractors c
subcontractors. For a requirement t
place a provision concerning  records i
certain   kinds   of   contracts,   se
§ 31.36(1X10).
  (b)  Length of retention period. C
Except as otherwise provided, recorc
must be retained for three years frot
the starting date specified in  par
graph (c) of this section.
  (2) If any litigation, claim, negoti
tion, audit or other action involvii
the records has  been started  befo:
the expiration of the 3-year perio
the records must  be  retained uni
completion of the action and resol
tion of all  issues which arise from
or until the end of the regular 3-ye
period, whichever is later.
  (3)  To avoid duplicate  recordfcee
ing, awarding agencies may  make sp
cial arrangements with grantees ai
subgrantees  to  retain  any  recor
which are  continuously  needed  f
joint use. The awarding agency will i
quest transfer of records to Its custo<
                                   383

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 §31.43
         40 Ctt Ch. I (7-1-88 Edition;
 when  it determines that the records
 possess  long-term  retention  value.
 When the records are  transferred to
 or maintained by  the Federal agency,
 the  3-year retention requirement is
 not  applicable  to  the grantee or sub-
 grantee.
  (c)  Starting  date  of   retention
 period—<1) General When grant sup-
 port is continued or renewed at annual
 or other intervals, the retention period
 for the records of each funding period
 starts on the day the grantee or sub-
 grantee  submits   to  the   awarding
 agency its single  or last expenditure
 report  for that period.  However, if
 grant support is continued or renewed
 quarterly,  the  retention period  for
 each year's records starts on the day
 the  grantee  submits its  expenditure
 report for  the last quarter of the Fed-
 eral fiscal year.  In all other cases,  the
 retention period starts on the day  the
 grantee submits its final expenditure
 report.  If  an expenditure report has
 been waived,  the retention  period
starts  on  the day the report would
have been due.
  (2) Real property  and equipment
 records. The  retention period for real
property and equipment records starts
from the date of the disposition or re-
placement  or transfer at the direction
of the awarding agency.
  (3) Records for income  transactions
after grant or  subgrant  support  In
some  cases  grantees  must  report
income  after the period of grant sup-
port. Where  there is such a require-
ment,  the retention  period for  the
records pertaining to the earning of
the income starts from the end of the
grantee's  fiscal year  in which  the
income is earned.
  (4) Indirect cost rate proposals, cost
 allocations plans,  etc. This paragraph
applies to the following types of docu-
ments, and their  supporting records:
indirect cost rate computations or pro-
posals, cost allocation plans, and any
similar  accounting  computations  of
 the rate at which a particular group of
costs is chargeable (such  as computer
 usage chargeback rates or  composite
 fringe benefit rates).
  (1) If submitted for negotiation. If
 the proposal, plan, or other  computa-
 tion is required to be submitted to the
 Federal Government 
-------
                rrotcctioit Afl«n<3Xi) was added, effec-
 tive October 1.1988.

 §31.44  Termination for convenience.
  Except as provided in 5 31.43 awards
 may be terminated in whole or in part
/only as follows:
  (a) By the awarding agency  with the
 consent of the grantee or subgrantee
 in  which  case the  two parties shall
 agree   upon  the termination  condi-
 tions,  including the effective date and
 in the case of partial termination, the
 portion to be terminated, or
  (b)  By the  grantee  or *   -intee
 upon   written   notification  to  the
 awarding  agency, setting  forth  the
 reasons for such termination, the ef-
 fective date, and in  the case of partial
 termination, the portion to be termi-
 nated. However, if,  in the case of a
 partial  termination,  the  awarding
 agency determines that the remaining
 portion of the award will not accom-
 plish  the  purposes for  which  the
 award was made, the awarding agency
 may terminate the award in its entire-
 ty  under either  5 31.43* or paragraph
 (a) of this section.

 931.45  Quality assurance.
  If the grantee's project involves en-
 vironmentally related  measurements
 or  data generation, the grantee shall
 develop and implement quality assur-
 ance practices consisting of  policies.
 procedures, specifications,  standards,
 and   documentation  sufficient  to
 produce data of quality adequate to
 meet project  objectives and  to mini-
 mize loss of data due to out-of-control
 conditions or malfunctions.
 [53 FR 8076. Mar. 11. 1988]
  ErfEtiiVE DATE NOTE At S3 FR 8076. Mar.
 11.  1988, i 31.45 was added, effective Octo-
 ber 1.1988.

     Subporf D—Aftef-Tht-Grant
            Requirements

 §31.50  Cioseout
  (a) General The Federal agency will
 close  out  the award when it deter-
 mines that all applicable administra-
                                    ooe

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 §31.51
         40 CFR Ch. I (7-1-88 Edition)
 tive actions and all required  work of
 the grant has been completed.
  (b) Reports. Within 90 days after the
 expiration or termination of the grant,
 the grantee must submit all financial.
 performance,  and other reports re-
 quired  as a condition of the  grant.
 Upon request by the grantee. Federal
 agencies may extend this timeframe.
 These may include but are not limited
 to:
  (1)  Final performance or  progress
 report
  (2) Financial Status Report  (SF 269)
 or Outlay Report and Request for Re-
 imbursement  for Construction Pro-
 grams ISF-271) {as applicable.)
  (3) Final request for payment 
litigation or the filing of any form of. ^x
appeal.                             -  -\

  Subpart E—Entitlement [Reserved]

        Subpart F—Ditputes  :

  SOURCE 53 PR 8076. Mar. 11. 1988. unless
otherwise noted.                        f
  Emcnvs DATK NOTE At 53 PR 8076. Mar.
11. 1988. Subpart P was added, effective Oc-
tober 1.1988.

S 31.70  Disputes.
  (a)  Disagreements should  be re-   I:
solved at the lowest level possible.
  (b)  If  an  agreement  cannot  be
reached, the EPA disputes decision of-
ficial will provide a written final  deci-
sion. The EPA disputes  decision offi-
cial is the individual designated by the
award official to resolve disputes con-
cerning assistance agreements.
  (c)  The disputes decision official's
decision will constitute  final agency
action unless  a request  for review  is
filed by registered mail, return receipt
requested, within 30 calendar days of
the date of the decision.
  (D For final decisions issued by an
EPA disputes decision official at Head-
quarters, the request for review  shall
                                    386

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 fnvironmentol Protection Agency

 be filed with the Assistant Administra-
 tor responsible for the assistance pro-
   (2) For final decisions issued by a
 Regional disputes decision official, the
 request for review shall be filed with
 the Regional Administrator. If the Re-
 gional  Administrator issued  the final
 decision, the  request  for reconsider-
 ation shall be filed with the Regional
 Administrator.
   (d) The request shall include:
   (DA copy of the EPA disputes deci-
 sion official's final decision;
   (2) A statement of  the amount in
 dispute:
.   o> A description  of the issues  In-
 volved; and
   (4) A concise statement of the objec-
 tions to the final decision.
  (•») The  disputant^ may be  repie-
 sented by counsel and may submit doc-
 umentary  evidence and  briefs for  in-
 clusion In a written record.
  (f) Disputants are  entitled to  an  in-
 formal conference with EPA officials.
  (g) Disputants are entitled to a writ-
ten decision from the appropriate Re-
gional or Assistant Administrator.
  (h) A decision  by the Assistant Ad-
ministrator to confirm the final deci-
sion of a Headquarters disputes deci-
sion official will constitute the final
Agency action.
  (1) A  decision by the Regional Ad-
ministrator to confirm the  Regional
disputes decision official's decision will
constitute  the final Agency action.
However, a petition  for discretionary
review by the Assistant Administrator
responsible for the assistance program
may be filed within  30 calendar days
of the Regional  Administrator's deci-
sion. The petition shall be sent to the
Assistant Administrator  by registered
mail, return  receipt*  requested, and
shall include:
  (DA  copy of the Regional Adminis-
trator's decision; and
  (2) A concise statement of the objec-
tions to the decision.
  (j) If the Assistant Administrator de-
cides not to review the  Regional Ad-
ministrator's  decision,  the  Assistant
Administrator    will    advise    the
disputant(s) in writing that  the Re-
gional   Administrator's  decision  re-
mains the final Agency action.
              ;       Port 31, App. A

  (k) If the  Assistant Administrator
decides to review the Regional* Admin-
istrator's decision, the review will gen-
erally be limited to the written  record
on which the Regional Administrator's
decision was based. The Assistant Ad-
ministrator may allow the disputant(s)
to submit briefs in support of the peti-
tion for review and may provide an op-
portunity for an informal conference
in order to clarify technical or legal
issues.  Alter  reviewing  the Regional
Administrator's decision,  the Assistant
Administrator will issue a written deci-
sion which will then become  the final
Agency action.
  (1) Reviews may not be requested of:
  (1) Decisions on requests for  excep-
tions under § 31.6;
  (2) Bid  protest  decisions  under
5 31.36(b)(12);
  (3) National Environmental  Policy
Act decisions uncfer Part 6:
  (4) Advanced  wastewater treatment
decisions of the Administrator; and
  (5) Policy  decisions  of the  EPA
Audit Resolution Board.

APPENDIX A—PART  31 AUDIT REQUIRE-
   MENTS POR STATE AND LOCAL GOV-
   ERNMENT RECIPIENTS
     EXECUTIVE OFFICE OP THE
             PRESIDENT

    Office of Management and Budget

           Circular No. A-128

April 12.1985

To  the  Heads of Executive Departments
   and Establishments.
Subject: Audits of State and Local Govern-
   ments.
  1. Purpose. This Circular is issued pursu-
ant to the Single Audit Act of 1984. Pub. L.
98-502. It establishes audit requirements for
State  and local governments  that  receive
Federal aid. and definu Federal responsibil-
ities for Implementing and monitoring those
requirements.
  2. Supersession. The  Circular supersedes
Attachment  P, "Audit Requirements." of
Circular A-102. "Uniform requirements for
grants to State and local governments."
  3. Background.  The Single Audit Act
builds upon earlier efforts to improve audits
of.Federal aid programs.  The Act requires
State  or local governments  that  receive
* 100.000 or more a year in Federal funds to
have an audit made for that year. Section
                                     387

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 Port 31, App. A
          40 C« Ch. I (7-1-88 Edition)
 7805 of the Act requires the Director of the
 Office of Management and Budget  to pre-
 scribe policies, procedures and guidelines to
 implement the Act. It specifies that  the Di-
 rector shall designate "cognizant" Federal
 agencies, determine criteria for making ap-
 propriate charges to  Federal programs for
 the cost of audits, and provide procedures to
 assure that small firms or firms owned and
 controlled  by  dlsadvantaged  individuals
 have the opportunity to participate  in con-
 tracts for single audits.
  4. Policy- The  Single Audit Act requires
 the following:
  a. State or local governments that receive
 $100,000 or more a year in Federal financial
 assistance shall have an audit made In ac-
 cordance with this Circular.
 . b. State or local governments that receive
 between $25.000  and  $100.000 a year shall
 have an audit made in accordance with this
 Circular, or in accordance with Federal laws
 and regulations  governing the   -"grams
 they participate In.
  c. State or local governments that  receive
 leas than $25,000 a year shall be exempt
 from compliance with  the  Act and other
 Federal  audit  requirements.  These State
 and local governments shall be governed by
 audit requirements prescribed  by  State or
 local law or regulation.
  d. Nothing in this paragraph  exempts
State or local governments  from maintain-
 ing records of Federal  financial assistance
 or from providing access to such records to
 Federal agencies, as provided for In Federal
 law or in Circular A-102. "Uniform require-
 ments for grants to State or local govern-
 ments."
  5. Definitions.  For  the purposes of this
 Circular the following definitions from  the
Single Audit Act apply:
  a. "Cognizant agency" means the Federal
agency assigned by the Office of  Manage-
ment and Budget to carry out the responsi-
bilities described In paragraph 11 of this
Circular.
  b. "Federal financial •stlstsnc*'* means as-
sistance provided by a Federal agency in the
 form of grants, contracts, cooperative agree-
 ment*, loans, loan guarantees/ property. In-
 terest subsidies. Insurance, or direct appro-
 priations, but does not include direct Feder-
 al cash assistance to Individuals. It Includes
 awards received directly from Federal agen-
 cies, or  indirectly through  other units of
 State and local governments.
  c. "Federal agency" has the same meaning
 as  the term "agency" in section 551(1) of
 Title 5. United States Code.
  d. "Generally accepted accounting princi-
 ples" has the meaning specified in the gen-
 erally accepted government auditing stand-
 ards.
  e. "Generally accepted government audit-
 ing standards" means  the Standards for
 Audit  of Government Organizations.  Pro-
       Activities, and Functions, developed
 by the Comptroller General, dated Febru-
 ary 27,1981.
  f. "Independent auditor" means:
  (DA State or local government auditor
 who  meets  the  independence  standards
 specified in generally accepted government
 auditing standards; or
  (2)  A public  accountant who meets such
 independence standards.
  g. "Internal controls" means the plan of
 organ:-ation and methods and' procedures
 adopted oy management to ensure that:
  (1)  Resource use is consistent with laws.
 regulations, and policies:
  (2)  Resources are  safeguarded against
 waste, loss, and misuse: and
  (3)  Reliable  data are obtained, main-
 tained, and fairly disclosed In reports.
  h. "Indian tribe" means any Indian tribe.
 band, nations,  or other organized group or
 community,  including any Alaskan Native
 village or regional or village corporations (as
 defined in. or  established under, the Alas-
 kan Native Claims Settlement Act) that is
 recognized by the United States as eligible -
 for the special programs and services provid- /
 ed  by the United States to Indians because
 of their status as Indians.
  L "Local government" means any unit of
 local  government within a State, including a
 county, a borough, municipality, city, town.
 township, parish, local public authority, spe-
 cial district, school  district,  intrastate  dis-
 trict, council of governments, and any other
 instrumentality of local government.
  J. "Major Federal Assistance Program." as
 defined by Pub. L.  98-502. is described in
 the Attachment to this Circular.
  k. "Public accountants" means those indi-
 viduals who meet the qualification stand-
 ards  included In generally accepted govern-
 ment auditing standards for personnel  per-
 forming government audits.
  L "State" means any State of the United
 States, the District  of Columbia, the Com-
 monwealth of Puerto Rico,  the Virgin Is-
 lands. Guam.  American Samoa, the Com-
 monwealth of  the  Northern Mariana Is-
 lands, and the Trust Territory of the Pacific
 Islands, any  instrumentality thereof,  and
 any  multi-State,  regional,   or interstate
 entity that has governmental functions and
 any Indian tribe.
  m.  "Subreclpient" means  any person or
 government department,  agency,  or estab-
 lishment that  receives Federal financial as-
 sistance to carry out a program through  a
 State or local  government, but does not in-
• elude an individual  that is a beneficiary of
 such a program. A subreclpient may also be
 a direct recipient of Federal financial assist-
 ance.
  «. Scope of  audit The Single Audit Act
 provides that:
                                        388

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 Environmental Protection Agency

   a. The audit shall be made by an  inde-
 pendent auditor in accordance with general-
 ly accepted government auditing standards
 covering financial and compliance audits.
   b. The  audit shall  cover the entire  oper-
 ations of a State or local government or. at
 the option of that government, it may  cover
 departments,  agencies  or establishments
 that received, expended, or otherwise ad-
 ministered   Federal   financial  assistance
 during the year. However, if a State or local
 government  receives $25.000  or  more in
 General Revenue Sharing Funds in a  fiscal
 year, it shall have an audit of its entire op-
 erations. A series of audits of individual de-
 partments, 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 the requirements of this
 Circular.  However, if such entities are ex-
 cluded, audits of  inese  entities  shaJ'  be
 made In accordance wun statutory require-
 ments and the provisions of Circular A-110.
 "Uniform requirements  for grants to univer-
 sities, hospitals, and other nonprofit organi-
 zations,"
  d. The auditor shall determine whether
  (1) The financial statements of the gov-
 ernment,  department, agency or establish-
 ment present  fairly  its financial  position
 and the results of Its  financial operations in
 accordance with generally accepted account-
 ing principles:
  (2) The organization has internal account-
 Ing and other control  systems to provide
 reasonable assurance that it is  managing
 Federal financial  assistance  programs in
 compliance with applicable laws and regula-
 tions; and
  (3) The organization  has complied  with
 laws and regulations that may have materi-
 al effect on Its financial statements and on
 each major Federal assistance program.
  7.  Frequency  of audit  Audit*  shall be
 made annually unless the State or local gov-
 ernment has, by January 1,1987. a constitu-
 tional or statutory requirement for less fre-
quent audit*. For those  governments, the
 cognizant   agency  shall  permit   biennial
 audit*, covering both yean,  if the govern-
 ment to requests.  It shall also  honor re-
 quest* for biennial audits by government*
 that have  an administrative policy railing
 for audits less frequent than annual, but
only for fiscal yean beginning before Janu-
ary 1.1987.
  8.  Internal  control and compliance  re-
 views.  The Single Audit Act  requires that
 the  independent  auditor determine   and
 report  on  whether the  organization has in-
 ternal control systems to provide reasonable
assurance  that it is ™*"*g1ng Federal assist-
ance programs in compliance with applica-
 ble  laws and regulations.
                       Part 31, App. A

  a. Internal control review. In order to pro-
vide this aaturance the auditor must make a
study and evaluation of Internal control sys-
tems  used in administering Federal  assist-
ance  programs. The study and evaluation
must  be made whether or not  the auditor
intends to place reliance on such systems.
As pan of this review, the auditor shall:
  (1)  Test whether these  internal control
systems are functioning in accordance with
prescribed procedures.
  (2)  Examine  the recipient's  system for
monitoring subrecipient* and obtaining and
acting on subrecipient audit report*.
  b. Compliance review. The  law also  re-
quires the auditor to 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 government* shall identify
in their account* all Federal funds received
and  expended  and  the  programs  under
which they were received. This shall include
fund* received directly from Federal agen-
cies and through other State and local gov-
ernment*.
  (2) The review must include the selection
and testing of a representative number of
charges from each major Federal assistance
program. The selection and testing of trans-
actions shall be based on the auditor's pro-
fessional judgment considering such factors
as the amount of expenditures  for the pro-
gram  and the individual awards; the new-
ness of the program or changes  in it* condl- •
tiona; prior experience with the program;
particularly a* revealed In audits and other
evaluation*  (e.g., inspections program  re-
views); the extent to which the program is
carried  out  through  subreclpients;  the
extent .to which the program contract* for
goods or services; the level to which the pro-
gram  1* already subject to program reviews
or other  forma of independent oversight;
the adequacy of the  controls for ensuring
compliance; the expectation of adherence or
lack of adherence to the applicable laws and
regulation*: and the potential impact of ad-
verse  findings.
  (a) In making the test of transactions, the
auditor shall determine whether.
—The amount* reported  as expenditures
  were for allowable services, and
—The record* show that the;? who received
  service* or benefit* were eligible to  receive
  them.
  (b) In addition to transaction testing,  the
auditor shall determine whether
—Matching requirement*, levels of  effort
  and earmarking limitations were met.
—Federal financial report* and claims  for
  advance* and reimbursements contain in-
  formation that la supported by the books
                                        389

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 fart 31, App. A

  and records from which the basic financial
  statements have been prepared, and
 -Amounts claimed or used  for matching
  were determined in accordance with OMB
  Circular A-B7. "Cost principles for State
  and local governments." and Attachment
  F of  Circular A-102. "Uniform  require-
  ments for grants to State and local gov-
  ernments."
  (c) The principal compliance requirements
of the largest Federal aid programs may be
ascertained by  referring to the Compliance
Supplement for Single Audit* of State and
Local Government*.  Issued  by OMB and
available  from the  Government Printing
Office. For those programs not covered in
the  Compliance Supplement,  the auditor
may ascertain  compliance requirements  by
researching the  statutes, regulations, and
agreements governing individual program*.
  (3) Transactions related to other Feo*....
assistance  programs  that are selected  in
connection with  examinations of financial
statements and evaluations of internal con-
trols  shall be  tested  for compliance  with
Federal  laws and regulations that apply to
such transactions.
  9.  Subrecipient*.  State or local  govern-
ments that receive Federal financial assist-
ance and provide $25.000 or more of it in a
fiscal year to a subrecipient shall:
  a. Determine whether State or local subre-
Tipienta  have met the audit requirements of
•his Circular and whether subrecipients cov-
ered by Circular A-110. "Uniform require-
ments for grants to universities, hospitals.
und  other nonprofit  organizations." have
set that requirement:
  b.  Determine whether the subreclpient
-.pent Federal assistance funds provided In
iccordance with applicable laws and regula-
ions. This may be accomplished by review-
ng an audit of  the subreclpient made In ac-
cordance with this Circular.  Circular A-110.
ir through other means (e.g.. program re-
1ews> if the subreclpient has not yet had
uch an ai'dit;
 c.   Ensure  that  appropriate  corrective
£tion is taken  within six months after re*
eipt of the audit report in instances of non-
ompliance with Federal laws and regula-
tor
  d.   onsider whether subrecipient audits
.ecei.4tate adjustment of  the recipient's
 wn records: and
  e. Require each subrecipient to permit tn-
 ependent auditors to have access  to the
ecords and financial  statements as neces-
ary to comply with this Circular.
  10. Relation to other audit requirement*.
*he Single Audit Act provides that an audit
iade in accordance with this Circular shall
 • in lieu  of any financial or financial com-
  :anee audit required under individual Fed-
  •iJ assistance programs. To the extent that
  £,.-?•)<••  audit   provides  FederaJ  agencies
             or. and  assurance they  ne«d
          40 CFR Ch. 1 (7-1-88 Edition)

to carry out their overall  responsibilities.
they shall rely upon and use such informa-
tion. However, a Federal agency shall make
any additional audits which are necessary to
carry out its responsibilities under Federal
law and regulation. Any additional Federal
audit effort shall be planned and carried out
in such a way as to avoid duplication.
  a. The provisions of this Circular do not
limit the  authority of Federal agencies to
make, or contract for audits  and evaluations
of Federal  financial   assistance  programs.
nor do they limit the authority of any Fed-
eral agency Inspector General or other Fed-
eral audit official.
  b. The provisions of this Circular do not
authorize any State or local government or
subreclpient  thereof  to constrain Federal-
agencies. In any manner, from carrying out
additional audits.
  c. A  Fede: : agency  that makes or con-
tracts  for audits In additon to the audits
made by recipients pursuant to this Circular
shall, consistent with other applicable laws'
and  regulations, arrange for funding the
cost  of such additional audits. Such  addi-
tional audits Include economy and efficien-
cy audits, program results audits, and pro-s
gram evaluations.                         ;
  11. Copnizant agency responsibilities. The
Single  Audit  Act  provides  for congnizant
Federal agencies to oversee the implementa-
tion of this Circular.
  a. The Office of Management and Budget
will assign cognizant agencies for States and
their subdivisions  and  larger local govern-
ments and their subdivisions. Other Federal
agencies m_y participate  with an assigned
cognizant agency, in order to fulfill the cog-
nizant  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.
  b. A  cognizant agency shall have the fol-
lowing responsibilities:
  (1) Ensure that  audits are made and re-
ports are received in a timely manner and in
accordance with the  requirements of  this
Circular.
  (2) Provide technical advice and liaison to
State and local governments and independ-
ent 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 orga-
nizations.
  (4) Promptly Inform other affected Feder-
al agencies and appropriate Federal law en-
forcement  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.

-------
 Cfw»r«fim«n/al Protection Agmnty '.'

   (5) Advise  the recipient of audits that
 have been  found not to have met the re-
 quirements set forth in this Circular. In
 such instances, the recipient will be expect-
 ed to work with  the auditor to take correc-
 tive action. If corrective actionis not taken.
 the cognizant agency shall notify the recipi-
 ent 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 made pursuant
 to  this  Circular, so  that the  additional
 audits build up such audits.
  (7)  Oversee the resolution of audit find-
 ings that affect the programs of more than
 one agency.
  12.  Illegal acti or irregularities. If the
 auditor becomes aware of Illegal acts or
 other irregularities, prompt notice shall be
 given  to recipient  mai^4   *nt  officials
 above the level of involvement.  (See also
 program 13(aX3) below for the auditor's re-
 porting responsibilities.) The recipient, in
 turn,  shall  promptly notify the cognizant
 agency of the illegal acts or irregularities
 and of proposed and actual actions, if any.
 niegal acts  and irregularities include such
 matters as conflicts of Interest, falsification
 of records or reports, and misappropriations
 of funds or other assets.
  13. Audit Report*. Audit reports must be
 prepared at the completion of the audit Re*
 ports  serve many needs of State and local
 governments as well as meeting the require*
 oaents of the Single Audit Act.
  a. The audit report shall state that the
 audit was made in accordance with the pro-
 visions of this Circular. The report shall be
 made up of at least:
  (1) The auditor's report on financial state-
 ments and on a schedule of Federal assist-
ance: the financial statements; and a-sched-
 ule of Federal assistance, showing the total
expenditures for each Federal assltance pro-
gram 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 cap-
 tion "other Federal assistance."
  (2) The author's report on the  study and
 evaluation of Internal control systems must
 identify the  organization's significant inter-
 nal 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 evalu-
 ated, and the material-weaknesses Identified
 u » result of the evaluation.
  (3> The auditor's report  on compliance
 containing:
                        Port31,App. A

—A statement of positive assurance with re-
  spect to those items tested for compliance.
  including compliance with law and regula-
  tions pertaining to financial reports and
  claims for advances and reimbursements:
—Negative  assurance  on those items  not
  tested:
—A summary of all instances of noncompli-
  ance: and
—An identification of total amounts ques-
  tioned, if any. for each Federal assistance
  award, as a result of noncompliance.
  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 indica-
tions of such acts, including all questioned
costs found as the result of these acts that
auditors become aware of, should normally
be covered in  a separate  written report sub-
mitted in accordance with paragraph 13f.
  d. In addition to the audit report, the re-
cipient shall provide comments on the find
irgs and recommendations in the report, in-
cluding a plan for corrective action taken or
planned and comments on the status of cor-
rective action taken on prior findings. If cor-
rective action is not necessary, a statement
describing the reason it is not should accom-
pany the audit report.
  e. The reports shall be made available by
the State or loaJ  government for public in-
spection within 30 days after the completion
of the audit.
  f. In accordance with  generally accepted
government audit standards,  reports shall
be submitted by the auditor to the organiza-
tion audited and  to those requiring or ar-
ranging for the audit. In  addition, the recip-
ient  shall submit copies of the reports to
each  Federal department or agency  that
provided Federal assistance funds to the re-
cipient Subrecipients shall submit copies to
recipients that provided them Federal as-
sistance funds. The reports shall  be sent
within 30 days after the completion of the
audit, but no  later than  one year after the
end  of the audit period  unless  a longer
period is agreed to  with the cognizant
agency.
  g.  Recipients of more than 1100,000 in
Federal funds shall submit one copy of the
audit report within 30 days after issuance to
a central clearinghouse to be designated by
the Office of Management and Budget. The
clearinghouse will keep completed audits on
file and follow up with State and local gov-
ernments that have not  submitted required
audit reports.
  h.  Recipients shall keep audit reports on
file for three years from  their issuance.
  14. Audit Resolution. As provided in para-
graph 11. the cognizant  agency shall be re-
sponsible  for  monitoring the resolution of
audit findings that affect the programs of
more than one Federal  agency. Resolution
                                        391

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 ran 31, App. A

 of findings that relate to the programs of a
 iUigle Federal agency will be the responsi-
 bility of the recipient and that agency. Al-
 ;ernate arrangements may  be  made  on a
 case-by-case  basis by agreement among the
 agencies concerned.
   Resolution  shall   be  made  within  six
 months after receipt of the report by the
 Federal departments and agencies.  Correc-
 tive action should proceed as rapidly as pos-
 sible.
   19. Audit workpapers end reports. Work-
 papers  and reports shall be retained  for a
 minimum  of three years from  the  date of
 the  audit report, unless the  auditor is noti-
 fied in  writing by the cognizant agency to
 extend  the retention period. Audit work-
 papers shall be made available upon request
 to the cognizant agency or  its  designee or
 the General Accounting Office,  at the com-
 pletion of the audit.
   1$. Audit CotU. The cost of aud'M made in
 accordance with the  provisions  of this c~-
 cular are allowable  charges  to  Federal  as-
 sistance programs.
  a. The charges may be considered a direct
 cost  or an allocated indirect cost, deter-
 mined in  accordance with the provision of
 Circular A-87. "Cost principles for State
 and local governments."
  b.   Generally, the  percentage  of  costs
 charged to Federal assistance programs for
 a single audit shall not exceed the percent-
 age that Federal funds expended represent
 of total funds expended by the  recipient
 during the fiscal year. The percentage may
 be exceeded, however. If appropriate docu-
 mentation demonstrates higher  actual cost.
  17.  Sanctions. The  Single Audit Act pro-
 vides that no cost may be charged to Feder-
 al assistance programs for audits required
 by the Act that are not made In accordance
with this Circular. In eases of continued in-
ability or  unwillingness  to  have a proper
audit. Federal agencies must  consider other
appropriate sanctions including:
—Withholding  a percentage of assistance
  payments until the audit  its completed
  satisfactorily,
 —Withholding  or   disallowing  overhead
  costs, and
 —Suspending the Federal assistance agree-
  ment until the audit is made.
  18.  Auditor Selection.  In  arranging for
 audit services State  and local governments
shaU follow the procurement standards pre-
 scribed by Attachment O of Circular A-102.
 "Uniform  requirements for grants to State
 and local governments." The standards pro-
 vide  that while recipients are encouraged to
 enter into intergovernmental  agreements
for audit and other services, analysis should
 be made to determine whether  it would be
more economical to purchase the services
 from  private firms. In instances where use
of such intergovernmental agreements are
          40 Ctt Ch. I (7-l-a8 Editioi

required by State statutes (e.g., audit ser
Ices) these statutes will take precedence.
 . 19.  Small  and Minority  Audit  Firm
Small  audit  firms and audit firms owne
and controlled by socially and economical]
dlsadvantaged individuals  shall  have  th
maximum practicable opportunity to par
ticipate in contracts awarded to  fulfill  tht
requirements of this Circular. Recipients 01
Federal assistance shall take the following
steps to further this goal:
  a. Assure that small audit firms and audit
firms owned  and controlled by socially and
economically disadvantaged individuals  are
used to the fullest extent practicable.
  b. Make Information on  forthcoming op-
portunities  available  and  arrange  time-
frames for the audit so as to encourage and
facilitate participation by small audit firms
and audit firms owned and controlled by so-
cially and economically dlsadvantaged indi-
viduals.
  c. Consider in the contract process wheth-
er firms competing for larger audits Intend
to subcontract with small audit  firms and
audit firms owned and controlled by socially
and economically disadvantaged Individuals.
  d. Encourage contracting with small audit
firms or audit firms owned and  controlled
by socially and economically  disadvantaged
individuals which have traditionally audited
government  programs and. In such cases
where this is not possible, assure  that these
firms are given consideration for  audit sub-
contracting opportunities.
  e. Encourage  contracting with consorti-
ums of small audit firms as described in
paragraph (a) above when  • contract is too
large for an  individual small audit firm or
audit firm owned and controlled by socially
and economically disadvantaged individuals.
  f. Use the services and assistance, as ap-
propriate, of such  organizations as  the
Small Business Administration in the solici-
tation and utilization of small audit firms or
audit firms owned and controlled  by socially
and economically dlsadvantaged Individuals.
  20. Reporting. Each Federal agency  will
report to the Director of OMB on or before
March 1.  1987. and annually thereafter on
the effectiveness of State  and local govern-
ments In carrying out the provisions of this
Circular.  The report must  identify each
State or local government or Indian tribe
that, in the opinion of the agency, is failing
to comply with the Circular.
  21.  Relations.  Each  Federal  agency
shall include the provisions of this Circular
in Its regulations implementing  the Single
Audit Act.
  22. Effective date.  This  Circular is effec-
tive upon publication and shall apply to
fiscal yea** of State and local governments
that begin after December 31. 1984. Earlier
Implementation   is  encouraged.   However.
until it is Implemented, the audit provisions
                                        392

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 Environmental Protection Agency

 of Attachment P to Circular A-102 shall
 continue to be observed.
   23.  /naumw. All questions or  Inquiries
 should be addressed to .Financial  Manage-
 ment  Division. Office of Management and
 Budget, telephone number 202/395-3993.
   24. Sunset review date. This Circular shall
 have an independent policy  review to ascer-
 tain its effectiveness three  years from the
 date of issuance..
                     DAVID A. STOCKMAN.
                               Director.

     ATTACHMENT—CIRCULAR A-128

    Definition of Major .Program as
     .  Provided in Pub. L. 96-502

  "Major Federal Assistance Program,"  for
 State and local governments having Federal
 assistance  expenditures  be"veen  $100.000
 and $100,000.000. means  a**, program  for
 which  Federal expenditures during the ap-
 plicable year exceed the larger of $308.000.
 or 3 percent of such total expenditures.
  Where total expenditures of Federal  as-
 sistance  exceed $100.000.000, the following
 criteria apply:
Port 32
TouJ auMndilv
financial asaistanc
Mora than
$100 rnflion 	
$1 Mbon 	
$2 ailhon 	
S3 brihon
S4 MkOrt 	
$5 Mbon 	 '.
S6 Mbon 	
O»«f S7 ouhon 	

raa Of Fa»»aral
• for all programs
Bui law tftan
$1 Mbon 	
S2 Mbon 	
S3 Mbon 	
$4 Mkon 	
IS billion 	
16 bauoo 	
J7 boiion 	
	
	
Major F*Ow»J
astisunca program
maans any program
mat aiea.aoi
S3 mtian.
(4 nwiion.
|7 rrylhon
$10 motion
$t3 rtwhon.
$16 milbon.
$19 million.
S20 rmlton.

CS1 FH 6353. Feb. 21. 1986. Redesignated at
S3 FR 8076, Mar. 11. 19881
  ETTTCTIVT DATI NOTE: At 53 FR 8076, Mar.
11. 1988, Appendix £ to Pan 30 was redesig-
nated as Appendix A to Part 31.  effective
October 1.1988.

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                PART 31 POLICY GUIDANCE

How does BPA treat pre-award costs?

The  treatment depends  on the  type  of  grant in  question:
Construction Grants, continuing Environmental Program Grants,
or project type grants.

For Construction Grants EPA shall continue to dral with such
costs as we have in the past; i.e./ require prior approval by
the award official (see 40 CFR 35.2118(a)) or, if applicable,
request a deviation from that Section.

for  continuation  awards  (e.g.,  Continuing  Environmental
Program grants), 40 CFR 35.141 provides that for awards:

     . . . made after the  beginning of the approved
     budget   period,    EPA   will  reimburse  the
     applicant  for allowable costs  incurred from
     the beginning  of  the budget period, provided
     that such costs are contained in the approved
     application  and  that  the  application  was
     submitted before  the expiration of the prior
     (emphasis added) budget period.                )

Thus; if an.application for a continuing environmental program
grant is received before the end of the prior budget period,
no  deviation  is  needed.    If  such is not  the  case,  the
recipient must request  a deviation from 40 CFR 35.141.

We are interpreting 40 CFR 31.23 to mean that pre-award costs
are unallowable and that  the funding period should not start
until after the award is made.  For project type grants in
which a  funding period is specified, grantees may charge to
the award only those costs resulting from obligations incurred
during the funding period (see Section  31.23(a)).  Under Part
31, pre-award costs will be allowed only  if a deviation is
granted.   (The deviation  process remains the same as it was
under Part  30  [see  40  CFR 31.6].)

Is  every   expenditure deemed to include  the Federal  share
(30.307(c))7

Yes.  Though-not  addressed  in Part 31,  EPA shall  continue to
interpret the relationship between Federal funds and recipient
funds in the manner described at 40 CFR 30.307(c); i.e., each
grant related dollar includes both the Federal  and recipient
shares.   One reason for maintaining this posture  is  so that"
recipients  cannot  avoid  Federal  statutory  or  regulatory
requirements by separating their funds  from the Federal funds.
EPA continues  to consider  all allowable project costs to
include  both  the  Federal  and recipient shares.

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3.   May EPA continue to require the minimum five percent match?

     No.   The  five  percent match  is  no longer  a  regulatory
     requirement for State,  local, and  Indian  tribal  governments
     under Part 31 as was the case under Part 30.  However,  in the
     absence  of  statutory/regulatory  requirements  or, program
     guidance  to .the  contrary, it  remains national policy  to
     encourage a minimum five  percent  match if the approval and
     award officials consider it appropriate.   A non-statutory or
     non-regulatory  match  requirement   is basically  a program
     decision.  Therefore,  program officials must address matching
     requirements in  the annual national program guidance.   EPA
     considers  a  minimum  match  as  ensuring  the  recipient's
     commitment to the project.  Because Part 30 still applies to
     Circular A-110 recipients, universities,  hospitals, and non-
     profit institutions must still meet the minimum five percent
     matching requirement.                                     .  ;

4.   How do applicants/recipients  self-certify their .procurement
    ' systems?  .                      '• .                :,.,.»•    •  "^  .

     Under Part 31 States may use their own systems largely without
     restriction   and   without  self-certifying   (see  Section,"
     31.36(a)).   Section 31.36(g)(3)(ii)  notes  requirements for
     self-certification  by  local  and  Indian  tribal government':
     recipients.  EPA is continuing to use the previously approved
     self-certification  form for  governmental applicants.   The
     Superfund regulation (40 CFR Part 35, Subpart O)  includes the
     requirement for applicants to  self-certify using  the existing
     form.                                                     .

5.   Does the purchase of equipment  require prior approval?

     Yes.   Equipment which  is  beyond  the scope  of the approved
     project  (i.e.,  not  included  in  the award  document) • is
     unallowable.    Pursuant to Section  3l.30(b)  grantees must
     follow   the  applicable   cost  principles  . which  contain
     requirements  for prior approval  of  certain types of  costs
     except where waived by  EPA.  Under  Circular  A-87,  States and
     local and  Indian tribal governments are  required to  obtain
     prior approval  for  purchases of equipment.

6.   Bow should EPA  handle  conditions for "high  risk" grantees?

     Award conditions based  on  a statute, a policy consistent with
     Part 31, or which are technical or programmatic in nature are
     not considered  "high risk" conditions.  EPA officials  include
     such  conditions in award  documents to ensure,  for example,
     compliance  with  the  work plan  or  to  establish  technical
     standards  for work under the grant.  By  way of  contrast you

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• .     •                        . 3 -  '


     should use  "high risk" conditions to radically modify, alter,
     or restrict a grantee's planned  activities  in  light  of,  for
     example, the terns and conditions of a previous award.

     Section  31.12   applies only  to  grantees  which,  based  on
     criteria listed at 31.12(a), have been formally determined to
     be  "high  risic."    You  must  base such  determinations  on
     objective  criteria such  as  monitoring,  pre-award  surveys,
     audits,  credit  reports,  or the  performance history  of  the
     applicant/recipient.  As a result, the award is made subject
     to special  conditions  designed to forestall or preclude the
     recurrence of the incident(s) which led to their imposition.

     Part 31  clearly allows EPA to include in an award terms and
     conditions other than those for "high risk" grantees,  Section
     31.10(b)(3) provides that "Federal agencies may specify and
     describe the programs, functions, or activities that will be
     used to plan, budget,  and evaluate the work under a grant."  ,

     When Regions add  "non-high-risk" conditions to awards, they
     should use the phrase "terms and  conditions  of  award"  in lieu
     of "special conditions."  Regions should reserve the  latter
     phrase for  "high  risk" grantees.  (The definition of  "terms
     a  grant  or  subgrant  is  found  at   31.3   and means "all
     requirements of the grant or subgrant,  whether in statute,
     regulations, or the award document.")

7.   Must  we  adhere to  the  Part 31 requirement  to liquidate
     obligations within 90  days?

     Yes.   However,  we  may allow  additional  time under  Section
     31.23(b) which  stipulates that grantees must:

          liquidate  all obligations incurred  under  the
          award  not  later than 90  days after the end of
          the/funding period  ....   [but] The  Federal
          agency may extend this deadline at the  request
          of  the grantee.

     By granting approval  under  this provision  submittal  of  the
     final  PSR may be  postponed  (31.41(b)(4)).  If  a grantee  does
     not  use  this   provision,  it would .need  a  deviation  from
     31.41 (b) (4)..:

     Good   management   requires   timely   liquidation   -of   all
     obligations; but we must also recognize  that  there  are  many
     good and valid  reasons for approving an  extension of the 90
     day deadline.

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                                           -. 4 •
             8.   what i*  EPA's policy on  the recipient's acceptance of  the
                  award vithin 21 days?
                  EPA will continue to follow its longstanding policy requiring
                  acceptance of the grant within 21 days unless an extension has
                  been granted. We encourage Regions to include the requirement
                  in transmittal letters.

             9.   What is the definition of "Funding Period'* a» used in Part 31?

                  "Funding Period" as used in Part  31 means the same as "Budget
                  Period" in Part  30 and therefore you should use it in the same
                  way. Part 31 does not include the term  "Project Period."  EPA
                  policy is to continue to  use "Project  Period" as defined in
                  Part 30.

             10.  is there a  dollar level on State awarded subgrants at  which
                  EPA must give approval?

                  No.  section 31.37(a) provides that "States shall follow state
                  law and procedures when awarding and administering subgrants
                  .   .  .  to  local  and  Indian  tribal  governments."   .This is
                  consistent with the principles of Federalism as discussed in
                  the March 11, 1988, preamble to the common rule..

             11.  Eow shall EPA address the use of Force Account  in grants undex
                  Part 31?                                   .     '      *.

                  Part 31 does  not  include  special  requirements  for  Force
                  Account  work.    However,  under  OMB  Circular  A-87  to  be
                  allowable, costs (e.g., Force Account costs) must be necessary
                  and reasonable.   Accordingly,  to  help ensure the allowabrlity
                  of such  costs,  it  remains EPA policy that grantees  should
                  demonstrate to the reviewing office during the

                  application  period that  proposed Force  Account  work over
                  $25,000 is  more economical than contracting and/or dictated
                  by an emergency.

             12.  Do changes/transfers require prior approval?          ;v

                  No.   Section 31.30(a)  allows grantees  and  subgrantees to
                  "rebudget  within the  approved direct cost  budget to meet
                  unanticipated requirements and  . . . make  limited program
                  changes  to the  approved project" without prior  approval.
                  However, certain changes in budgets and projects  (as outlined
                  at Section 31.30, paragraphs  (c)  through  (£).)  require written
                  approval.
.

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           APPENDIX F
40 CFR PART 33, "PROCUREMENT UNDER
     ASSISTANCE AGREEMENTS

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substance in conducting  any activity with
the grant.

(54 FR 4962, Jan. 31.1989]
    PART 33—PROCUREMENT UNDER
       ASSISTANCE AGREEMENTS

 Sec.
 33.001 Applicability and scope of this part.
 33.005 Definitions.

   Subpart A—Procurement System Evaluation

 33.105 Applicability and scope  of this sub-
     part.
 33.110 Applicant  and recipient certifica-
     tion.
 33.115 Procurement system review.

     Subpart i  Procurement Requirements

 33.205 Applicability and scope  of this sub-
     part.
 33.210 Recipient responsibility.   •
 33.211 Recipient reporting requirements.
 33.220 Limitation on subagreement award.
 33.225 Violations.
 33.230 Competition.
 33.235 Profit.
 33.240 Small, minority, women's, and labor
     surplus area businesses,
 33.245 Privity of subagreement.
 33.250 Documentation.
 33.255 Specifications.
 33.260 Intergovernmental agreements.
 33.265 Bonding and insurance.
 33.270 Code of conduct
 33.275 Federal coat principles.
 33.280 Payment to consultants.
 33.285 Prohibited types of subagreements.
 33.290 Cost and price considerations.
 33.295 Subagreements awarded by * con-
     tractor.

             SMALL PURCHASES
. 33.305 Small purchase procurement
 33.310 Small purchase procedures.
 33.315 Requirements for competition.

            FORMAL ADVERTISING

 33.405 Formal  advertising  procurement
     method.
 33.410 Public  notice  and solicitation  of
     bids.
 33.415 Time for preparing bids.
 33.420 Adequate bidding documents.
 33.425 Public opening of bids.
 33.430 Award to lowest responsive, respon-
     sible bidder.

       * COMPETITIVE NEGOTIATION
 33.505 Competitive  negotiation  procure-
     ment method. '
 33.510 Public notice.
   33.515 Evaluation of proposals.
   33.520 Negotiation and award of sub-agree-
       ment.
   33.525 Optional selection procedure for ne-
       gotiation and award of  subagreements
       for architectural and engineering serv-
       ices.
                                                 NONCOMPETinVE NEGOTIATION

                                           33.605  Noncompetitlve  negotiation
                                              curement method.

                                                     Subpart C—(Reserved]
                                       pro-
   Subpart 0—Requirements  far  Institution* of
      .Higher Education and Other Nonprofit Or-
       ganizations

   33.805 Applicability and scope of this  sub-
      part.
   33.810 Nonapplicable        subagreement
      clauses.
   33.815 Nonapplicable  procurement  provi-
      sions.
   33.820 Additional  procurement  require-
      ments.

             Subpart I—(Reserved]

        Subpart F—Subagreement Provisions

   33.1005 Applicability and scope of this sub-
      part.
   33.1010 Requirements  for  subagreement
   33.1015 Subagreement provisions clause.
   33.1016 Labor standards provisions.
   33.1019 Patents,  data   and   copyrights
       clause.
   33.1020 Violating facilities clause.
   33.1021 Energy efficiency clause.
   33.1030 Model subagreement clauses.

               Svbport 0—Protests

   33.1105 Applicability and scope of this sub-
       part.
   33.1110
   33.1115
   33.1120
   33.1125
   33.1130
   33.1140
   33.1145
                                                   Recipient protest procedures.
                                                   Protest appeal.
                                                   Limitations on protest appeals.
                                                   Filing requirements.
                                                   Review of protest appeals.
                                                   Deferral of procurement action.
                                                   Award official's review.
   APPENDIX  A—PROCEDURAL  REQUIREMENTS
       FOR RECIPIENTS WHO  Do Nor CERTIFY
       THEIR  PROCUREMENT SYSTEMS.  OR FOR
       RECIPIENTS WHO HAVE THEIR PROCURE-
       MENT CERTIFICATIONS REVOKED BY EPA

     AUTHORITY: 7 U-S.C. 135 et seq.; 15 U.S.C.
   2601 et seq.: 33 U.S.C. 1251 et seq.; 42 U.S.C.
   241. 242b. 243,  246, 300J-1. 300J-2, 300J-3.
   1857 et seq.. 6901 et seq.; and 42 U.S.C. 9601
   etaeq.                     •  -
391

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 Sooner: 48 PR 12926. Mar. 28. 1983, unless
otherwise noted.

9 33.001  Applicability and scope of this
   part
  (a) This part applies to all assistance
agreements awarded on or  after the
effective date of this part. For assist-
ance agreements  awarded before the
effective date, this part will apply only
to those procurement actions initiated
by the recipient on or after  the date
the recipient  complies with  the self-
certification requirements in S 33.110
of this part.
  (b) This part:
  (1)  Describes EPA's  procurement
system evaluation process.
  (2) Identifies the minimum require-
ments  for the procurement of sup-
plies, services, and construction under
EPA assistance agreements.
  (3) Identifies an additional specifica-
tion   requirement  for  procurement
under assistance  agreements for the
construction   of  treatment  works
awarded under 40 CFR Part 35, Sub-
parts E and I.
  (4)   Identifies   the   procurement
standards that institutions of higher
education and other nonprofit organi-
zations must follow.
  (5) Identifies the provisions that re-
cipients of EPA assistance agreements
must include in their subagreements.
  (6)  Describes  the procedures that
EPA will use to handle protest appeals
concerning the award of a subagree-
ment by the recipient of an EPA as-
sistance agreement.
  (c) This part does not apply to work
beyond the scope of the project  for
which  an  assistance  agreement  is
awarded (I.e., ineligible work).
  (d) This part does not apply to ex-
penses for services for which the recip-
ient will receive an allowance or a po-
tential  recipient will  receive an  ad-
vance of  an allowance  under 40 CFR
Pan 35, Subpart I.
   (e) This part supplements the  re-
quirements in:
  (1) 40 CFR Part 30 "General Regula-
tion for Assistance Programs," and
   (2) 40  CFR Part 32, "Debarments
and Suspensions  under  EPA Assist-
ance Programs."
  (f) The following types of recipients
must comply with the specified sub-
parts in this part:
  (1)  Recipients of assistance agree-
ments for  the  construction of treat-
ment works awarded under 40  CFR
Part 35, Subparts E and I, must follow
the requirements in Subparts A.  B, C,
F and C.                     -
  (2) Recipients of remedial action co-
operative agreements under the  Com-
prehensive Environmental  Response.
Compensation.  Liability  Act  of  1980
(Superfund 42 U.S.C. 6901  et  seq.)
must follow the requirements  in Sub-
parts A, B. E, F and Q.
  (3)  State and local government re-
cipients for other than construction
grants and CERCLA remedial action;
cooperative agreements  must follow
the requirements in Subparts  A, B. F
andO.
  (4) Institutions of higher education.
hospitals, and other nonprofit organi- ^;
zations must follow the  requirements":
in Subparts A. B, D and O.
  (g) In the construction of treatment
works program under the Clean Water
Act (33 U.S.C. 1251 et. seq.), it is EPA's
policy to delegate determinations on
individual projects to State agencies to
the maximum  extent possible (see ,40
CFR Part 35.  Subpart F). This part
uses the term "award official." To the
extent that the award official  for  a
treatment works assistance agreement
delegates responsibility for determin-
ing compliance with the requirements
of this part (except for § 33.115 "Pro-
curement system review," and Subpart
O "Protests") to a State agency  under
a delegation  agreement  (40  CFR
35.1130),  the  term  "award  official"
may be read "State agency."
   
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   ua

*
133.005  Definitions.
  tA)  Words and  terms not  defined
 Jiflw shall have the meaning given to
 nem Si 40 CPR Part 30 and Part 35.
   Astan-facUic  American  twuu
origins from Japan, China, the Philip-
pines, Vietnam, Korea, Samoa, Guam.
the U.S. Trust Territories of the Pacif-
ic. Northern  Marianas, Laps, Cambo-
dia,  Taiwan  or the  Indian  subconti-
nent).
  Price analysis. The process of evalu-
ating a prospective  price . without
regard to  the  contractor's separate
cost elements  and  proposed  profit.
Price analysis determines the  reason-
ableness of  the  proposed subagree-
ment price based on adequate price
competition; previous experience with
similar  work, established catalog or
market price, law, or regulation.
  Profit. The net proceeds obtained by
deducting all allowable  costs  (direct
and indirect) from the price. (Because
this definition of profit is based on ap-
plicable Federal cost  principles, it may
vary from  many firms' definition of
profit, and may correspond to those
firms' definition of "fee.")
  Services.  A contractor's labor, time,
or efforts which do not involve the de-
livery of a specific  end item, other
than documents,  (e.g., reports, design
drawing, specifications).  This  term
does not include  employment agree-
ments or collective bargaining agree-
ments.
  Small business. A business as defined
In section 3 of the Small Business Act,
as amended (15 U.S.C. 632).
  Subagreement A written agreement
between an EPA recipient and another
party  (other  than  another  public
agency) and  any lower tier agreement
for services,  supplies, or construction
necessary to  complete the project. Su-
bagreements include  contracts  and
subcontracts for  personal and  profes-
sional services, agreements  with con-
sultants, and purchase orders.
  Supplies.   All  property,  including
equipment, materials, printing, insur-
ances, and leases of real property, but
excluding land or a permanent inter-
est in land.
   Women's   business  enterprise.   A
women's business enterprise is a busi-
ness which is  certified as such  by  a
State  or  Federal agency,  or which
meets  the  following  definition:   A
women's business enterprise is an inde-
pendent business concern which is  at
least 51 percent owned by a woman  or
                                      393

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women who also control and operate
it. Determination of whether a busi-
ness is at least 51 percent owned by a
woman or women shall be made with-
out  regard to  community  property
laws. For example, an otherwise quali-
fied WBE which is 51 percent owned
by a married woman in a community
property state will not be disqualified
because her husband has a 50 percent
interest in her share. Similarly, a busi-
ness which is 51 percent owned by a
married man and 49 percent owned by
an unmarried woman will not become
a qualified WBE by virtue of his wife's
50 percent interest in his share of the
business.

   Subpart A—Procurement System
             Evaluation

§33.105  Applicability and  scope  of this
   subpart
  (a) This subpart applies to all recipi-
ents of EPA assistance agreements.
  (b) For procurements involving EPA
funds,  recipients shall use their own
procurement policies and procedures if
those policies and procedures  reflect
applicable Federal. State, and local
laws and regulations, and at least meet
the  requirements set forth  in  this
part.
  (c) This subpart describes when EPA
will  review the  recipient's  procure-
ment practices.

§33.110  Applicant and recipient certifica-
   tion.             .

  (a) It is the  applicant's and recipi-
ent's responsibility to evaluate its own
procurement system and to determine
whether its system meets the applica-
ble  requirements in  this  part  (see
§33.001).
  (b) After evaluating its procurement
system, the applicant or recipient will
complete  the  "Procurement System
Certification"   (EPA  Form  5700-48).
The applicant or recipient will either
certify that:
  (1) Its system will meet the intent of
all the  requirements  in  this part
before any  procurement action with
EPA assistance is undertaken, or
  (2) Its current system does not meet
the intent of the requirements of this
part and, therefore, the applicant will
icllov: the requirements  of 40 CFB
Part  33 and allow  EPA  preaward
review of proposed  procurement  ac-
tions that will use EPA funds. The ad-
ditional requirements for EPA  review
and approval are contained in Appen-
dix A to this part.
  (c) The applicant must submit the
signed certification form with the as-
sistance application to the award offi-
cial.
  (d) The certification will be valid for
two years;or  for the length of the
project period specified in the assist-
ance agreement, whichever is greater.
unless the  recipient  substantially re-
vises its procurement system or the
award  official determines that the re-
cipient Is not following the intent of
the requirements  in this  part (see
§ 33.115(b)). If the recipient substan-
tially revises its procurement system,
the  recipient  must  re-evaluate  its
system and  submit  a revised EPA
Form 5700-48.
  (e) Even  when a recipient certifies
its  procurement system,   the EPA
award  official retains the  authority
stated in:
  (1)  Section 33.210(h) "Recipient's
procurement responsibilities."  which
requires  the recipient to receive the
award official's prior written approval
if the  recipient wants to use an inno-
vative procurement method.
  (2) Section 33.211 "Recipient report-
ing requirements." which requires the
award official to notify the  Depart-
ment of Labor of certain construction
subagreement awards, and  obtain all
bid or offer tabulations*
  (3)  Section  33.605(d) "Noncompeti-
tlve      negotiation      procurement
method," to authorize a noncompeti-
tive award.
  (4)   Section  33.820(b)  "Additional
procurement requirements," which re-
quires the award official's prior ap-
proval for  a sole source award over
$10.000 by  an institute of higher edu-
cation or other nonprofit organization.
  (5) Subpart O "Protests."
£48 FR 12926, Mar. 28.  1983; 48 FR 30364.
July  1, 1983. as amended at  53 FR 8077,
Mar. 11.19881

S 33.115 Procurement system review.
  (a) EPA will not substitute its judg-
ment  for that of the recipient unless

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                        . <•. ' A
the matter 1* primarily a Federal con-
cern.
  (b) Even if a recipient has a certified
procurement system. EPA reserves the
right to review a recipient's procure-
ment system  or procurement action
under an assistance agreement:
  (1) To determine if  the recipient is
following the  procurement  require-
ments in this part; or
  (2) When there is sufficient reason
to believe that the recipient's system
may be unacceptable based on:
  (i)  Information  concerning   the
review or certification of the recipi-
ent's procurement  system or  actions
by other Federal agencies or Congress;
  (ii) Information from the  recipient's
cognizant audit agency;
  (iii) Information from State agencies
and  organizations independent of the
recipient's procurement activity;
  (iv) Recipient responses to the pro-
curement system certification form;
  (v)  Previous  EPA experience  with
the recipient; or
  (vi) Information from contractors or
prospective contractors.
  (c) If the award official determines
that the recipient is not following the
procurement requirements it certified
it would follow,  the award  official
shall revoke the recipient's certifica-
tion and:
  (1) Require that the recipient follow
the procurement requirements in this
part, including Appendix A. for future
procurement actions and, if appropri-
ate,
  (2) Apply the sanctions in 40  CFR
Part 30.
  (d) The recipient may recertify its
procurement system  if  It shows the
award official that it has corrected the
procurement deficiencies noted by the
award official, and the award official
accepts the recertiflcation.

       Subpart B—Procurement
            Requirements

8 33.205  Applicability and scope of this
    subpart.
  This subpart contains:  -
  (a) The recipient's and  EPA's  re-
sponsibilities, and
  
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  (a)   Name,    address,   telephone
number and employee  identification
number of  the construction  contrac-
tor,
  (b) Amount of the award,
  (c) Estimated starting and comple-
tion dates,
  (d) Project number, name and site
location of the project, and
  (e) Copy of the tabulations of bids or
offers and the name of each bidder or
offerer.
[48 FR 12926, Mar. 28. 1983; 48 FR 30364.
July 1.1983]
933.220  Limitation
    award.
of   subagTeentent
  (a) The recipient shall award suba-
greements only to responsible contrac-
tors that possess the potential ability
to  perform  successfully  under  the
terms and conditions of a  proposed
procurement. A responsible contractor
is one that has:
  (1)  Financial   resources,  technical
qualifications,  experience,   organiza-
tion and facilities adequate to carry
out the  project, or  a demonstrated
ability to obtain these;
  (2) Resources  to  meet  the comple-
tion schedule contained in the suba-
greement;       ,.,
  (3)  A   satisfactory  performance
record for  completion  of subagree-
ments;
  (4) Accounting and  auditing proce-
dures adequate  to  control  property.
funds and  assets, as  required in this
part and 40 CFR Part 30; and
  (5) Demonstrated compliance or will*
ingness to comply with the civil rights.
equal employment opportunity; labor
law and other statutory requirements
under 40 CFR Pan 30.
  (b)  The  recipient  shall not  make
awards to contractors who have been
suspended, debarred, or voluntarily ex-
cluded under 40 CFR Part 32 nor shall
it permit any portion of the work re-
quired by the subagreement to be per-
formed  at any facility listed on  the
EPA List of Violating Facilities (see 40
CFR Part 15).

§33.225  Violation*.
  The recipient shall  refer violations
of law to the local. State or Federal
authority with  jurisdiction  over  the
matter (see 40 CFR  30.610).
(48 FR 12926, Mar, 28, 1983; 48 FR 30364
July 1.1983]                          '

933.230  Competition.
  (a)  The recipient shall conduct all
procurement transactions in a manner
that provides maximum open and  free
competition.
  (b)  Procurement  practices shall not
unduly  restrict or  eliminate competi-
tion. Examples of practices considered
to be  unduly restrictive include:
  (1)  Noncompetitive  practices  be-
tween firms;
-. (2) Organizational conflicts of inter-
est;
  (3)  Unnecessary   experience   and
bonding requirements;               •
  (4)  State  or local laws, ordinances,
regulations  or procedures which,  give
local  or in-State  bidders or proposers
preference over other bidders or  pro-
posers in evaluating bids or proposals;
or
  (5)  Placing  unreasonable  require-:
ments on firms in  order for them to
qualify to do business.
  (c) The recipient may use a prequali-
fication list(s) of  persons,  firms or
products if it:                    .
  (1) Updates its prequalified list(s) at
least every six months;
  (2) Reviews and acts on each request
for prequalification made more than
30 days before the closing date for re-
ceipt  of proposals or bid opening;  and
  (3)  Gives  adequate public notice of
its  prequalification procedure in ac-
cordance with the public notice proce-
dures in S 33.410 or  f 33.510.
  (d)  A recipient may not use a  pre-
qualified listts) of persons or firms if
the procedure  unnecessarily restricts
competition. However, this restriction
does not apply to  5 33.525 "Optional
selection  procedure  for  negotiation
and award of subagreements for archi-
tectural and engineering services."
  EDITORIAL NOTE For Class deviation docu-
ments affecting  133.230. see the List of
CFR Sections Affected in the Finding  Aids
section of this volume.

§33.235  Front
  (a) Recipients must assure that only
fair and reasonable profits are paid to
contractors   awarded subagreements
under EPA assistance agreements.

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  (O When in the judgment of the re-
cipient it is impractical or uneconomi-
cal to make a clear and accurate  de-
scription  of   the  technical  require-
ments, recipients may use  a "brand
name or equal" description as a means
to define the  performance .or other sa-
lient requirements of a procurement.
The recipient need not establish the
existence of any source other than the
named brand. Recipients must clearly
state  in the  specification the salient
requirements  of  the  named  brand
which must be met by offerers. (An
additional  specification  requirement
for recipients of assistance for the con*
struction of treatment works under 40
CFR Part 35, Subparts E and I is con-
tained in 5 33.710.)

§ 33.260  Intergovernmental agreements.
  (a) To foster greater economy and
efficiency, EPA encourages  recipients
to enter into  State and local intergov-
ernmental  agreements  for  common
procurement or use of goods and serv-
ices.
  (b)   Although    intergovernmental
agreements are not subject to the re-
quirements in this part, all procure-
ments under intergovernmental agree*
ments are subject to the requirement*
In this part except for procurements
that are:
  (1) Incidental to the purpose of the
assistance agreement;- and
  (2) Made through a central public
procurement unit.

0 33.265  Bonding and insurance.
  (a) These requirements apply-only
to recipients  and contractors with su-
bagreements for construction.
  (1) For construction subagreements
of $100,000 or leas, the recipient shall
follow its own requirements relating to
bid  guarantees,  performance  bonds
and payment bonds.  •
  (2)  For those subagreements  more
than $100,000. the award official may
accept the recipient's  bonding policy
and requirements provided the award
official makes a determination that
the Federal  Government's interest is
adequately protected. If the award of-
ficial does not make that determina-
tion,  the minimum bonding  require-
ments for subagreements  more than
UOC-,000 are:
  (i)  A  "bid  guarantee" from each
 bidder equivalent to five percent  of
 the bid  price. The "bid guarantee"
/shall consist  of  a firm commitment
 aucti as a bid  bond, certified check  or
 other negotiable  instrument accompa-
 nying a bid  as  assurance  that the
 bidder will, upon acceptance  of the
 bid, execute  such contractual  docu-
 ments as the EPA recipient may re-
 quire within the time specified.
  
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                f
  (2) An organization which may re-
ceive or has been awarded a subagree-
ment employs, or is about to employ,
any person under paragraph (b)(l) of
this section.
  (c) The recipient's officers, employ-
ees or agents shall neither solicit nor
accept gratuities, favors or anything of
monetary value from contractors, po-
tential contractors or other parties to
subagreements.
  (d)  Recipients may  set  minimum
rules where  the financial interest is
not substantial or the gift is an unso-
licited item of nominal intrinsic value.
  (e) To the extent permitted by State
or local law or regulations, the recipi-
ent's code of conduct shall provide for
penalties, sanctions  or other discipli-
nary actions for violations of the code
by the recipient's officers, employees
or agents or by contractors or  their
agents.

§ 33.275 Federal cost principles.
  The following cost principles apply
to assistance agreements and suba-
greements:
  (a)   State  and  local governments
must comply with OMB Circular A-87
to determine allowable costs.
  (b)  Educational  institutions  must
comply with OMB Circular A-21 to de-
termine allowable costs and with OMB
Circular A-88 for indirect cost rates.
  (c)   Nonprofit   institutions   must
comply with OMB  Circular A-122 to
determine allowable costs.
  (d) All other recipients, contractors
and subcontractors must comply with
the  cost principles contained in the
Federal  Procurement Regulations (41
CFR  1-15.2 and, if appropriate.  11-
15.4) to determine allowable costs.

0 33.280  Payment to consultants.
   (a)  For all EPA  assistance agree-
 ments, EPA will limit its participation
 in the salary rate (excluding overhead)
 paid to individual consultants retained
 by recipients or by a recipient's con-
 tractors or subcontractors to the maxi-
 mum daily  rate for a OS-18. (Recipi-
 ents  may.  however, pay consultants
 more than this amount.) This limita-
 tion applies to consultation services of
 designated individuals with  specialized
 skills who are paid at a daily or hourly
 rate.  This rate does not Include trans-
 portation  and  subsistence costs (or
 travel performed; recipients will pay
 these in accordance with their normal
 travel reimbursement practices.
  (b) Subagreements  with firms for
 services which are awarded using the
 procurement requirements in this part
 are not affected by this limitation.

 148 FR  12926, Mar. 28, 1983;  48 FR  30364.
.July 1.1983]

 §33.285  Prohibited  types of  subagree-
    menU.
  The     cost-plus-percentage-of-cost
 (e.g..  a multiplier  which  includes
 profit) and the percentage-of-construc-
 tion-cost types of subagreements shall
 not be used.

 fl 33.290  Cost and price considerations.
   (a) The  recipient  shall conduct  a
 cost  analysis of all negotiated change
 orders  and all negotiated  subagree-
 ments estimated to exceed $10.000.
   (b) The recipient  shall conduct  a
 price analysis  of  all formally  adver-
 tised   procurements   estimated   to
 exceed  $10.000 if there are fewer than
 three bidders.
   (c) For negotiated procurement, con-
 tractors  and   subcontractors  shall
 submit cost or pricing data in support
 of their proposals to the recipient.

 133495 Subaffreements awarded by a con-
     tractor.
   A  contractor must comply with the
 following provisions in Its award of su-
 bagreements. (This  section  does not
 apply  to  a supplier's procurement  of
 materials to produce eauipment. mate-
 rials  and  catalog,  off-the-shelf,   or
 manufactured items.)
    (a) 40 CFR Part 32 (Debarment and
 Suspension  Under  EPA  Assistance
  Programs);
    (b) The limitations on subagreement
  award in  S 33.220(a) (1) through (5);
    (c)   The  profit  requirements   in
  (33.235:
    (d) The requirements for small, mi-
  nority, women's and labor surplus area
  businesses in \ 33.240;
    (e) The specification requirements of
  I 33 255*
    (f) The requirements of Subpart C
  of this part, if appropriate;
                                     399

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  (g) The  Federal cost principles in
I 33 275*
   The  prohibited  types of suba-
freements in § 33.285:
  (i) The cost and price considerations
In § 33.290. and
  (j) The applicable subagreement pro-
visions in Subpart F of this part.

          SMALL PURCHASES

§ 33.305  Small purchase procurement.
  If the aggregate amount involved in
any one  procurement transaction does
not exceed $10.000, including estimat-
ed handling and freight charges, over-
head and profit, the recipient may use
small purchase procedures.
  EDITORIAL Norr For Class deviation docu-
ments affecting 133.305.  see the List of
CFR Sections Affected in the Finding Aids
section of this volume.

§ 33.310  Small purchase procedures.
  Small purchase procedures are rela-
tively  simple procurement  methods
that are sound and appropriate for a
procurement of services, supplies or
other property costing in the aggre-
gate not more than $10,000.
  EDITORIAL NOTE For Class deviation docu-
ments affecting 133.310,  see the List of
CFR Sections Affected in the Finding Aids
section of this volume.

0 33.315  Requirements for competition.
  (a) Recipients shall not divide a pro-
curement into smaller  parts  to avoid
the dollar limitation for competitive
procurement.
  (b) Recipients shall  obtain price or
rate  quotations  from  an  adequate
number of qualified sources.

         FORMAL ADVERTISING

S 33.405   Formal advertising procurement
    method.
  (a) The  requirements in  (133.405
through 33.430  apply  to all  formally
advertised  subagreements in excess of
$10,000.  Formal advertising means the
public solicitation of sealed bids and
the award of a subagreement based on
a fixed price (lump sum, unit price, or
a combination  of the two) to the
lowest, responsive, responsible bidder.
  (b) Formal advertising requires at a
  (1) A complete, adequate and realis-
tic specification or purchase  descrip-
tion of what is required;
  (2) Two or more responsible bidders
which are willing and able to compete
effectively for the recipient's business;
  (3) A procurement that lends itself
to the award of a fixed-price subagree-
ment; and
  (4) That the selection of the success-
ful bidder be made principally on the
basis of price.

§33.410  Public notice and solicitation of
   bidi.
  The  recipient  shall give adequate
public notice of the solicitation, invit-
ing bids and stating when and how the
bidding documents may be obtained or
examined.               •          • •

§ 33.415  Time for preparing bids.  ,  ; ,*ft*:

  The recipient must  allow adequate
time  between the  date the, public  ,
notice is first published  and the
by which bids must be submitted.
                                   V '•"•','.."- 5'
§ 33.420  Adequate bidding documents.
  Recipient's bidding documents shall
include:
  (a) A complete statement of work to
be performed including, where appro-
priate, design drawings and specifica-
tions  and  the required performance
schedule;
  (b) The terms and conditions  of the
subagreement to be  awarded, includ-
ing payment, delivery schedules, point
of delivery and acceptance criteria;
  (c) A clear explanation of the  recipi-
ent's  method of  bidding  and  the
method of evaluating bid  prices,  and
Its basis and method for awarding the
subagreement;
  (d) Any other responsibility require-
ments or evaluation criteria which the
recipient  will use  in evaluating  bid-
ders;
  (e) The  prevailing wage determina-
tion, made under the Davis-Bacon Act.
if applicable; and
  (f) The deadline and place to submit
bids and a copy of 133.295. Subparts F
and Q and. if appropriate. EPA Form
5720-4 "Labor Standard Provisions for
Federally  Assisted Construction Con-
tracts."

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(48 FR 12926. Mar: 28. 1983; 48 FR 30364.
July 1.1983]

033.425  Public opening of bids.
  The recipient  shall  publicly  open
bids at the.place, date and time an-
nounced in the bidding documents;

033.430 .Award  to the lowest, responsive,
    responsible bidder.
  (a)  The recipient.shall evaluate  all
bids in accordance with the methods
and criteria in  the bidding documents.
  (b)  The  recipient shall  award  a
fixed-price   subagreement   to   the
lowest, responsive, responsible bidder.
Where specified in the bidding docu-
ments, recipients shall consider factors
such as discounts, transportation costs
and life cycle costs  to determine the
low bid.  Payments discounts may  be
used  to determine the low bid only
when prior experience of the recipient
indicates that it generally accepts such
discounts.
  (c) The recipient may reject all bids
only when it has sound,  documented
business reasons which are in the best
interest of the program for which EPA
assistance  is awarded (see  § 33.250
"Documentation").
      COMF
           'ETJX1VE
NEGOTIATION
§33.505  Competitive negotiation procure-
   ment method.
  (a)  The requirements  In {{33.505
through 33.525 apply to all competi-
tively  negotiated  subagreements in
excess of $10,000.
  (b) Recipients may use competitive
negotiation only if conditions are not
appropriate for the use of the formal
advertising method  of  procurement
(see S 33.405).

0 33.510  Public notice.
  (a) The recipient must give adequate
public notice for competitively negoti-
ated procurements.
  (b) The notice of a request for pro-
posals must state how to obtain associ-
ated documents, including a copy of
§ 33.295, Subparts F and G, the basis
for subagreement award, and, if appro-
priate.  EPA  Form   5720-4  "Labor
Standard Provisions for Federally As-
sisted Construction Contracts."
     *l    t *          ' .
  (c) Requests  for proposals must be
written,  contain  enough  information
to enable a prospective offeror to pre-
pare a proposal, contain air .evaluation
criteria and  the  relative  importance
attached to each, and clearly state the
deadline and place to submit propos-
als.

[48 PR 12926.  Mar. 28. 1983; 48 FR 30364.
July 1.19831

S 33.515  Evaluation of proposals.
  (a) Recipients must uniformly and
objectively evaluate all proposals sub-
mitted in response to the request for
proposals.
  (b) Recipients must base their deter-
minations of  qualified offerers and ac-
ceptable proposals solely  on the eval-
uation criteria stated in the request
for proposals.

633.520  Negotiation  and award of sub*
   agreement
  (a) Unless the request for proposals
states that award may be  based on ini-
tial offers alone, the recipient must
conduct meaningful negotiations with
the best qualified offerers with accept-
able proposals  within the competitive
range, and permit revisions to obtain
best and final  offers. The best quali-
fied offerors must have equal opportu-
nities to negotiate or revise their pro-
posals. During negotiations, the recipi-
ent must not disclose the indentity of
competing offerers or any information
from competing proposals.
  (b)  The  recipient must award the
subagreement  to  the responsible of-
feror whose proposal is determined in
writing to be the most  advantageous
to the recipient,  taking into consider-
ation price and other evaluation crite-
ria set forth in the request for propos-
als.
  (c)  The recipient  must  promptly
notify unsuccessful offerers that their
proposals were rejected.
  (d) The recipient must  document its
procurement file to indicate how pro-
posals were  evaluated,  what factors
were used to determine the best quali-
fied offerers within  the competitive
range, and what factors  were used to
determine the subagreement award.

148 PR 12926. Mar. 28. 1983; 48 FR 30364.
July 1.1983} ,
                                    401

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 33.525 Optional selection  procedure for
   negotiation and  award of •ubapree-
   menti  for architectural  and engineer'
   inr services.
 (a) The recipient may evaluate and
 2lect an architect or engineer  using
 ne procedures in this section in place
 f the procedures in § 33.520, "Negoti-
 tion and award of subagreement."
 
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  (f) The provisions of 5 33.240 "Small,
minority, women's, and labor surplus
area businesses" which:
  (1)  Encourage the  award oi a fair
share  of contracts  to  women's and
labor surplus area businesses;
  (2)  Require the  specific affirmative
action steps In 5 33.240(a)(l) through
(a)(6); however,  nonprofit  organiza-
tions  are required to make positive ef-
forts  to  use small businesses and mi-
nority owned businesses as sources  of
supplies and services;
  (g) Subpart G "Protests."

§ 33.820  Additional  procurement require-
    ment*.
  (a) Recipients must exclude contrac-
tors that develop or draft specifica-
tions,  requirements,  statements  of
work, invitation for bids, or requests
for proposals  from  competing for
awards resulting from the prior effort.
  (b) For all proposed sole source sub-
agreements and where only one bid  or
proposal  is  received,  the  recipient
must request the award official's prior
approval to award the subagreement If
the aggregate expenditure is expected
to exceed $10,000.

       Subpart E—[R«t«rv«d]

Subpart F—Subagr««m«nt Previsions

§33.1005  Applicability and scope of this
    BubparL
  (a) This  subpart applies to all EPA
recipients and describes the minimum
content  of each subagreement (con-
tract and subcontract).
  (b) Nothing in this subpart prohibits
a recipient from requiring more assur-
ances, guarantees, or  indemnity  or
other contractual requirements from
a.ny party to a subagreement.

§33.1010  Requirements for subajreement
    clause*.
  Recipients shall include clauses that
meet  the  requirements of  §533.1015
through 33.1021. and the appropriate
clauses in  § 33.1030, in each procure-
ment subagreement.
8 33.1015  Subagreement. provisions clause.
  Each  subagreement must  include
provisions defining a sound and com-
plete agreement, including the:
  (a)  Nature,  scope,  and extent of
work to be performed;
  (b) Timeframe for performance;
  (c) Total cost  of the subagreement;
and
  (d) Payment provisions.

0 33.1016  Labor standards provisions.
  (This clause applies only when re-
quired by statute.) Recipients shall in-
clude a  copy of EPA Form  5720-4
"Labor Standards Provisions for Fed-
erally  Assisted  Construction  Con-
tracts" in each subagreement for con-
struction (as defined by the Secretary
of Labor).  The form contains the
Davis-Bacon  Act  requirements  (40
U.S.C. 276a—276a-7);  the  Copeland
Regulations (29 CFR Pan 3); the Con-
tract Work Hours and Safety  Stand-
ards  Act—Overtime  Compensation
(940 TJ.S.C. 327-333) and the nondis-
crlmination provisions In  Executive
Order 11246, as amended.
C48 FR12926. Mar. 28. 1983; 48 FR 30365.
July 1.1983]

633.1019  Patents data  and  copyrights
   clause.
  Except, for construction grant sub-
agreements, all subagreements shall
include notice  of  EPA  requirements
and  regulations pertaining  to  report-
ing and patent rights under any suba-
greement Involving research, develop-
mental,  experimental or demonstra-
tion work with respect to any discov-
ery or invention which arises or is de-
veloped in  the conduct of work under
a subagreement. This notice shall also
include EPA requirements and regula-
tions pertaining to  copyrights and
rights in data contained in 40 CFR
Part 30.

6 33.1020  Violating facilities clause.
  Subagreements in excess of $100,000
shall contain a provision  which re-
quires contractor compliance with all
applicable  standards, orders  or re-
quirements issued under section 306 of
the Clean Air Act (42 U.S.C. 1857(h)),
section SOS of the Clean Water Act (33
U.S.C. 1368). Executive  Order 11738.

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and EPA regulations (40 CFR Part 15)
which prohibit the  use under nonex-
empt  Federal  contracts,  grants  or
loans of faculties included on the EPA
List of Violating Facilities.

§33.1021  [Reserved]

§ 33.1030  Model •ubagreement clauses.
  Recipients must include, when  ap-
propriate,  the  following  clauses  or
their equivalent  in  each  subagree-
ment. Recipients  may  substitute other
terms for "recipient  and" "contractor"
in their subagreements.

             1. SvmtscsstOK
  The recipient and the contractor agree
that this  and other appropriate clauses in.
40 CFR 33.1030 apply to  that  work eligible
for EPA assistance  to  be performed under
this subagreement  and that these clauses
supersede any conflicting provisions of this
subagreement.

        2. PRIVITY or SUBACRKTUXNT
  This  subagreement  is  expected  to  be
funded in part with funds from the U.S. En-
vironmental Protection Agency. Neither the
United States nor any of its  departments,
agencies or employees is,  or will be. a party
to this subagreement or any tower tier sub-
agreement. This aubagreement Is subject to
regulations contained In 40 CFR Part 33 in
effect on the date  of the assistance award
for this project.

          3. SUSPENSION or WORK
  The following clause  applies only to con-
struction  rubapreetoenU.  (a) The recipient
may order the contractor in writing to sus-
pend, delay  or interrupt  all or any part of
the work  for such period of time as the re-
cipient may determine to be appropriate for
the convenience of the recipient.
  (b) If the performance of all or any part
of the work is suspended, delayed or inter-
rupted for an unreasonable period of time
by an act of the recipient In administration
of this subagreement.  or by the recipient's
failure to act within the time specified in
this subagreement (or if no time Is specified,
within  a reasonable  time),  the recipient
shall make  an adjustment for any increase
in the cost of performance of this subagree-
ment (excluding  profit)  necessarily caused
by such unreasonable  suspension, delay or
Interruption and  modify the subagreement
in writing. However, no adjustment shall be
made under this clause for any suspension.
delay or interruption to the extent (1) that
performance would have  been so suspended.
delayed or interrupted by any other cause.
including the fault  or negligence of the con-
tractor, or (2) for which an equitable adjust-
ment is provided for or excluded under an>
other provision of this subagreement.
  (c) No claim under this clause shall be al-
lowed (1) for any costs incurred more than
20 days before the contractor notified the
recipient in writing of the act, or failure to
act.  Involved  (this requirement does  not
apply to a claim resulting from a suspension
order), and (2) unless the amount claimed is
asserted in writing as soon as practicable ,
after the  termination of such suspension,
delay or interruption, but not later than the
date of final  payment under the subagree-
ment.                              :

             4. TXMCZNATXON

  (a) This subagreement may be terminated
in whole  or  in  part  In  writing by  either
party in the event of substantial failure by
the  other party to fulfill  Its obligations
under this subagreement through no fault
of the  terminating party, provided that no
termination  may  be  effected unless  the
other party  is given (1)  not less than ten
(10) calendar days' written notice (delivered :
by certified mall, return  receipt requested) .
of Intent to terminate, and (2) an opportune ;
ty for consultation with the terminating
party prior to termination.
  (b) This subagreement may be terminated \
In whole or in part in  writing by the recipi- ?
ent for its convenience,  provided that the
contractor is given (1) not less than ten (10)
calendar days' written notice (delivered by
certified mall, return  receipt requested) of
Intent to terminate, and (2) an opportunity
for consultation with the terminating party
prior to termination.
  (c) If termination for default is effected
by the recipient, an equitable adjustment in
the price provided for In  this subagreement
shall be made, but (1) no amount shall be al-
lowed for anticipated profit on unperformed
services or other work, and (2)  any payment
due to the contractor at  the time of termi-
nation may be adjusted to cover any addi-
tional coste to the recipient because of the
contractor's  default. If termination for  de-
fault is effected by the contractor, or if ter-
mination for convenience is effected by the
recipient, the equitable adjustment shall in-
clude a reasonable profit for services or
other work  performed.  The equitable  ad-
justment for any termination  shall provide
for payment to  the contractor for services
rendered and expenses incurred prior to the
termination, in addition to termination set-
tlement-costs reasonably incurred by tne
contractor relating to commitments whicn
had become firm prior to the termination.
  
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available to the recipient all data, drawings,
specifications, reports, estimates, summaries
and such other  information and materials
as may have  been accumulated by the con-
tractor in performing this subagreement,
whether completed of in process.
  (e) Upon termination  under paragraphs
(a) or (b) above, the recipient may take over
the work and may  award another party a
subagreement to complete  the work under
this subagreement.
  (f) If, after termination for failure of the
contractor to fulfill contractual obligations,
it is determined that the contractor had not
failed to fulfill contractual obligations, the
termination shall be. deemed to have been
for the convenience of the recipient. In such-
event,  adjustment   of  the subagreement
price  shall be made as  provided in para-
graph (c) of this clause.

               S. REMEDIES

  Unless otherwise   provided  in this sub-
agreement, all claims, counter-claims, dis-
putes  and other matters  in  question  be-
tween the recipient and the contractor aris-
ing out of. or relating to. this subagreement
or the breach of it  will be  decided by arbi-
tration if the parties mutually  agree, or In a
court of competent  Jurisdiction within the
State in which the recipient is located.

       6. AUDIT, Access TO RECORDS
  (a) The contractor shall  maintain books,
records, documents  and  other evidence di-
rectly  pertinent  to performance on EPA
funded work under this subagreement in ac-
cordance  with generally accepted account-
ing principles and practices consistently ap-
plied, and 40 CFR Part 30 In  effect on the
date of execution of this subagreement. The
contractor shall also maintain the financial
information and data used In the prepara-
tion or support of  the cost submission re-
quired under 40 CFR 33.290 for any negoti-
ated subagreement  or change .order and a
copy of the cost summary  submitted to the
recipient. The United States Environmental
Protection Agency, the Comptroller Gener-
al of the United States, the United States
Department  of Labor,  the recipient,  and
(the State) or any of their  authorized repre-
sentatives shall have  access  to all such
books, records, documents and other  evi-
dence for the purpose of  Inspection, audit
and copying during normal business hours.
The contractor will provide proper facilities
for such access and Inspection.
   (b) If this Is  a formally advertised, com-
petitively awarded, fixed  price  subagree-
ment, the contractor agrees to make para-
graphs (a) through (g) of  this clause appli-
cable  to  all  negotiated change orders and
subagreement amendments  affecting  the
subagreement price. In the case of all other
 tyocs of  prime  subagreements. the contrac-
tor agrees to make paragraphs (a) through
(g) applicable  to  all  subagreements  he
awards in excess of 110.000, at any tier, and
to make paragraphs (a) through (g) of this
clause applicable to all change orders direct-
ly related to project performance.
  (c) Audits conducted under this provision
shall be  in accordance with generally  ac-
cepted auditing standards and  with estab-
lished procedures and guidelines of the  re-
viewing or audit agency(ies).
  (d) The contractor  agrees to disclose  all
information  and  reports  resulting  from
access to record- under paragraphs (a) and
(b) of this clause to any of the  agencies re-
ferred to in paragraph (a).
  (e) Records under paragraphs (a) and  (b)
above shall be maintained by the contractor
during performance on EPA assisted work
under this subagreement and for the time
periods specified in 40 CFR Part 30. In addi-
tion, those records which relate to any con-
troversy  arising under an EPA  assistance
agreement,  litigation,  the settlement   of
claims arising out of such performance or to
costs or items to which an audit exception
has been taken shall  be maintained by  the
contractor for the time periods specified in
40 CFR Pan 30.
  (f) Access to records is not limited to  the
required retention periods. The authorized
representatives designated in paragraph (a)
of this clause shall have access to records at
any  reasonable time for  as long as  the
records are maintained.
  (g) This right of access clause applies to fi-
nancial records pertaining to all subagree-.'
ments (except formally advertised, competi-
tively awarded, fixed price subagreements)
and all subagreement change orders regard-
less of the type of subagreement. and all
subagreement  amendments regardless of
the  type of subagreement. In addition  this
right of access applies to all records pertain-
ing  to  all  subagreemenU. subagreement
change  orders  and  subagreement amend-
ments:
   (1) To the extent the records  pertain di-
rectly to subagreement performance:
   (2) If there .is any indication that fraud.
gross abuse or corrupt practices  may be in-
volved; or
   (3) If the subagreement  is terminated for
default or for convenience.

   7. CovcHAirr AGAJKST CotmMcorr PECS
   The contractor  assures that  no person or
 selling agency has  been  employed or re-
 tained to solicit or secure this subagreement
 upon an agreement or understanding for a
 commission, percentage, brokerage or  con-
 tingent fee excepting, bona fide employees
 or bona- fide established commercial or sell-
 ing agencies maintained by the contractor
 for the purpose  of  securing  business. For
 breach or violation of this assurance, the re-

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ciplent  shall have the right to annul this
agreement without liability or, at its discre-
tion, to deduct from the r ".bagreement price
or consideration, or otherwise  recover the
full amount of such commission, percent*
age, brokerage or contingent fee,

              8. GRATUITIES

  (a) If  the recipient findt  after a notice and
hearing that the contractor or  any of the
contractor's agents  or  representatives  of-
fered or gave gratuities (in the form of en-
tertainment, gifts or otherwise) to any offi-
cial, employee or agent of  the recipient, the
State or EPA in an attempt to secure a sub-
agreement or favorable treatment in award-
Ing,  amending  or making any  determina-
tions  related to the performance of this su-
bagreement. the recipient may, by written
notice to the contractor, terminate this sub-
agreement The recipient  may  also pursue
other rights and remedies thai the law or
this  subagreement provides. However, the
existence of the facts on *  iiich the recipient
bases such findings  shaii be in issue and
may be reviewed in proceedings under the
Remedies clause of this sr bagreement.
  (b) In the event this su.agreement is ter-
minated as provided in -  .ragraph (a), the
recipient may  pursue tue  same  remedies
against  the contractor as  it could pursue in
the event of a breach of  the subagreement
by the contractor, and as a penalty, in addi-
tion to  any other damages to which it may
be entitled by law, be entitled to exemplary
damages in an amount (fe. determined by
the recipient) which shall be not less than
three nor more than ten times the costs the
contractor incurs in providing any such gra-
tuities to any such officer  or employee.

    9. Responsibility o/ the Contractor

  (a)  The following clause applies only to
subagreements for services. (1) The contrac-
tor is responsible for the  professional qual-
ity, technical accuracy, timely  completion
and coordination of all designs, drawings,
specifications, reports and   other  services
furnished by the contractor under this sub-
agreement. If the subagreement involves en-
vironmental measurements or data genera-
tion,  the contractor shall  comply with EPA
quality  assurance requirements in 40 CFR
30.503.  The contractor shall, without addi-
tional compensation, correct or revise any
errors, omissions or other deficiencies in his
designs, drawings,  specifications, reports
and other services.
  (2)  The contractor shall perform the pro-
fessional services necessary to accomplish
the work specified in this subagreement in
accordance with this subagreement and ap-
plicable EPA requirements in effect on the
date  of execution of the assistance agree-
ment for this project.
  (3)  The  owner's  or EPA's  approval of
drawings,  designs,  specifications, reports
and incidental work or materials furnished
hereunder shall not in any way relieve the
contractor  of responsibility for the techni-
cal adequacy  of his  work. Neither  the
owner's nor EPA's review, approval, accept-
ance  or  payment for any of  the services
shall be construed as a waiver of any  rights
under this agreement or of any cause for
action arising out of the performance of this
subagreement.
  (4)  The  contractor shall be.  and  shall
remain, liable in accordance with applicable
law for all damages to the owner or EPA
caused by  the contractor's negligent  per-
formance of any of the services furnished
under this subagreement. except for errors.
omissions or other deficiencies to the extent
attributable to tni  owner,  owner-furnished;
data  or  any third  party.  The contractor
shall not be responsible for any time  delays
in the  project caused  by circumstances
beyond the contractor's control.           :
  (5) The contractor's obligations under this
clause are  in  addition to  the contractor's
other express or implied assurances, under
this subagreement or State law and in not
way  diminish any  other  rights  that the
owner may have against the contractor for,
faulty materials, equipment or work.
  (6)  The following clause applies only to
subagreements  for  construction,  (1)  The
contractor agrees to perform all work under
this subagreement in accordance  with this
agreement's designs, drawings and specifica-
tions.
  (2) The contractor guarantees for a period
of at least one (1) year from the date of sub-
stantial completion of the work that the
completed work is free from all defects due
to faulty materials,  equipment or workman-
ship and that he shall promptly make what-
ever adjustments or corrections which may
be necessary to cure any defects, including
repairs of any damage to other parts of the
system  resulting from  such defects.  The
owner shall promptly give notice to the con-
tractor  of  observed defects. In the  event
that  the contractor fails to make adjust-
ments,  repairs, corrections or  other work
made necessary by  such defects, the owner
may  do  so and charge the contractor the
cost incurred. The  performance bond shall
remain in full force and effect through the
guarantee period.
  (3) The contractor's obligations under this
clause are in addition to the contractor's
other express or Implied assurances  under
this subagreement  or State law and in no
way  diminish  any other  rights that  the
owner may have against the contractor for
faulty materials, equipment or work.

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           10. FINAL PAYKXKT
  Upon satisfactory completion of the work
performed under this subagreement. as a
condition before final payment under this
Bubagreement or as a termination settle*
ment under this subagreement the contrac-
tor shall execute and deliver to the owner a
release of all claims against the owner aris-
ing under, or by virtue of, this subagree-
ment. except claims which are specifically
exempted by the contractor to be set forth
therein. Unless otherwise  provided in this
subagreement, by State law or otherwise ex-
pressly agreed to by the parties to this sub-
agreement, final payment under  this sub-
agreement or settlement upon termination
oi this subagreement shall not constitute a
waiver  of the owner's claims against  the
contractor or  his sureties under  this sub-
agreement or applicable performance and
payment bonds.
(48 FR 12926. Mar. 28, 1983; 48 FR 30365,
July  1. 1983, as amended at  53 FR 8077.
Mai. 11.1988]

         Subporl G—Protostt

§33.1105  Applicability and scope of this
   subpart.

  This subpart sets forth EPA's  ad*
ministrative process for the rapid reso-
lution of protest appeals filed with the
award official.

§ 33.1110  Recipient protest procedures.
  (a) Recipients  must  establish their
own procedures  for prompt consider-
ation  of  initial  protests  concerning
their  solicitations  or  subagreement
awards. A "protest" is a written com-
plaint concerning the recipient's solici-
tation or award of a subagreement. It
must be filed with the recipient by a
party with  a direct financial interest
adversely affected by a recipient's pro-
curement    action   (see    {33.1130
"Review of protest appeal").
  (b) The recipient should review each
protest received to determine whether
it is appropriate to defer the protested
procurement action.
  (c) If the recipient  does not defer
the  procurement  action,  it  assumes
the  risk that the award official may
disallow the cost of the protested, pro-
curement action if the protest Appeal
is upheld.                   .

    FR 12926. Mt*. 28. 1983;  48 FR 30365,
     1. 1983]
933.1115  Protest appeal.
  (a) A party with a financial interest
which is adversely affected by the re-
cipient's decision on the-initial protest
may file a "protest appeal" with the
award official.
  (b)  A "protest appeal" is a  written
complaint filed with the award official
regarding the  recipient's  determina-
tion of a protest.

§ 33.1120  Limitations on protest appeals.
  (a)  The  award official shall not
accept a protest appear until the pro-
tester has exhausted all administrative;
remedies at the  recipient level.
  (b) A protest appeal is limited to the
following:
  (1) Issues arising under the procure-
ment provisions of this part, or
  (2)  Alleged violations  of State  or
local  law  or ordinances  where the
award official determines that there is
an overriding Federal requirement.
  (c)  A recipient  of a'lower tier sub-
agreement (subcontract) may only file
a  protest   appeal  for  issues  which
relate to the award of a subagreement
by  a contractor (see 133.295 "Suba-
greements awarded by a contractor").

§33.1125  Filing requirements.
  (a)  Protest appeals  must  be filed
with  the Assistant General Counsel
for Grants for  headquarters-awarded
assistance  agreements and with the
Office of Regional Counsel for region-
ally awarded assistance agreements.
  (b) A protest appeal must:
  (1) Be written;
  (2)  Include a  copy of the recipient's
determination of the protest;
  (3)  State the basis for the appeal;
and
  (4)  Reques^a determination  under
this subpart.
  (c) Upon filing a protest appeal with
the Regional  Counsel. or Assistant
General Counsel for Grants, as appro-
priate, the  party filing  the  protest
appeal must concurrently transmit a
copy  of all protest documents and any
attachments to  all other parties with a
direct financial  interest which may be
adversely affected by the determina-
tion of the protest appeal.
  (d) The award official will only con-
sider written protest appeals received
                                     407

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by the  appropriate  Counsel's office
within seven calendar days after the
adversely affected party receives the
recipient's determination  of protest.
However, the adversely affected party
can meet the seven-day notice require-
ment  by  telegraphing  the  Counsel
within the seven-calendar-day period
of its intent to file a protest  appeal,
provided the adversely affected party
submits  a  complete  protest  appeal
within seven calendar days of the date
it sends  the telegram. If the seventh
day falls on  a Saturday.  Sunday or
holiday, the next working day shall be
the  last  day to  submit  a  protest
appeal.
  (e) Any party which submits  a docu-
ment to the award official during the
course of a protest appeal must simul-
taneously furnish  all other affected
parties with a copy of the document.
(48 FR 12926. Mar. 28, 1983; 48 FR 3036S.
July 1.1983]

§ 33.1130  Review of protest appeal.
  (a) If the recipient does  not  receive
the initial protest before bid opening
or the closing date for receipt  of pro-
posals, the award  official may  dismiss
as untimely any protest appeal based
upon alleged improprieties in the solic-
itation which  were clearly apparent
before bid opening or before the dead-
line for receipt of initial proposals. In
negotiated procurements,  protests of
alleged improprieties which were  in-
corporated in a new solicitation must
have been received by the recipient by
the closing date for receipt of propos-
als for the new solicitation.
  (b) In cases not involving impropri-
eties in the solicitation, the award offi-
cial may dismiss as untimely a protest
appeal if the  adversely affected party
did not file the initial protest with the
recipient  within seven calendar days
of the date the basis for  the  protest
was known   or   should  have  been
known, whichever is earlier.

§ 33.1140  Deferral of procurement 'action.
  When the  award official receives a
protest appeal and the recipient has
not deferred  the  procurement action
under  $33.1110(t», the award  official
must promptly request that the recipi-
ent defer the protested procurement
action until the award official  notifies
the recipient of the formal or informal
resolution of the appeal, The request
shall be limited to the  award of th
subagreement or subitem which is th
basis of the protest appeal.

933.1145  Award official's review.
  (a) The award official may establish
rules of procedures or  deadlines for
the submission of materials or the ar-
rangement of protest appeal  confer-
ences.
  (b) The award official may summari-
ly dismiss an appeal without proceed-
ings under this subpart if:
  (1) The protest  appeal is not re-
viewable, see ft 33.1130,  or addresses
issues other than those allowed under
ft 33.1120(b);
  (2) The protester substantially fails
to comply with the procedural require-
ments of this subpart; or
  (3) The protester does not agree to
the recipient's request for a reasonable
extension of the bid and bond period.
  (c) The award official may summari-
ly deny a protest appeal without pro
ceedings under  this subpart If, afte
considering the  facts in a light most
favorable to the protester, the award
official believes that the protest lacks
merit.
  (d) The award official will give both
the recipient and the protester, as well
as any other party with a financial in-
terest which may be adversely affected
by the determination of protest, an op-
portunity to present arguments in sup-
port of  their views in writing or at a
conference.
  (e) After the announced date for re-
ceipt of written arguments, the, record
shall be closed.
  (f) The award official shall review
the record considered by the recipient
and any other documents  or argu-
ments presented by the  parties to de-
termine  whether  the recipient  has
complied with  the  procurement re-
quirements of this part and has a ra-
tional basis for its  determination of
protest.
  (g) The award official's determina'
tion shall constitute final EPA action
from which there shall  be no  further
administrative appeal. No party may
appeal  an award official's determina-

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 tion of appeal to the EPA Board of As-
 sistance Appeals.
  (h)  Nothing  in  this  subpart  pre-
 cludes the award official from review*
 ing the recipient's procurement action.
 (See §33.115.)
  (i) Noncompliance with  the  award
 official's  determination  of   protest
 shall  be cause  for  an action  against
 the recipient under 40 CFR Part 30 or
 32.
   If an appeal involves legal issues
 not explicitly addressed  by  this part,
 the award official  shall resolve  the
 issue by referring to other protest de-
 terminations under this section  and
 decisions of the Comptroller  General
 of the United States or of the Federal
 courts  addressing   Federal   require-
 ments comparable to procurement re-
 quirements of this part.
newspapers, or publications of general circu-
lation over a reasonable area for at least 30
days before bid opening.

Jwi T° f,°mJ?ly wltn * 33-5l°- "Adequate
public  notice." the recipient  must publish
the notice In professional journals, newspa-
pers, or. publications of general circulation
over a  reasonable area for at least 30 days
before  the deadline for receipt of proposals.
The recipient may use posted public notices
or written notification directed to interested
persons, firms or professional organizations.

                  28t 1983; 48 FR 30365>
  EDITORIAL Now: For Class deviation docu-
ments affecting Part 33.  Appendix A. see
the List of CFR Sections Affected in the
Finding Aids section of this volume.
APPENDIX   A—PROCEDURAL  REQUIRE-
    MENTS  roR RECIPIENTS  WHO Do
    NOT CERTIFY  TKZIR PROCUREMENT
    SYSTEMS,  OR FOR  RECIPIENTS  WHO
    HAVE THEIR PROCUREMENT CERTIFI-
    CATIONS REVOKED BY EPA

  (a) The following procedural requirements
apply to recipients who:
  (1) Do not certify to EPA that their pro-
curement system meets the minimum pro-
curement requirements in this part, or
  (2) Have their procurement certification
revoked by the award official, as stated  in
i 33.115(0.
  (b) Those recipient* must comply with the
requirements in this pan plus the following
procedural requirements. These procedural
requirements supplement the requirements
in the sections cited.
  U) To comply with  133.250. "Documenta-
tion," the recipient  must submit to the
award official, unless he instructs otherwise.
the records required by this section.
  <2> To comply with 133.290. "Cost and
price considerations." the  recipient's con-
tractors and  subcontractors  must submit
their cost or price data on EPA Form 5700-
41.  "Cost or Price Summary Format for
Subagreements Under U.S. EPA Grant*."  or
m another format which provides informa-
tion similar to that required by EPA Form

  (3> TO comply with 133.415, "Time for
Preparing bids." the recipient must allow at
•east 30 days between the date when it first
Publishes the public notice and the date  by
*V?ch bids must be submitted.
  ««> To comply with I 33.410. "Public notice
  «  solicitation of bids." the recipient must
        the notice in professional journals.

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           APPENDIX G
   40 CFR PART 40, "RESEARCH AND
     DEMONSTRATION GRANTS"
40 CFR PART45, "TRAINING ASSISTANCE"
    40 CFR PART 46, "FELLOWSHIP
           ASSISTANCE"

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             Unirad Stint .
             Environmtniil Protection
             Agmcv
             Grtnti Admininrrtion
             Divi»ion (PM-216)
             Wnhington, DC 20460
EPA GAO/10-80-1
June I960
&EPA
Interim Regulations
and Procedures
Applicable to
                        Research
                        and
                        Demonstration
                        Grants

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    Table   of    Sections
     PACT 40-tISIAICH AND
     MMONSTXATION GIANTS
       PurpOM of mutation.
«0.100
40.109
40.110  Authority.
40.119  DtfUUUoa*
        Construction.
        InUrmunicipal t
40.119-1
40.119-2
40.119-3  Interstate anaey.
40.119-4  MunetpalUty.
40.119-9  Penan.
40.119-4  State.
40.120  PublleaUoB of EPA rcMareh
   ttVML
40.129  Grant limitation.
40.129*1  Limitation* on duration.
40.125-2  Limitation* on aMiuance.
40.130  CUrfbUlty.
40.139  Application.
40.139-1  Pieapptkatloa coordination.
40.139-2  AppUcation rtqulnoumta.
40.140  Criteria tor award.
40.140-1  All appllcaUona.
40.140-3  Utcatnrtd]
40.140-3  Fwtend Water Pollution Q«ttal
   Act.                       '
40.149  8uppl
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                                                                                                           540.115-1
These
                rofngulaUML
            provision*   establish
and
  codify policies and procedures govern-
  ing the award of research and demon-
  stration grant* by the Environmental
  Protection Agency.

  §«.!«  AwlkaMllty and scope,
    This  part  establishes  mandatory
  policies and procedures for all EPA re-
  search and demonstration grant*. The
  provisions of this pan supplement the
  EPA  general  grant regulations  and
  procedures (40 CFR Part 30). Accord-
  ingiy. all  EPA research and demon-
  stration grant* are awarded subject to
  the EPA interim general grant regula-
  tions and procedures (40 CFR Pan 30)
  and to the applicable provisions of this
  Part 40.

  140.119 Aatlwifty.
   EPA research and  demonstration
  grant* are authorized under the fol-
  lowing statutes:
   (a) The Clean Air Act. a* amended.
  42 VAC. 1857 et seq.
   (1) Section 103 (42 VAC. 1857b) au-
  thorizes grant* for research and dem-
  onstration  projects relating to  the
  causes, effect*, extent, prevention, and
  control of air pollution.
      Section 104 (42 VAC. 1857b-l)
     tjortzes grant* for research and de-
    bpment of new and improved meth-
     for the prevention and control of
  air pollution resulting from the com-
  bustion of fuels.
   (b) The  Federal  Water Pollution
  Control Act. as amended. Pub. L. 92-
  500.
•  (1) Section 104(b> (33 U.S.C. 1254 (33 VAC. 12S4(r))
 authorized  grant* for the conduct of
 baste research into the structure  and
         of freshwater aquatic ecosys-
      and to Improve understanding of
        »iogicai  characteristics neces-
     to the maintenance of the chemi-
 cal, physical, and biological integrity
 of freshwater aquatic i
   (5) Section 104(s) (33 VAC. (s» au-
 thorizes grant* to conduct and report
 on Interdisciplinary studies on river
 systems, including hydrology, biology,
 ecology,  economics, the  relationship
 between river uses and land uses, and
 the  effect*  of  development  within
 river basins on  river systems and on
 the  value of water  resources  and
 water-related activities.
;. .(6) Section  10S(a) (33 VAC. 1295(a))
 authorises grant*  for research  and-
 demonstration of  new  or improved
 methods for preventing, reducing, and
 eliminating  the  discharge into  any
 waters  of  pollutants from  sewers
 which  carry  storm  water  or both
 storm  water  and pollutants: and  for
 the demonstration of advanced waste
 treatment  and  water  purification
 methods (Including the temporary use
 of new or improved chemical additives
 which  provide substantial Immediate
 improvement  to existing  treatment
 processes), or new or improved meth-
 ods of Joint treatment systems for mu-
 nicipal and industrial wastes.
   (?) Section lC5(b) (33 VAC. 1255(b))
 authorizes grants for  demonstrating.
 in river basins or portions thereof, ad-
 vanced treatment and  environmental
 enhancement  techniques  to  control
 pollution from all sources, within such
 basin or  portions thereof. Mm'"4inf
 nonpoint  sources, together  with  IB-
 stream  water  quality improvement
 techniques.
   (8) Section 105(c) (33 VAC. 125Vc)>
 authorizes grant*  for  research  and
 demonstration project* for prevention
 of pollution of any waters by Industry
 Including, but not limited to. the pre-
 vention, reduction, and elimination of
 the discharge of pollutant*.
   (9)  Section  105(eXl>  (33  VAC.
 l2S5 Section 113 (33 UAC. 1363) au-
  thorizes grants for project* to demon-
  strate methods to provide for central
  community facilities for safe water
  and elimination or control of pollution
  In those native villages of Alaska with-
  out such facilities.
   (0 The Public Health Service Act. as
  amended. 42 VAC. 241 et seq.
   (1) Section 301  (42 VAC. 241. 2420,
  and 246)  authorizes gnats  for re-
 search relating to the human and en-
 vironmental effect* of radiation.
   (d) The Solid Waste Disposal Act. as
 amended, by the Resource  Conserva-
 tion «nd  Recovery Act  of 197i  (42
 VAC. 0901 et seq.).
   (1) Section S001 (42 UAC. 6981) au-
 thorizes grant* for research and dem-
 onstration  projects relating to  solid
 waste.
   (2) Section 80M (42 VAC, «984) au-
 thorizes mat* for  demonstration of
 new or improved  technologies for re-
 source recovery.   .
   (3) Section 8006 (43 VAC. 6989) au-
 thorises  grants   to  conduct  special
 studies and demonstration projects on
 recovery of useful energy and mat
                                               (4) Section 8008 (42 U.S.C. «980) au-
                                              thorizes grants for the demonstration
                                              of resource recovery system or for the
                                              construction of new or improved solid
                                              waste disposal f acuities.
                                               (e) The  Federal  Insecticide. Fungi-
                                              cide. and Rodentidde Act. as amended.
                                              PUB. L> 92-614.
                                               (1) Section 20 authorises  grant* for
                                              research In the pesticides areas with
                                              priority  given tc the development of
                                              biologically Integrated  alternatives for
                                              pest control.
                                               (f> The Grant Act. 42 U.S.C. 1891 et
                                             sea, authorizes grants  for basic scien-
                                              tific research.
                                             tss m Krai tear u. im. M
                                             43 PR MOM. Oct. 10. 18TH
  The  statutes identified In  1 40.no'
contain definitions  which are not all
repeated here. The following terms
shall  have  the  meaning  set forth
below:

(42 FR MOM. Oct. JO. tiTTi
                                       I4CI1S-1
                                        May  include the  preliminary plan-
                                       ning to determine the economic  and
                                       engineering feasibility of a faculty. tiv
                                       engineering, architectural, legal, f do
                                       sod economic Investigations and ituu
                                       ies. surveys, designs,  plans, working
                                       drawings,  specifications, procedures,
                                       and other action necessary to the con-
                                       struction of a facility, the erection, as-

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                                                                                                         140.130
or' •'{on.  alteration,  remodeling.  Im-
p    sxent. or extension of a facility.
aiw »he inspection and supervision of
the construction of a f scillty.

|4«.n$-2  InUrmuiiWpaJ tfeney.
  (a)  Under  the  Clean Air  Act.  an
agency of two or  more municipalities
located in the same State or in differ-
ent  States and  having  substantial  .
powers or duties pertaiainc to the pre-
vention and control of air pollution.
    Under  the  Resource Conserva-
tion and Recovery Act. an agency  es-
tablished  by two  or  more municipal-
ities with  responsibility for planning
or administration of solid waste.
   In all other resit, an agency of
two or more municipalities having sub-
stantial powers or duties pertaining to
the control of pollution,
WS PR mS4, May 18. im, at amended at
42 PR MOM, Oct. 20.1977}

I48.I1S-3  Interstateagency.
  (a)  Under  the  Clean Air  Act,  an
agency established by two or more
States, or  by two or  more municipal-
ities located In different States, having
substantial powers or duties pertain*
ing to the prevention and control of
air pollution.
  (b) Under the Federal Water Pollu-
tion Control Act. an agency of two or
mr-- States established by or pursu-
ai     '.an agreement or compact  ap-
pn.  ,j by the Congress or any other
agency of two or more Stales, having
substantial powers or duties pertain*
ing  to the control  of pollution  of
waters.
   In  all other cases, a city, town.
 borough,  county, parish, district, or
.other public body created by or pursu-
 ant to State law. or an  Indian tribe or
 an authorized Indian tribal organiza-
 tion, having  substantial powers  or
 duties pertaining to the control of pol-
 lution.
 CM PR 127*4. May IS. 1*73. as
 42 PR MOM. Oct. 20.19771

 148.115-4  Person.

  (a) Under the Federal Water Pollu-
 tion Control Act. an individual, corpo-
 ration, partnership, association. State.
 municipality, commission,  or political
 subdivision of a State,  or any inter-
 state body.
  (b) Under the Resource Conserva-
 tion and Recovery Act. an individual.
 trust, firm. Joint stock company, cor-
 poration (including a government cor-
 poration),   partnership,   association.
 State, municipality, commission, polit-
 ical subdivision of a State, or any  in-
 terstate body.

 CM PR 127S4. May I*. 1973. at amended at
 42 PR 54097. Oct. 20.1977]

 §40,115-4  Slate.
  fa) Under the Federal Water Pollu-
 tion Control Act a State, the District
 of  Columbia, the  Commonwealth  of
 Puerto   Rico,   the  Virgin   Islands.
 Guam.  American  Same*,  and the
 Trust Territory of the Pacific Islands.
  (b) Under the Resource Conserva-
 tion and  Recovery Act. a State, the
 District of Columbia,  the Common-
 wealth of Puerto Rico, the Virgin  Is-
 lands. Guam. American Samoa, and
 the Commonwealth of the Northern
 Mariana Islands.              *
  (c)  In all other eases, a State, the
 District of Columbia,  the Common-
 wealth of Puerto Rico, the Virgin  Is-
      OtlemQl aVTsti AXBATaCaUl SsUOOL
142 PR 58057. Oct. 28.19771

148.120  Poalkallos) «/ tPA research ok-
   jecthres.
  The Office of Research and Develop-
ment of EPA publishes - statement of
research objectives and priorities an-
nually in a document entitled "Office
of Research and Development—Pro-
gram Guide." This document may be
obtained from either the Office of Re-
search and  Development RD-474. or
the  Grants  Adrnlntitrtt1rtt*  Division.
PM-216. UA environmental Protec-
tion Agency. Washington, D.C. 20480.
142 PR 54087. Oct. 20.1*771
    140.128  Gram limitations,

    148.125-1  Limitations on duration.
      (a)  No  research  or demonstration
    grant shall be approved  for a budget
    period in excess of 2 years except dem-
    onstration grants involving construc-
    tion.
      (b)  No  research  or demonstration
    grant shall be approved  for a project
    period in excess of 9 years.
      (c> The .grant award  official  may
    extend the budget and project periods
    for up  to an additional 12 months
    without additional grant funds, when
    such extensions are in the best Inter-
    est of the Government
at  142 PR 98057. Oct. 20.19*171
    148.125-2 limitation* on astittance.
      In addition to the  cost-sharing re-
    quirements  pursuant  to  40  CFR
    30.720.  research  and demonstration
    grants shall be governed by the specif-
    ic assistance limitations listed below:
      (a) federal  Water Pollution  Control
    Act  (1) Section 104(s>—no grant IB
    any fiscal year may exceed $1  million.
      (2) Sections 105 Clean Air Act. (1) Section  104—no   f
    grant may exceed 81.SOO.OOO.
      
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                                                                                                        §40,140-1
lULijL
          and  Institutions;  private
        and Institutions; and Individ-
              8004 and 8005. public
              authorities  or private
  (2)  Section
agencies and
persons.                 - •
  (3)  Section 8008,  State, munblpal.
intonate or intermunicipal agencies.
  (4) No grant may be made under this
Act to any private profit-making orga-
nization.
  (e)  The Federal Insecticide, Fungi-
cide, and Rodentidde Act, as amend-
ed—other Federal agencies,  universi-
ties, or others as may be necessary to
carry out the purposes of the act
  (d)  The  Federal  Water Pollution
Control Act as amended:
  (1) Section 104—colleges and uni-
versities.
  (4)  Section  104(s>-Instltutlons  of
higher education.
  (ft)  Sections 108(a).  105-8tate or States or
         iagency.  •
         tons  10S—

  (8)  Section 108—State, political sub-
division, interstate  agency,  or other
public agency, or combination thereof.
  (9) Section 113—only to the State of
Alaska.
  (e) The Public Health Service Act. as
amended—only to nonprofit  agencies.
institutions, organizations, and to indi-
viduals.
(31 PR 13784. May 13.  1973. at amended at
40 PR 30083. May 8.1979; 43 PR 94097. Oct.
30.19771
1 49.138
I48.13S-1
   Att applicants. (1) Applicants for
research and demonstration granu are
encouraged to contact EPA for further
information  and titlrtincf  prior  to
submitting a formal application. The
EPA regional office or the laboratory
nearest the applicant  will be able to
provide such assistance or to refer the
applicant  to an appropriate EPA rep-
resentative.
  (2) Applicants shall prepare an envi-
ronmental assessment of the proposed
project where applicable, outlining the
anticipated impact  on  the  environ-
ment pursuant to 40 C7R. Pan 8.
               tUm ffranti. All appll-
      |[or  demonstration grants must
   _   with  all applicable require-
menu  of  Office of Management and
Budget (OMB) Circular No. A-95  as
revised, see 1 M J08 of this subchapter.
   (c) Applications for grants for dem-
 onstration projects funded  by the
 Office of Solid Waste will be solicited
 through the Department of Commerce
 Business Daily, and selections will be
 made on a competitive basis.
 (38 PR 11784. liar ». 1973. at amended at
 41 PR 30659. May 30. 1976; 43 PR MOS7.
 Oct. M. ism

 140.135-2  tsvlieatioe, nqoinsMaU.
   All  applications  for  research  and
 demonstration grants shall be submit-
 ted in an original and 8 copies to the
 Environmental  Protection  Agency.
 Oranta    Administration     Division.
 Washington. D.C. 20480. In accordance
 with || 10.315 through 30.315-3.
   (a) Afflieatiotu  involving Attman
 nttrfrcU  (1) Safeguarding  the rights
 and  welfare  of human subjects In-
 volved in  projects supported by EPA
 grants is the responsibility of the Insti-
 tution which receives or Is accountable
 to EPA for the funds awarded for the
 support of the project.
   (2) Institutions must submit to EPA.
 for review, approval, and official ac-
 ceptance.  a written assurance of its
 compliance with guidelines established
 by Department of Health.  Education.
 and Welfare concerning protection of
 human subjects. However. Institutions
 which have submitted and  have had
 accepted, general assurance to DREW
 under these guidelines will be consid-
 ered as being in compliance with this
 requirement These guidelines are pro-
 vided in DHEW Publication No. (NIB)
 72-102.  the "Institutional  Guide to
 DHEW Policy on Protection of Human
 Subjects." Copies of this  publication
 are available from the Superintendent
 of Documents.  U.  & Government
 Printing  Office.   Washington.  D.C.
 30430.
   (3) Applicants  must  provide with
 each proposal involving human sub-
 jects a certification that It has been or
 will be  reviewed  In accordance with
 the institution's assurance. This • erti-
 ficaUon must be renewed annually on
 the basis of continuing  review of the
 supported project.
   (b) Apflieationt  involving  labora-
 tory  animals.  Each application for a
•project  Involving the  use of  warm-
 blooded animals shall include a writ-
 ten assurance that  the  applicant has
 registered with the Department of Ag-
 riculture and Is In compliance with the
 rules, regulations, and standards enun-
 ciated In the Animal Welfare Act, Pub.
 L. 89-554. as amended,
   (O Nottct of research projtct (JVJtP).
 Each application for research must in-
 clude a  summary (NRP) of proposed
 work (300 words or less) incorporating
 objectives, approach and current plans
 and/or progress. Upon approval of an
 application, summaries are  forwarded
 to the  ffHilthifMiinit Bphtpnt Informa-
 ment and private agencies supportlc
 research and an forwarded to Invest
 gators who request such information.
  (d) federal Water Pollution Control
 Act. (D  All applications for grants
 under section  105(a) must have been
 approved  by  the  appropriate State
 water  pollution  control  agency  or
 agencies.             ...
  (3) All applications for grants under
 section 107. where the proposed proj-
 ect will be lo-ated In the  Appalachian
 region, shall have  been  coordinated
 with the  Appalachian Regional Com-
 mission for  determination that such
 demonstration   project Is consistent
 with the objectives of the  Appalachian
 Regional Development Act of 1985. as
 amended.

 (3fl PR 13794. May 13.  1973. at amended at
 40 PR 30093. May 8.1975; 43 PR 9*097. Oct.
 30.1977]

 149.149 Criteria tor award.
  In determining the desirability and
 extent of funding for a project and the
 relative merit  of an application, con-
 sideration  will  be given to the follow-
 ing criteria:
                                                                               149.149-1
                                                                                 (a) The relevancy of the proposed
                                                                               project to the objectives  of the EPA
                                                                               research and demonstration program:
                                                                                  The t***"'*** feasibility of  the
                                                                               project:
                                                                                 (d] The seriousness, extent,  and ur-
                                                                               gency of the environmental problems
                                                                               toward which the project is directed:
                                                                                 (e) The anticipated public  benefits
                                                                               to be derived from the project in rela-
                                                                               tion to the coats of the project;
                                                                                 (f)  The competency  of the appli-
                                                                               cant's staff  and the adequacy of  the
                                                                               applicant's facilities and available re-
  (g) The degree to which the project
can be expected  to produce results
that will  have general tprllntfftB to
pollution control problems nationwide:
   Whether the project la consist*
ent with existing plan* or ongoing
planning  for the  project area at  the
"at* regional, and local levels;
 tion Exchange. Summaries of work hi
          are  exchanged with
  (1) The erlstenee and extent of local
public support for the project:
  (j) Whether the proposed project is
environmentally sound;
  (k) Proposed cost sharing.

149.149-t (iritsnisl

I49J49-8 Peasnl Water PettatfM CM.
   treiAflt.
  (a) AH applications for grants under
section  10MO must provide evidence
that the proposed project will contrib-
ute to the development or demonstra-
tion  of a new or Improved method of
treating Industrial wastes or otherwise
preventing   pollution   by   industry.
which method shall have Industrywide
application;

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                                                                                                         §40.150
  (b) All applications for mots under
•ectioo 113 must include provisions for
community safe water supply systems.
toilet bathing and laundry facilities.
sewage   disposal  facilities  and  pro-
grams relating to health and hygiene.
Such projects must also be for the fur-
ther  purpose of developing  prelimi-
nary  plans for providing  such safe
water and such elimination or control
of water pollution for all  native vll-
lages in the State of Alaska.

144.141  SuBvknciital gnat conditions.
  In addition to the EPA general gnat
conditions (40 CFR. Part 30.  Subpart
C), all grants are awarded subject to
the following requirements:
  (a) The project will be conducted In
an environmentally sound manner.
  (b> In  addition to the notification of
project changes required pursuant to
40 CFR 30.900, prior written approval
by the grant* officer is  required  for
project changes which may (1) alter
the approved scope of the project. (2)
substantially  alter the design of the
project, or <3> increase the amount of
Federal funds needed to complete the
project. No approval or disapproval of
a project change pursuant  to 40 CFR
30.900 or this section shall commit or
obligate the United States to an lu-
cre     i the amount of the  grant or
pa>     .ts thereunder,  but. shall not
preclude submission or consideration
of a request  for a grant amendment
pursuant to 40 CFR 30.900-1.
CM FR 11794. May ». 1971. M
40 FR 3COM. May a. 19791
  Programs for which a Federal grant
 is awarded by the Environmental Pro-
 tection Agency to a State, municipal.
 interstate or intermunicipal agency, or
 to any public authority, agency or in-
 stitution, under the Resource Conser-
 vation and Recovery Act. shall  be. the
 subject of public participation consist-
 ent with Pan 349 of this chapter.
 (43 FR MOS7. Oct. SO. 19771

 } 46.146-1 Federal Water PeJfatiea Cen-
    tral Act.
   (a)  No person  in  the United States
 shall  on the ground of sex be excluded
 from  participation  to. be denied the
 benefiu of, or be subjected to discrimi-
 nation under any program or activity
 receiving assistance  under the Act.
   (b)  Oranu  under  section 107  are
 awarded subject to the conditions—<1>
 that the State shall acquire any land
 or interest! therein necessary for such
 pro'    to  assure  the elimination  or
 cor     of  acid  or  other mine water
 poii^.jn; and (2) that the State shall
 provide legal and practical  protection
 to the project area to Insure  against
     activities which will cause future
     or other mine water pollution.
 140.145-3  Project! tnvoMag CMUtrwtton.
   Research and demonstration grants
 for  projects  involving   construction
 shall be subject to the following condi-
 tions:
' -  (a) The applicant will  demonstrate
 to the satisfaction of the grants officer
 Chat he has or will have  a fee simple
 or-sueh other estate or Interest in the
 site  of the  project,  and  rights  of
 access, as the grants officer finds suffl-
 •cient to assure undisturbed use and
 possession for the purpose of construc-
 tion and operation for the estimated
 life of the project: and in the ease of
 projects serving more than one mu-
. nicipality, that the participating com-
 munities have surh interests or rights
 as the grants officer finds sufficient to
 assure their undisturbed utilization of
 the  project for the estimated life of
 the project.
   (b) Invitations for  bids or requests
 for proposals shall be based upon  a
 clear and accurate description of  the
 technical requirements for the materi-
 al, product, or service to  be procured.
 Such description shall not. in competi-
 tive procurements, contain features
 which  unduly  restrict  competition.
 "Brand name or  equal" description
 may be used as a  means to  define the
 performance or other salient require-
 ments of a procurement,  and when so
 used the  specific  features  of  the
 named  brand which  must be met by
 offerers should be clearly specified.
   (c) Positive efforts shall be made by
 the  grantees to utilize small business
 and minority-owned  business sources
 of supplies and services.
    Subagreements for  construction
 work may be negotiated  when adver-
 tising for competitive bids is not feasi-
 ble; however, the  grantee  must ade-
 quately demonstrate its need to con-
 tract with a single or sole source. All
 such BUbagreements  are subject  to
 prior approval by the grants officer.
    The construction of the project.
Including the letting of contracts in
connection therewith,  shall conform
to  the  applicable  requirements  of
State, territorial, and local laws and
ordinances to the extent that such re-
quirements do not conflict with Feder-
al laws.
  (h)  The  grantee will provide  and
maintain competent and adequate en-
gineering supervision  and inspection
for the project to insure that the con-
struction conforms with* the approved
plans and specifications.
  (1) Any construction  contract  must
provide that representatives of the En-
vironmental  Protection Agency,  and
the State,  as appropriate,  will  .-.have
access to the  work whenever it is In
preparation  or progress and  that the
contractor will provide proper  f
ties for  such access  and  inspect:
The contract  must also .provide   __
the grants  officer, the Comptroller
General of the United States, or any
authorized  representative shall  have
access  to  any  books,  documents.
papers, and records of the contractor
which are pertinent to the project for
the purpose of making audit, examina-
tion,  excerpts,   and   transcriptions
thereof.
  (j> The grantee agrees to construct
the project or cause it to be construct-
ed In  accordance with the application.
plans  and specifications, and subagree-
menu approved by EPA In the  grant
agreement or amendment*.
   In addition to the notification of
project changes pursuant to 40  CFR
30.900. a copy of any construction eon-
tract or modifications thereof, and of
revisions to plans and specification*
must  be submitted to the grant* offi-
(U FR 1X794. May U. 1971. M
40FR300U.Mar*.197i]
149.199  BvataaUoaafavpUeatlea*.
  Every application for a research or
demonstration.grant will be evaluated
by appropriate EPA staff in terms of
relevancy and the applicable criteria
set forth in 140.140. Only applications
considered relevant  to EPA research
and demonstration  objectives will
eelve further consideration and i
jected to additional review. Rel
will be  measured  by program  needs
and priorities as'defined In the Agen-
cy's current planned objectives.  Rel-
evancy,  coupled with  the results of

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                                    •rt
                                    4if
  	     review, win provide the basis
 lor funding recommendations.  '
  (a) #ew  application*.  Applications
 considered  relevant to SPA research
 and demonstration objectives  will be
 reviewed for technical merit by at
 leant one reviewer within EPA and at
 least  two  reviewer*  outside  EPA.
 Review by a National Advisory Coun-
 cil it statutorily required tor radiation
 grants.
   Continuation application*.  Con-
  nuatlon applications will be reviewed
  y appropriate EPA staff only. Recom-
 mendation* for  continuation of fund-
 ing* will be bated on proiress  toward
 the accomplishment  of the goals set
 forth for the project and  continued
 Agency need* and priorities.

 } 40.155  Amiability of informatics.
  (a) The availability to the public of
 Information provided to, or otherwise
 obtained by, the Administrator under
 this Part shall be governed by Pan 2
of this chapter.
  (b)  An  assertion  of entitlement to
confidential treatment of part or all of
 the information  In an application may
be made using the procedure described
In |30.23S(b>. See also  112.203  and
2.204 of this chapter.
          information and data  eon*
         the grant application will be
          external review unless devi-
ations* approved for good cause pur-
suant to 40 CFR 30.1000.
 fJS fit lltM. May IS. 1§73. u amended w
 40 PR 300U. Ma* a. i«S; 41 FR Milt.
Sept L IfTiJ

 !4*>)M  bpoftt.

 •44UM-1  Procrt* reports.
  The grant agreement will normally
 •equire the submission of a brief prog-
 ess report after the end of each quar-
 er of the budget period. A monthly
 Togj'ui report  may  be required for •
 ame  demonstration  projects.  If set
 jrth in the grant agreement. Progress
 »ports should fully describe in chart
 r  narrative  format  the  pi ogress
 :hieved in relation to the approved
 rhedule and project  "•n*-*""f«  ftpe*
  al problems or delays encountered
  usi  be explained.  A summary prog-
  «  report  covering all work on the
  'oject to date is required to be Includ-
  t with applications for continuation
  •ants (see 140.10Sb). This report may
   submitted one quarter  prior to the
  id of the budget period.
 I4S.IM-]  flmsciali
   A  financial status  report  must  be
 prepared and submitted within 00 days
 after completion of  the  budget and
 project periods In  accordance with
 130.635-3.
 (43 m MOST. Oct. 30. IITTJ
   As provided in Appendix  B of 40
 CFR. Part 30. Immediate and full re-
 porting of all inventions to the Envi-
 ronmental Protection Agency Is re-
 quired. In addition:
   (a) An annual invention statement Is
 required with each continuation appli-
 cation,
   (b) A final Invention  report Is re-
 quired within 90 days after completion
 of the project period.
    When  a principal  Investigator
 changes institutions or ceases to direct
 a project, an Invention statement must
 be promptly  submitted with a listing
 of all Inventions  during hi*
 tration of the grant
 in m mac May is. Iff). M
 40 PR SOON. Mar «. U7S3
 |4fl.lM-4
   At the completion or termination of
 a project, the grantee will submit a
 listing of  all Items of equipment ac-
 .quired with grant funds with an acqui-
 sition cost of $300 or more and having
 a useful life of more than 1 year,
 I4H.IM-I
   The grantee shall submit a draft of
 the final  report  for review no later
 than 90 days prior to the end of the
 approved  project period. The report
 shall document project activities over
 the entire period of grant support and
 shall describe the grantee's  achieve-
 ments with respect to stated project
 purposes and objectives. The report
 shall set forth In complete detail all
 technical aspects of the projects, both
 negative and positive, grantee's find-
 Ings, conclusions, and result*, includ-
 ing. as applicable, an evaluation of the
 technical effectiveness and economic
 feasibility of  the methods or tech-
.nlques  Investigated or demonstrated.
 The final report shall  include  EPA
 comment when required by the grants
 officer. Prior to the end of the project
 period,  one reproducible copy suitable
 for printing and such other copies as
 may be stipulated in  the grant agree-
 ment shall  be  transmitted  to  the
 grants officer.
                          §40.145


 I40.1IS  CeatianiMA gnats.
•  To  be eligible for a  continuation
 tram  within the  approved  project
 period, the grantee muse
   (a) Have demonstrated satisfactory
 performance   during   all   previous
 budget periods: and
   (b) Submit no later than 90 days
 prior to the end of the budget period a
 continuation  application which  In-
 cludes  a detailed  summary progress
 report, an  estimated  financial state-
 ment for the  current budget period, a
 budget for the new budget period; and
 an updated work plan revised to ae-
 c?.unLler  •ctu*1  P»«ress  accom-
 plished  during  the current  budget
 period.

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Thursday
October 16, 1984
Part III


Environmental

Protection Agency

40CFR Part 45
Training Assistance; Final PJuto
40CFR Part 4$
Fsflowship Assistance; Final Rul«

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41QQ4    Fedtrtl
ENVIRONMENTAL WOTlCnO*
AGENCY
to manpower forecasting in the title of
thii part and in the table of contents.

CoiuUteacy With 40 CFR Pan 30.
"General Rtfuljtjoo for AtAstance
         "
  r»inir*AwM»«et;nn«ll

 .OINCV: Eavironmental Protection
 Agency.
 J.CTWC Final rule.

             is Hnal rule revises the

  triining assistance award*.
  O*TC TWs n»l« eppiies to tU Wining
  auistsnce which EPA twards on or
  after October 18. 1984.
  Ri
  Street SW., Wa
  (202) 382-529*.
                       and procedure.
   cnges

   Stipend Leveb
   order to
    and funding
             fro»
                         FomaaUnt
and in "f il* Clean W*»r AU.
1311- 5 C '.:«!«!• t2M. »nd 1ZB1I. *«i. NO;
.r.ci 8001 HI IN* So.id WstW Oiipowl Ac«.
!m,n,M t*2 C-S.C «n .«....,.„. Procram*
                                        |41Y10
                                          Assistance agreements ere
                                        under this p«rt to support students
                                        S«ugh traineeships for occup«t«onal
                                           Jin/—.;...! MiniTM and IO
   pollution abatement and control.
   Training assistance ia available to:
     (a) Assist in developing, expanding.
   planning, implementing, and improving
   environmental training:
     (b) Increase the number of trained
   pollution control and abatement
   personnel;
     (c) Upgrade the level of occupational
   and prafeaaiona! training among State
   and local environmental control
   personnel:
      (d) Train people to train other* in
    occupations involving pollution
    abatement and control: and
     DBIUDVIll •"«• -~	" —- - .
      (e) Bring new people into the
    environmental control field.
    141.111 Oetmwone.
      The following definitions supP'*™"1
    »+**»zz*szy£t
                                                                                 145.110.

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      Federal Register /  Vol. 49.  No. 203  /  Thursday.  October 16.  1964 /Rules  and Regulations    4100*
 {41.120  Appttearrt aBttiXety.  .
   Institutions, organizations, and
 individuals are eligible for EPA training
 awards as follows:
   Ml Clean Air Act. Section 103(b)—Air
 pollution control agencies, public and
 nonprofit private agencies, institutions:
 organization!, and individuals. \o
 award may be made under this Act to
 any private, profitmaking organization.
   (bj Clean Water Act, (1) Section
 l'W(bJ(3)—State wafer pollution control
 agencies, interstate agencies, other
 public or nonprofit private agencies.
 institutions, organizations, and
 individuals. No award may be made to
 any private, profitmaking organization.
   Ul Section 104U)(3)fA(—Public-or
 private agencies and institution*, and
 individual*.
   (3) Sections !04(gHl) and   .
 >d4{gJ(3JfC>—State and interstate  .
 agencies, municipalities, educational
 institutions and other organizations and
 individuals.
   (4J Sections 109, no, and ill—
 Institutions of higher education, or
 combinations of such institutions.
   (c) Solid Waste DupotalAei ft)
 Section 8001(aJ—Public or private
 authorities, agencies, and institutions
 and individuals. No award may be made
   any private, profitmaking
 rganization,
   (Z) Section 7007(a>—State or interstate
 agencies, municipalities, educational
 institutions, and other organization*.
   (d) So/0 Drinking Water ACL Section*
 1442( b) and I442fd}-Public agencies.
 educational institutions, and other
 organitationa. No awards nay be made
 ta profitmaking agencies or institutions.


   Applicants must submit their request*
 for assistance on EPA Form 5700-11.
 "Application for Federal Assistance."
 Applicants must submit the original and
 two copies of the application to EPA. If
 the assistance agreement is to be
 awarded by EPA Headquarters, die
 applicant must send the application to
 the Environmental Protection Agency.
 Grants Administration Division. Grants
 Operation Branch (PM-216). 401 M
 Street SW.. Washington. D.C 20400. If
 the assistance agreement is to be
awarded by an EPA Regional Office, the
 applicant must send the spplication to
 the appropriate Regional Office. (OMB
clearance number 2010-0004.)
   ivafcianon 91 appBcaBma.
«Consistent with 40 CFR 3&301, the
jnate EPA program office staff
view training application* in
lance with the following criteria:
   (I) Relevance of proposal to Agency
 objectives, priorities, achievement of
 national goals and technical merit:
   (2) Competency of the proposed staff
 in relation to the type of project
 proposed:
   (3) Feasibility of the proposal:
   H) Adequacy of the applicant's
 resources available for the project:
   (S) Amount of funds necessary for the
 completion of the project;
   (bj In addition, awards under section
 J04[gJ(l| of the Clean Water Act. arc
 subject to the following criteria:
   (JJ Assessment of need for training in
 a State or municipality based on
 problems with existing wastewater
 treatment plants, such a* violation of
 discharge permit conditions, and faulty
 or improper operation or maintenance.
   (2) Need for operating training based
 on the number of wastewater treatment
 construction grants in the State.

 fO.13*  tWppiemenlal condibona.
  'Training awards are subject to the
 following conditions:
   (aj Trainees must be citizen* of the
 United State*, its territories, or
 possession*, or lawfully admitted to the
 United Slate* for permanent residence.
   (b) Recipient* shall not require the
 performance of personal services by
 individual* receiving training at a
 condition for assistance.
   (c) Trainees an entitled to the normal
 student holidays observed by an
 academic institution, or the holiday end
 vacation schedule applicable to all
 trainees at a nonacademic institution.
  (d) Training award* may include a
 provision to pay stipends to trainees.
 Stipend* must be peid under section ill
 of the Clean Water Act consistent with
 prevailing practice* under comparable
 federally *upported program*.
  (e) Training award* under section ill
 of the Clean Water Act are subject to
 the following condition*:
  (1) Recipient* mu*t obtain the
 following agreement in writing from
 person* awarded scholarships for.
 undergraduate study of the operation
 and maintenance of treatment works:
  1 **rt« to enter and remain in an
 occupation involving the design, operation, or
 maintenance of wastewater treatment work*
 for a period of two years a/ter the
 satisfactory completion of my studies under
 thin program, 1 uodantaad that i/l fail 10
 ptrfora this oMisaboa I may be required to
 repay the amount of my scholarship.
  (2) Recipients must take such action
as may be reasonably required to
enforce the condition in paragraph
(e)(l) Recipient* shall credit or pay EPA
for any repayment*.
                                                                          i 41 140  tutfget an* project perfetf.
                                                                            The budget and project periods for
                                                                          training awards may not exceed :hr*e
                                                                          years.
                                                                          I4S.14I  AHocaMUtyandaMowaMityor
                                                                          cost*.
                                                                            («) Allocability and allowability of
                                                                          costs will be determined in accordance
                                                                          with 40 CFR 30.410.
                                                                            (b) Costs incurred for the purchase of
                                                                          land or the construction of buildings *.-«
                                                                          not allowable.
                                                                          |4S.tM  Report*.
                                                                            (a) Recipients must submit the reports
                                                                          required in 40 CFR 30.505.
                                                                            (b) A draft of the final project report i*
                                                                          required 90 days before the end of the
                                                                          project period. The recipient shall  '
                                                                          prepere the final projects report in
                                                                          accordance with the project officer i
                                                                          instructions, and submit the final proj*<::
                                                                          report within 30 days after the end of :h*>
                                                                          project period.
                                                                          I4S.1M  Continuation asafauncr
                                                                            To be eligible for continuation
                                                                          assistance, the  recipient must:
                                                                            (a ) Oemonstra te satisfactory
                                                                          performance during all previous budget
                                                                          periods:
                                                                            (b) Include in the application a
                                                                          detailed progress report showing the
                                                                          progress achieved and explain special
                                                                          problems or delays, a budget for the
                                                                          new budget period, and a detailed work
                                                                          plan for the new budget period: and
                                                                            (c) Submit a preliminary financial
                                                                          statement for the currant budget period
                                                                          that includes esfimatea-of the amount
                                                                          the recipient expects to spend by the
                                                                          end of the current budget period and the
                                                                          amount of any uncommitted funds
                                                                          which the recipient proposes to carry
                                                                          .over beyond the tern of the current
                                                                          budget period.
                                                                                AOCMCV TflMmO PNQQftAMS
                                                                                       «a*riM >»>t: •**. •*»«•;

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  41006    F«d«til Re».
   The EPA Is authorised to award
 fellowships under the  following statutes:
   (a) Section I03(b)(3) of the Clean Air
 Act as amended (42 U.S.C. 74Q3(o)(S|):
   (b) Section 104(b)(9) and 1«{|)(3J(B)
 of the Clean Air Act as amended (39
 U.S.C U54(bKS) and 1254(g)(3)(B):
   (c) Section 1442(d)(2) of the Safe
 Drinking Water Act as amended (42
 U.S.C 300j.l(d)(2}: and
   (d) Section 8001 of the Solid Waste ^
 Disposal Act as amended (42 US.C.  .
 8991).
149.119
  Fellowships awarded under this p«
are intended to enhance the capability1
of State or local agencies responsible
for environmental pollution control or
other agvndes with similar pollution
control responsibilities; provide
educational renewal opportunities for
their career oriented personnel to
achieve additional knowledge through
academic professional training: and to
bring new people into the environmental
control Held.
148.118 Types of
  WlocofofftncyfiJtowitiipttn
awarded to current or prospective
employees of a local environmental
pollution control or regulatory agency
for academic professional training in
pollution control science, engineering.
and technology and in specialty areas
supportive of pollotion abatement and
control efforts.
  (b) Slat* ogtncy ffltowthipt an
awarded to current or prospective
employees of a State environmental
pollution control or regulatory agency to
provide academic professional training
in die areas of pollution abatement and
control.
  (c) Specialftllowitiip* are awarded to
individuals for education and training
pollution control sdence. engineering,
aad technology and in specialty anas

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               Federal Regiiter / Vol. 49. No. 203  / Thursday. October 18.  1984 / Rules and Regulations     41007
     lupportivt of pollution abatement and
     control efforts.  •    .   •

     f4|.fio  OefWflom.
      The following definitions supplement
     the definitions in 40 CFR 30.200.
      Full-time fellow. An individual -.
     enrolled in an academic educational
     program directly related to pollution
     abatement and control,  and taking a"
     rmnumuro of 30 credit hours or an
     academic workload otherwise defined
     by the institution as a full-time
    curriculum for a school year. The fellow
     need not be pursuing • degree.
      Part'timt fellow. An individual
     enrolled in an academic educational
   . program directly related to pollution
    abatement aa control and  taking at least
    6 credit hour* but lei* than 30 credit
    hours per school year, or an academic
    workload otherwise defined by the
    institution •• less than a full-time
    curriculum. The fellow need not be
    pursuing • degree.
      Special fellow. An individual enrolled
    in an educational program relating to
    environmental sciences, engineering.
    professional schools, and allied
    sciences.
      Stipend. Supplemental financial
   assistance other than tuitioa fees, and
    book allowance, paid directly to the
   fellow.
    $48.121
      fa) Recipients of assistance under this
    part shall be entitled to tuition and fees.
    Recipients may receive an allowance for
    book* aad supplies up to a maximum of
    S750 for the school year for a full-time
    fellow, and are entitled to the normal
    student holiday* observed by the
    academic institution.
     (bj Recipients oft fellowships may
    receive a stipend at a level determined
    by the EPA program office baaed on
    EPA'* needs tad resource*, aad on the
    student's course load.
     (c) Part-time fellow* will not be paid
    more than the •"•«if*uir amount paid to
    an equivalent full-time fellow under the
    same feUowahip* |
   rei



^Blfgi
141.130
  (a) All applicants for fellowship*
under tai* part mutt be:
  (lj Citi*ans of the United State*, it*
territories, or possessions, or lawfully
admitted to tea United State* lor
permanent residence; and
  (2) Accepted by an accredited
educational Institutional for full-time or
part-iime aoroUment for academic credit
in er  dueatioaaJ prograjn directly
reiai   to pollution abatement aad
  mtroi.
 r (b) Applicants for State or local
 igency fellowships must be current or
                                        prospective employees of a Slate or
                                        local agency with responsibilities for
                                        environmental pollution control, and
                                        must be recommended by the
                                       • administrator, or designer of the State
                                        or local agency. The administrator, or
                                        designee. will recommend applicants
                                        based on the State or local need for
                                        academic professional training which
                                        will enhance the capability of the Slate
                                        or local agency.

                                        f 40.W  8uoo*««Jo«iofappOcatlc«ia.
                                          fa) Applicant* must submit their
                                        request* for assistance on EPA Form
                                        5770-2. "Fellowship Application."
                                        Applicant* must submit the original and
                                        two copies of the application and
                                        undergraduate or graduate transcripts.
                                        as appropriate, to the Grants
                                        Administration Division. Grants
                                        Operation Branch (PM-216).
                                        Environmental Protection Agency, 401 M
                                        Street SW.. Washington. D.C.. 20480.
                                        (OMB clearance number 2010-0004.)
                                          (b) The applicant must submit
                                        documentation to show compliance with
                                        (he eligibility requirements in 1 46.130.
                                        and any additional information required
                                        by the award official. Instructions for
                                        filing are contained in the application
                                        kit
                                       141.190
                                         (a) EPA will evaluate fellowship
                                       application* based upon:
                                         (II Their relevance to EPA'* program
                                       need*;
                                         (2) The availability of funds; and
                                         (3) EPA'* priorities.
                                         (4) Appropriateness of the fellow'*
                                       propo*ed course of study: *
                                         (9) Evaluation of the applicant ia
                                       term* of potential for study, a*
                                       evidenced by academic record, letter* of
                                       reference. training plan*: aad aay other
                                       available information.
  (a) The fellowship agreement I* the
written agreement, including
amendment*, between EPA and a
fallow. The agreement. EPA Form 3770-
ft. "Fellowship Agreement." will state
the term* and condition* governing tba
fellowship. (OMB clearance number
2010-0004.)
  (b) EPA will not participate in coats
incurred by the fellow before both tba
award official aad the fellow *ig& tba
agreement
  (c) The fallow must use the fund* for
the purposes stated ia the fellowship
agreement If the fellow fail* to comply
with tba terms aad condition* of the
award, the award official may apply the
•auction* ia 40 CFR Part 30, Subpari L
                                         (a) The fellow must receive a formal
                                       amendment before implementing:
                                         (t; Changes in the objective of the
                                       agreement
                                         (2) Change* in the assistance amount;
                                         (3) Substantial changes within the
                                       scope of the agreement or
                                         (4) Change* ia the project period.
                                         (b) Fellow* must submit a completed
                                       EPA Form 3770-6.  "Fellowship
                                       Amendment" (OMB clearance number
                                       2010-0004) when requesting an
                                       amendment to the fellowship agreement.
                                         (c) Minor change* ia the agreement
                                       that an consistent with the objective of
                                       the agreement and within the scope of
                                       the agreement do not require a formal
                                       amendment before the fellow
                                       implements the change. However, such
                                       changes do not obligate EPA to provide
                                       Federal fund* for aay costs incurred by
                                       the fellow ia exec** of the assistance
                                       amount unlea* the award official
                                       approves the change in advance under
                                       146.150(a). The fellow must  ..form the
                                       EPA project officer in writing before
                                       implementing minor change*.

                                       140.191 Oupptentenmuxiuiuuit*.
                                         Recipient* of a Slate or local
                                       fellowship receiving financial assistance
                                       under section 1442(d)(2J of the Safe
                                       Drinking Water Act a* amended:
                                       •actions HM(bJ(5) aad 104(g)(3)(B) of the
                                       Clean Water Act a* amended: and
                                       •action 8001 of the Solid Waste Disposal
                                       Act must agree to remain ia the
                                       employment of the State or local agency
                                       that recommended the recipient for an
                                       EPA fellowship fv twice the period of
                                       the fellowship. If tba recipient fails to
                                       perform thia obligation tba recipient may
                                       bt required to repay the amount of the
                                       EPA fellowship.
|4fl,180
  The applicaat accepts the fellowship
by signing aad returning the fellowship
agreement to the EPA award official
within tare* weeks after receipt, or
within aay ***TP>*OB of such time that
may be permitted by tba EPA award
official. If the applicaat doe* not sign
aad return the agreement to the award
official or raqoaat aa extension of the
acceptance time within tan* calendar
weeka after receiving the agreement, the
offer ia null and void.
140.101
  (a) Full-time fellowship* will aot
exceed one year.
  (b) Part-Una fellowships will not
exceed tarn yean. .

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 41001    Ftdtfal R*tUttr  / Vol  49. No. 203 / Thurtdiy. October 18. 1984 / Rules and Rcguiitioru
   (•J The fillow must submit EPA 5770-
 7 "Fellowship ActjvaUca Notice" when
 they start their course of studief (OMB.
 clearance number 2010-0004).
   (b).if the EPA Grants Administration •
 Division bat not received th« »igntd
 Fcilowahip Activation Notict within lix
 month* following the data of the award.
.EPA may terminal* the fellowihip.

 |4C.17f CompHBon of itudln.
  FlUowt mutt »ubnjt EPA Form 5770-9
 "EPA Ftllowihip Ttrminibon Node*."
 wfaao tha fallow complete tfaa COUTM of
 aftidy. (OMB elaaraoca number 2010-
0004)
                                       |*i,i«0  Nymtnt
   (a) EPA will pay itipcndi directly to
 the fellow on a monthly basil or any
 other basts approved by the Project
 Officer, only after EPA has received the
 signed EPA Form 5770-7. "Fellowship
 Activation Notice." (OMB clearance
 number 2010-0004).
  (b) EPA will pay tha book allowance
directly to the fellow only after EPA
receives the signed EPA Form 5770-7.
  (c) EPA will pay tuition and fee* in a
lump paymeot directly to the sponsoring
institutiob only after EPA has received
the signed EPA Form 5770-7.
                                       A»*f xen A-CnvMONMOrrAi Pwtcr

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         APPENDIX H
   40 CFR PART 47, "NATIONAL
ENVIRONMENTAL EDUCATION ACT
    GRANTS REGULATIONS"

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Monday
March 9, 1992
Part III


Environmental

Protection Agency

40 CFR Part 47
National Environmental Education Act
Grants Regulation*; Interim Final Rule

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 8380        Fadera! Register / Vol 87.  No. 46 / Monday.  March 9. 1992  /  Rules and Regulalions
 EMVWONIICKTAL PROTECTION
 IAQENCY

 4QCFRHrt47
 National Ewlr
itsJEdu
 Grants Regulations

 AOOicr. Environmental Protection
 Agency (EPA).
        Interim final rate.
wiAct
 SUMMARY: Th« Environmental Protection
 Agency (EPA) U promulgating an
 interim final rule on the award of    •
 financial aitiiUnce under section 6 of
 the National Environmental Education  •
 Act (NEEA). This rule codifies polldM
 and procedure* for financial assistance
 •warded by EPA to eligible agencies,
 institutions and organizations to support
 projects related to environmental
 education and training.
 OTtCTOfMTtt EPA is publishing this
 rule as an interim final role which is
 effective on March 9. 1902. EPA will
 accept public comments on this rule
 until April ft, 1982.
 AOCMUSKK Comments may be mailed
 to Mr. George Walker. Office of
 Environmental Education (A-107). V&
 Environmental Protection Agency. 401 M
 Street SW, Washington. DC 20480.
  The docket for mis rule and copies of
  * public comments submitted will be
 available for public inspection and
 copying at a reasonable fee at EPA
 Headquarters Library. Public
 Information Reference Unit room 2904.
 401 M Street telephone (202) 2KW828.
 MM tvimm  MKWMATWM CONTACT:
 Mr. George Walker. (202) 2WM464.
  On November 16.1990. Congress
enacted and the President signed the
National Environmental Education Act
(NEEA). Public Law 101-419. In section 6
of the NEEA. it established a program
for grants aad cooperative agreements
to support prefects
environmental T'twutti'*' ""if training,
and directed EPA to fpfafiafc e regulation
to implement the Drofrsa* This
regulation implements the statutory  * .
requirements of section 0 of the NEEA.
The definitions, eligibility requirements.
solicitation procedures, priorities for
award, and limits on amount of award
a:? taken directly frc^ the K^A.
  The NEEA also establishes a
maximum Federal share of 75* for
demonstration protects. As a policy
•natter, to ensure that recipients are
  nmitted to successful completion of
  elects. EPA has decided to apply this
maximum to all types of grants bwarded
under section 8. Thus, as s general rule
allgrant recipients in this program will
be expected to provide at least a 251
match, including in-kind contributions.
  In addition to the requirements of the
Act. recipients must comply with the
provisions of EPA'i general assistance
regulations at 40 CFR parts 30 and 31. as
appropriate.
  This regulation applies only to the
environmental  education program
established by section 6 of the NEEA. It
does not govern the Environmental
Education and Training Program to train
education professionals authorized by
section 5, nor the Internship/Fellowship
Program authorized by section 7 of the
NEEA. EPA will develop separate
guidance for these programs.
IL Executive Order 12291
  Under Executive Order 12291. EPA
must judge whether a new regulation is
"major" and therefore subject to the
requirement of a Regulatory Impact
Analysis. This regulation does net
satisfy any of the criteria the Executive
Order specifies for a major rulemaking,
and therefore this is not subject to *
Regulatory Impact Analysis. .
  This regulation was submitted to the
Office of Management and Budget
(OMB] for review as required by
Executive Order 12291.
EQL Papecwotk Reduction Act
  The information collection
requirements in ibis rule have beta
approved by the Office of Management
and Budget (OMB] under the Paperwork
Reduction Act 44 US.C 3501«l mf. and
have been ssrignad control number
                     Public reporting burden for tills
                   collection of information is estimated at
                   19 hours per response. Including tats foe
                   reviewing Instructions, gathering
                   information, preparing the application
                   package and status reports, maintaining
                   records on tho data needed and
                   completing the collection of infonuttosv
                     Send comments regarding the bodes
                   estimate or any other aspect of tfaja
                   collection of information, including
                   suggestions for reducing this burden IDT
                   Chief. Information Policy Branch.
                   Regulatory Management Division (PM-
                   223Y* EPA: 401M SU SW, Weshtagto*
                   DC 20400, and to the Office of
                   Information and Regulatory Affairs. • •
                   Office of Management and Budget.
                   Washington. C 2 :::". cw'-ed
                   "Attention: Desk Officer for EPA."
                  . IV. Regulatory FUadbOiry Act
                     EPA did not develop a Regulatory
                   Flexibility Analysis for this regulafioit-
                   becaose it U exempt from notice and
comment rulemaking under section S53
of the APA. and therefore, is not subject
to the analytical requirements of
sections 603 and 604 of the Regulatory
Flexibility Act (S U.S.C. 803 and 604).

list of Subjects in 40 CFR Part 47

  Grant programs—education. Grant
programs—environmental protection.
and Reporting and recordkeepihg
requirements.
  Dated: February 27.1992.
WiBiam K. Reilly,
Administrator.

  For the reasons set out in the
preamble, title 40. chapter I of the Code
of Federal Regulations is amended by
adding a new part 47 to read as follows:

PART 47—NATIONAL
ENVIRONMENTAL EDUCATION ACT
QUANTS
                                                         47.100 Purpose end scope.
                                                         47.105 Definition*.
                                                         47.110 Eligible applicants.
                                                         47J1S Award •mount and matching
                                                            requirtmenU.
                                                         47.UO Solicitation notica and proposal
                                               4T.12S  Eligible tad priority project! and
                                                  activities.
                                               47.110  Project performance.
                                               47.135  Disputes.
                                                Authority: 29 UJ5.C SSOS.

                                               § 4v.lvO  Purpose end ecope.
                                                This regulation codifies policy and
                                               procedures for the award of grants or
                                               cooperative agreements under section 6
                                               of the NEEA. Specifically, this regulation
                                               defines eligible applicants, eligible
                                               activities, EPA priorities for selecting
                                               recipients, funding limits, and matching
                                               requirements. Projects funded under this
                                               regulation are also subject to the Code
                                               of Federal Regulations (40 CFR) part 31
                                               for State and local recipients, and part
                                               90 far other than State and local
                                               recipients. Those regulations contain
                                               Federal audit and other general
                                               administrative requirements. This
                                               regulation does not apply to the
                                               prognms fcnplemented tinder sections S
                                               end 7 of the NEEA.
                                               |47Jt08
                                                 (a) Enrironmenta/ education and
                                               eovironmental education and training
                                               Bean educational activities and training
                                               eedfities involving elementary,
                                               secondary, and pos*?-;r-.J^ students.
                                               M each lams are defined in the State in
                                               which tbay reside, and environmental
                                               f4rr-tLM' personnel but does not
                                                    it technical training activities
                                               directed toward environmental
                                               management professionals or activities

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              FetkraJ Register / Vol  S7. No. 46 / Monday. March 9. .1992 / Rules  and Regulations        8391
 primarily directed toward the support of
 noneducationai research and
 development
   (b) Federal agency or agency of the
 United States means any department.
 agency or other instrumentality of the
 Federal Government, any independent
 agency or establishment of the Federal
 Government including any Government
 corporation:
   (c) Local education agency means any
 education agency ai defined in section
 168 of the Elementary and Secondary'
 Education Act of 1965 (20 U-S.C 3381)
 and shall include any tribal education
 agency, as defined in 1 47.105(0;
   (d) Not-for-profit organization means
 an organization* association* or
 institution described in section 30t(c)(3)
 of the Internal Revenue Code of 1888.
 which is exempt from taxation pursuant
 to the provisions of section 301(e) of
 such Code;
   (e) Noncommercial education
 broadcatting entities means any
 noncommercial educational
 broadcasting station (and/or its legal
 nonprofit affiliates) as defined and
 licensed by the Federal Communications
   (0 Tribal education agency means a
 school or community college which is
 controlled by aa Indian tribe, band or
 nation, including any Alaska Native
 village, which is recognized as eligible
 for special programs and services
 provided by the United States to Indiana
 because of their status as Indians and
 which is not administered by the Bureau
 of Indian Affairs:
*  (g) Refer to 40 CFR parts 30 and 31 for
 definitions for budget period, project
 period, continuation award, cooperative
 agreement grant agreement and other
 Federal assistance terms,
 147.110  __._.._
   Any local education agency (including
 any tribal education agency), college or
 university. State education agency or
 	i	._«   _ __.    _.*_     •».
environmental agency. no«-f
organization, or
•profit
educational broadcasting entity may
submit an application to tfa*
Administrator in response to the   •
solicitations described in f 47.120.
            147.115  Award amount and matching
            requirements.
              (a) Individual awards shall not exceed
            $250.000, and 25 percent of all funds
            obligated under this section in a fiscal
            year shall be for individual awards of
            not more than $5,000.
              (b) The Federal share shall hot exceed
            75 percent of the total project costs. The
            non-Federal share of project costs mey
            be provided by in-kind contributions
            and other noncash support. In cases
            where the EPA determines that a
            proposed project merits support and
            cannot be undertaken without a higher
            rate of Federal support the EPA may
            approve awards with a matching
            requirement other than that specified in
            Ibis paragraph, including full Federal
            funding.

            f 47.1*9
             Each fiscal year the Administrator
            shall publish a solicitation for
            environmental education grant
            proposals. The solicitation notice shall
            prescribe the information to be included
            in the proposal and other information
            sufficient to permit EPA to assess the
            project
            147.118
                           •Je
  (a) Activities eligible for funding shall
include, but not be limited to.
environmental education and mining
programs for
  (1) Design, demonstration, or
dissemination of environmental
curricula, including development of
educational tools and materials;
  (2) Design and demonstration of field
methods, practices, and techniques,
including assessment of environmental
and ecological conditions and analysis
of environmental pollution problems:
  (3) Projects to understand and assess
a specific environmental issue or a
specific environmental problem:
  (4) Provision of training or related
education for teachers, faculty, or
related personnel in a specific
geographic area or region; and
  (5) Design and demonstration of
projects to foster international
                                      cooperation in addressing
                                      environmental issues and problems
                                      involving the United Stales and Canada
                                      or Mexico.
                                        (b) EPA shall give priority to those ..
                                      proposals which will develop:
                                        (1) A new or significantly improved
                                      environmental education practice.
                                      method, or technique: •'•
                                        (2) An environmental education
                                      practice, method, or technique which
                                      may have wide application:
                                        (3) An environmental education
                                      practice, method, or technique which
                                      addresses a skill or scientific field
                                      identified as a priority in the report
                                      which will be developed within two
                                      years of enactment pursuant to section
                                      9(d} of the Act and
                                        (4) An environmental education
                                      practice, method, or technique which
                                      addresses an environmental issue
                                      which, in the judgment of EPA. is of a
                                      high priority.
§ 47*190
  (a) Each project shall be performed by
the recipient or by a person satisfactory
to the recipient and to the EPA.
Workpians shall accompany ail
applications, shall identify who will be
performing activities, and shall be
approved by EPA prior to funding.
  (b) Budget periods normally wiU not
exceed one year. Project periods may be
longer, and additional funding may be
awarded for continuations.
  (c) Procurement procedures, which are
found in 40 CFR part 33 for ail recipients
other than State and local governments.
Procurement procedures for State and
local governments are described in 40
CFR part 31. These procedures include
provisions for small purchase
procedures*
147.131
  Disputes arising under these grants
shall be governed by 40 CFR 30.1200 for
recipients other than State and local
governments and 40 CFR 31.70 for State
and local governments.
{FK Doc 02-U83 Filtd 3-S-02: &4£ «mj

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       APPENDIX I
EPA ORDER 1000.25, "USE OF
    RECYCLED PAPER"

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   Wo.;   \ 6 6

D«t.: JAN I 4  !990
                        Use of Recycled Paoar
       1.   PURPOSE .  This Order establishes Agency policy to
  encourage the us* of recycled paper.

       2.   BACKGROUND.  The EPA has set a goal for the nation to
  reduce and recycle twenty-five percent of municipal solid vaste
  by 1992.  One of the keys to making recycling successful is the
  development of stable markets for products containing recovered
  material*.  The Federal government needs to do its part by
  purchasing such products; the EPA should be a leader in this
  effort.  This Order promotes this end by establishing sn Agency
  policy promoting the use of recycled paper.
                     it is Environmental Protection Agency policy
  to use, and to promote the use of, recycled paper.
       4.
  The Procurement and Contracts
is directed to ensure that all new
  Management Division (PCKD)
  contracts specify that contractors use recycled paper for all
  reports required for delivery to the Agency.  Kbere feasible,
  PCMD should seek to aodify existing contracts to include the same
  requirement.

            The Grant* Administration Division (GAD) is directed to
  include in all nev grants and cooperative agreements a special
  condition requiring that grantees and recipients of cooperative
  agreement funds use recycled paper for all reports submitted to
  the Agency.        .

       All Agency employees should be mindful of our initiatives in
  the area and should do their part to reduce anjLrecyole waste.
                                     am X

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   MEMORANDUM                                            .

   SUBJECT:   EPA Order on the Use of Recycled Paper

   FROM:      Harvey G.  Pippen,  Jr.,  Director
             Grants Administration Division

   TO:        Assistant  Regional Administrators
             Regions I  -  X



       On April 12, 1990, I issued a memorandum covering an EPA Order
  on  the  use  of  recycled   paper,    The  memorandum  included  a
  requirement for tf^e  -elusion of   special condition.

       Since  that  time,  we   have received  several  questions  and
  comments on the  special  condition.   Sised on these  comments,  we
  have revised the special condition to read as follows:

       "Pursuant to EPA Order 1000.25,  dated  January  24.  1990,
       the recipient agrees   to   use  recycled paper  I'or all
       reports which are prepared as a part  of this  agreement
       and delivered to the Agency.   Thie  requirement does not
       apply  to  reports which are prepared on forms supplied by
       EPA.   This  requirement applies even  when  the cost of
       recycled  paper is  higher than that  of  virgin paper."

      Thie  new  version  makes it clear  that the recycled  paper
 special  condition results from  ai,  EPA Order, and applies only to
 reports  delivered to the Agency.   Also,  please note  that this
 special  condition applies to all  new and  continuing grants  and
 cooperative  agreements.  You should begin  using  it as  revised
 immediately.


      Should  you have any  questions  or  comments regarding this
 matter,  please call ne or have your staff contact Ton Fletcher on
 382-5297.

 Attachment


 cc:   Regional Grants Branch  Chiefs,  Regions  I - X

 bcc:  Bruce Faldman
      Fred Meadows
      Scott KcMoran
 Official  H. -Pippen     P.  Hull   B.  Feldman
 Reading   T. Fletcher    R, Johnson
 Division

PM-216F:TFLETCHER:tf:801 FC:382-5297:4/24/90
C: \WP50\WPFIr,E\RECYCLE3 .MEM

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        APPENDIX J
DRAFT EPA ORDER, "POLICY AND
  PROCEDURES FOR FUNDING
  ASSISTANCE AGREEMENTS"

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                                             DRAFT
Classification No.:          .     *

Approval Date:                                       '

             POLICY AND PROCEDURES FOR FUNDING ASSISTANCE AGREEMENTS

        I.    PURPOSE

             The purpose  of  this policy  is  to  establish consistent,
        standard operating procedures for Regional and Headquarters Program
        Offices and Grants Management Offices (GMOs) to follow in awarding
        grants. While the policy and procedures address the funding process
        for all grants and cooperative agreements,  it focuses primarily on
        new\unique  assistant programs  c   individual project grants and
        cooperative agreements not previously funded and for which the GMOs
        have  limited background  information.  These assistance awards are
        other  than continuing assistance  programs,  are  frequently new
        programs, Congressional  add-ons, or special projects to be funded
        with  the Administrator's or Regional Administrator's discretionary
        funds.   Currently, there is confusion regarding assistance awards
        resulting from Congressional add-ons or that have no administrative
        procedures  in  place,  i.e. funds that .are unexpectedly identified
        for assistance awards in the  fourth quarter of the fiscal year.
        In  many cases, the GMO is made  aware  of these grants late in the
        the fiscal year.

             The  Headquarters and Regional  Program, Budget, and Grants
        Management  Offices are  participants in this assistance  funding
        process. Close coordination between and understanding of roles and
        responsibilities of these key participants  is vital to making the
        process work efficiently.  The Program Office provides the funding
        and is  responsible for the programmatic and technical oversight of
        the assistance process to  ensure the purposes of  the assistance
        award are achieved in a timely and high quality manner. The Budget
        Office  maintains assistance funds availability through control of
        advices of allowance  and reprogrammings to  the Agency's Operating
        Plan.  The GMOs assure the assistance application  completeness by
        performing  and documenting an administrative and  legal review of
        the assistance application.  To avoid an unmanageable assistance
        award workload  in the fourth  quarter, there is a need for regular
        communications  and coordination of  planning throughout the fiscal
        year  between these offices.

             This  policy  addresses  two concerns:   (l)  the  need for
        communication and early planning and scheduling for making awards,
        and  (2)  identifying  appropriate   program  elements,  statutory
        authorities, and delegations  for such awards.

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II.  POLICY

     It  is  EPA policy  to award  assistance agreements that  are
legal, administratively correct,  and support the Agency's mission,
as  quickly  as  possible  after  funds  become  available.    In
furtherance of this policy, EPA establishes the following:

     1.   Planning and Communication.   Good management practices
dictate the need for strong communication and early planning.   To
facilitate better planning, the Program Offices are encouraged to
establish an annual plan and schedule for awarding their assistance
agreements and to regularly communicate that plan and schedule to
the appropriate Budget and Grants Management Offices.  To promote
earlier planning and increased communication, both Headquarters and
Regional Grants Management, Budget, and Program Offices should hold
periodic  meetings,  initiated by  the GMOs,  to reduce the impact
created by last-minute, fourth-quarter awards.  These last-minute
awards  are  often  due  to  late  reprogramming  of  funds 'from
Headquarters to the Regions or to grants hastily awarded to avoid
having funds carried-over and reissued for  a different purpose or
Office.   The Program  Office  must recognize  that the GMO needs at
least 60  days  lead time   (Superfund awards  require 90 days) from
receipt of application to the award date to assure award of ;a grant
by the end of the  fiscal year.

     2.   Program Element^^fftatutorv  Authority.   Delegation  of
Authority.     The  program  element,  statutory  authority, ; and
delegation  of  authority are information  required  before  EPA can
award a grant.   They are documented on the  EPA Assistance Agreement
-  EPA Form  5700-2OA.   The  National Program  Office  will verify
statutory authority, program element, and delegation of authority
before funds are  sent to the Regions to  award assistance.  This
information must appear in a memorandum or d-mail from  the National
Program  Office  to the   Regional  Program  Office  prior   to  the
distribution of the funds.   The memorandum or d-mail should be
referenced on the  budget  reprogramming document in  IFMS.


III. DEFINITIONS

     1.   Approval Official.   The  individual  within  the  Program
having the responsibility and delegated authority for determining
whether  to  fund  or  reject  an  application  on  the basis  of
technical\programmatic  considerations.   The Approval   Official
communicates this  funding decision to the  Award Official through  a
Decision  Memorandum.

     2.   Award  Official.  The individual who signs  the assistance
agreement ensuring that  all  technical,  legal, and  administrative
evaluations  have  been  made  and  that the  proposed agreement is
awardable.  The Award Official for regionally administered  programs
is  either  the Regional  Administrator,  the  Assistant   Regional

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Administrator, or the Division Director, depending upon the region
or  program.   The Award Officials for Headquarters are the Branch
Chief,  Grants Operations  Branch, and  the Branch  Chief,  Grants
Information  and  Analysis Branch, Grants Administration Division,
Office  of  Grants and  Debarment, Office  of  Administration and
Resources Management.

      2.    Assistance  Funding  Process.    The  process  by  vhich
assistance  funds are  (1)  planned  in a Program  Office's budget
request to OMB and Congress,  (2) distributed during their operating
plan  development,  (3)  received  in  an  advice  of allowance,  (4)
committed  in IFMS,  and  (5)  ultimately  routed to the appropriate
Grants Management Office for award.

    ,  3.  Carry-over Funds.   Funds that are:  (1)  not obligated by
the end  of a  fiscal year;  and  (2) may  be obligated in the next
fiscal   year  according  to  the  terms   of  the appropriations
legislation  that ^irst  made  these  funds  available.  (Ref.- EPA
Resources Management Directive System (RMDS)  Chapter 2510)

      4.  Comptroller's Year-End close-out  Procedures Guidance.
Each  July, the Comptroller issues guidance entitled "FY 19—  Year-
End  Close-Out  Procedures".    This  broadly  distributed  package
includes  a  schedule  with  cut-off  dates  for  all  end-of-year
activities   associated   with  the Budget, Finance,  and  Grants
Administration Divisions and the Office of Acquisition Management.
It  also  includes a  cut-off  date (usually the  last business day in
August)  for  all  routine  budget reprogrammings,  beyond which, IFMS
security is  modified so  only reprogrammings approved on a case-by
case  basis are processed by the Budget Division.  This cut-off date
is  imposed  to encourage  all  offices  to  get  their end-of-year
funding  in  place  with  sufficient  lead time  for processing the
commitment and obligation.

      5.   Cooperative  Agreement.   The  agreement used  when  the
principal purpose of the relationship  is  the transfer of money,
property, or anything  of value to a  State or local government or
.other recipient  in order to  accomplish a public purpose of support
or  stimulation authorized by Federal  statute  in which substantial
involvement  is anticipated  between  EPA and the  recipient during
performance  of  the  contemplated activity.   (Also  known  as  an
assistance   agreement.)  (Ref.  -  Federal  Grant  and Cooperative
Agreement Act  of 1977  and  40 CFR Part 31)

      6.  Delegation of Authority.  The official basic directive to
senior Headquarters and  Regional management officials to exercise
authority for  the Administrator.  Statutory authorities to approve
assistance  agreements  are  assigned  to EPA's  Administrator  and
implemented  through delegation  to  the Regional  Administrators,
National  Program  Managers  or  their  designees.    The  Agency's
Delegation  Manual  identifies each delegation  of authority by  a
specific  number.    EPA's   Management and Organization  Division

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records  all  delegations  of  authority,  except  emergency\letter
delegations  in the  Delegation Manual  and  distributes them  to
Regional and Headquarters offices.

     7.  Decision Memorandum.  The Program Office's memorandum to
an Award  Official  containing the decision  and  justification for
either funding or rejecting an assistance proposal.  This decision
is signed by the Approval  Official or his\her respective designee.
The memorandum is sent to the Grants Management Office as part of
the assistance funding package.

     8.  Grant.  The agreement used when the principal purpose of
the relationship is the transfer  of money,  property,  or anything
else of value to a State or local government or other recipient in
order  to  accomplish a public purpose of support  or  stimulation
authorized by  Federal statute in  which  no  substantial Federal
involvement  is  anticipated. between EPA and the recipient during
performance  of  the contemplated  activity.  (Also known as  an.
assistance  agreement../   (Ref.  -  Federal Grant and  Cooperative.
Agreement Act of 1977 and 40 CFR Part 31.)

      9.  Grants Management  Offices (GMO).   The Headquarters and:
Regional  units responsible  for  all business  management aspects
associated with the review and negotiation of applications1 and^ the
award  and   administration  of  funded  projects  through  audit:
resolution and final close out.
                                                      \

     10.  National Program Manager.  The individual  responsible for
management of a program on a national level.

     11.     Program  Element.    A  classification  within* EPA's
program\budget  structure  which  represents  a   distinct program
activity.    The Program  Element  is  supported  by  one  or  more
authorizing  sections of law and must be associated with  the grant
statutory authority. (Appears as part of Item #39 - Fiscal Data -on
EPA's Assistance Agreement.)                                   ...

     12.   Program Office.   Refers  to either  the Headquarters
Program Office or Regional Program Office responsible  for managing
the technical\programmatic aspects  of a specific media program.,

     13.  Regional Program Manager.  The individual responsible for
technical\programmatic management of an assistance program at the
regional  level.

     14.  Statutory Authority. The section of specific authorizing
legislation  providing grant-making  authority to  the EPA.  (Appears
as Item #19  on  EPA's Assistance Agreement.)

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     1.
          A.  Program Office Responsibilities
          1.    The  Program  Office(s)  should be  encouraged  to
establish an annual plan and schedule for recommending awards and
to regularly communicate that plan and schedule to Headquarters and
Regional Grants Management Offices.  In particular,  the Program
must communicate its plans for spending  last-minute money to these
offices.  These plans must comply with the timetables cited in the
Comptroller's Year-End Close-Out Procedures (See definition).

          2.    The Program Office  should do  as  much preliminary
planning and  work as possible (including a  prioritized  list of
potential  projects   and   possibly  completed  applications  and
workplans  from  potential  recipients  for  these  projects)  in
anticipation of possible, last-minute, year-end funding.


          B.  Grants Management Office Responsibilities

          1.    The Grants  Administration  Division should  hold
periodic meetings with the National Program Managers/Contacts and
the Budget Division to discuss proposed assistance funding plans,
schedules,  and  related  information and   then  distribute  that
information to  both Headquarters and Regional Grants Management
Offices so they can adjust their workload.

          2.  The GMOs should hold periodic meetings with Program
Contacts to discuss proposed assistance funding plans and to plan
their workload.

          3.   The  GMOs must  plan their workload  to  allow for
processing some unexpected, last-minute, fourth-quarter awards.
     2.   Identifying   Program  Element.   statutory	Authority,
          Delegation of Authority

          A.  ProgramOffice Responsibilities:

          1.  The National Program Manager (NPM)  should notify the
Regional Program Manager  (RPM) via memorandum or d-mail, whenever
the NPM  initiates  a reprogramming for distribution of assistance
funds to the Region.    The NPM  must  identify the purpose of the
funding;  program  element;  statutory  authority;  delegation  of
authority, and an appropriate program contact person  familiar with
the project  in the memorandum\d-mail.  The-NPM should carbon copy
kthe  Headquarters  Budget  and Grants  Management  Office  if  the
 ssistance  is to  be  awarded  from Headquarters or  the Regional

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Budget and Grants  Management Offices if the assistance  is  to be
awarded from the Region.

          2.  The NPM must reference the dated memorandum or d-mail
on  the budget  reprogramming which  transmits  the  funds to  the
Regions.  This  reference should be  entered in  the justification
section  of  the IFMS  reprogramming  document.    When  possible,
reprogrammings  should  cite  the appropriate  object class,  i.e.
object class 25  for .acquisition and object class 41 for assistance.

          3.    The NPM  must include  the Grants  Administration
Division's (GAD) Assistance Administrative Summary Sheet in program
guidance.    The  summary Sheet includes  the  program  element,
statutory  authority and the  delegation  of  authority  for  the
respective assistance program.  The NPM must submit the completed
Summary Sheet and program guidance  to GAD for concurrence prior to
its issuance.

          4.    The Program  must   .dentify and  verify the  match
requirement(s),   if any,  for  the assistance against the statutory
authority, program regulation, or administrative regulation for the
assistance.  In  addition, the program will  identify and verify the
program element and delegation of authority supporting the match.

          If  an application will  be funded  under an  existing
program described  in the Catalogue of Federal  Domestic Assistance
(CFDA), the  Program must verify that the proposed activity meets
the program's eligibility criteria published in the CFDA,  If the
assistance program is  not in the CFDA,  the Program must identify
the eligibility requirements for the award and  ensure that these
eligibility  requirements agree with the  statutory authority and
delegation of authority under which the grant is being awarded.

          5.    The Program  Office  should coordinate  with  the
appropriate  NPM, and  Headquarters or Regional Budget Office to
provide the GMO  with missing  information if the GMO  returns a grant
award\funding   package  to   the  Program  Office  because  it  is
incomplete  regarding  program element,  statutory authority  and
delegation of authority.

          6.   The  Approval  Official must designate  the program
element,  statutory authority,  and  delegation  of authority in the
decision memorandum.

          7.  The  Program Office should refer any legal questions
regarding eligibility to the Office of General Counsel or Regional
Counsel.

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          B.  Grants Management Office Responsibilities

          !•   The  GMO provides  an overall  "check  and balance"
function,  assuring, the  correctness of  the  program  element and
statutory authority, and the existence of a delegation of authority
for the program to  approve.

          2.  The GMO should request clarification from the Office
of  General  Counsel  or Regional  Counsel  on  any  legal  Questions
regarding eligibility.                          ..*"-*•

          3.  The GMO  should return all incomplete funding\grant
packages  to the  Program Office  and should communicate  to the
Program Office the  information needed to complete the package.

          4.  The Grants Administration Division (GAD)  and GMOs,
when  appropriate,   must  incorporate  the  standard  operating
procedures  stated  in this  policy into their training  progress,
e.g., project officer training, and Basic Grants course.

          5.  GAD should verify that its Assistance Administrative
Summary Sheet appears in all program guidance.

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               ASSISTANCE ADMINISTRATIVE SUMMARY SHEET
  OPERATING PROGRAM\OFFICE:
                                   2. PROGRAM CONTACT(S):
3. CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) NUMBER:
4. PROGRAM TITLE:
5. PROGRAM PURPOSE:
6.  ELIGIBLE APPLICANTSVRECIPIENTS:
7. TYPE OF ASSISTANCE:
     Grant
     Loan	
     Cooperative Agreement_	
                                   8. NATURE OF ASSISTANCE:
                                         Continuing Program	
                                         Project	
9. STATUTORY AUTHORITY:
      Act:
      Section:
                                    10. REGULATORY AUTHORITY:
                                         Programmatic:
                                         Administrative:
11.   COST SHARING\MATCH REQUIREMENTS:
                                            Yes
                                                       No	
                                                       MOE
     BASIS OF COST SHARE\MATCHING REQUIREMENT:
     Statute	                   Program Regulation '
     Program Guidance	          Administrative Regulation,
12. LIMITATIONS:       Yes.
      If yes, list the limitations:
                                       No
13. DELEGATION OF AUTHORITY:
      Delegation Number:
      Tide of Delegation:
14. SUBJECT TO INTERGOVERNMENTAL REVIEW:   Yes
                                                       No
15. PROGRAM CODE:
                                    16. PROGRAM ELEMENT:
                                                          17. OBJECT CLASS:

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              ASSISTANCE ADMINISTRATIVE SUMMARY SHEET INSTRUCTIONS

1.     OPERATING PROGRAM OR OFFICE: (Office establishing program.)

2.     PROGRAM CONTACT(S): (Name, location and phone* of Lidividual(s) who can be contacted for further
       information on this program.)

3.     CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) NUMBER:  (The cumber assigned to
       •a EPA assistance program for  inclusion in the government-wide catalog.   Coordinate with Grants
       Information and Analysis Branch, Grants Administration Division to determine if listing is required.).

4.     SUGGESTED  PROGRAM TITLE:  (The official title of the assistance program. May or may not be
       included in the Catalogue of Federal Domestic Assistance.  (See #3.) Be concise and descriptive (40
       characters or less).
                                                                                  V-
5.     PURPOSE: (A ooe or two sentence summary description of eligible activities.)       ,,        -  ..  '.

6.     ELIGIBLE APPLICANTS\RECIPIENTS: (Who is eligible to receive this assistance from EPA? Often]
       identified in the authorizing legislation.)                                         .      ;

7.     TYPE OF ASSISTANCE: (Grant, Cooperative Agreement,  Loan)

8.     NATURE OF ASSISTANCE: (Continuing Program; Project)

9.     STATUTORY AUTHORITY:  (EPA's legal authority to fund activities; cite the Act, and the;Section..
       OGC will verify statutory authority to. award financial assistance as proposed and make necessary legab
       determinations.)

10.    REGULATORY AUTHORITY: (Cite programmatic regulations) governing the assistance program m
       addition to the standard grant administrative regulations.)

11.    COST-SHARING\MATCH  REQUIREMENTS:  (What  share must  the  applicant contribute  to  the
       assistance?  Is it  a statutory or regulatory requirement?   Reminder:  For those programs with no
       statutory/regulatory match requirements, it is national policy to encourage a minimum five  percent match
       (to States/locals) to ensure the recipient's committment to the project. The five percent  minimum is a
       regulatory requirement for all educational and non-profit organizations per 40 CFR 30.307.)

12.    LIMITATIONS: (What restrictions, if any, are there e.g., 10% statutory limitation on administrative costs
       for 319(h) Non-point source gnats?)

13.    DELEGATION OF  AUTHORITY: (Provide number and title  of Delegation of Authority(s) for these
       grants.  Identifies  the official(s) who have the authority to approve or .reject the funding of the grant and
       the official(s)  who have the authority to award the grant. Management and  Organization Division
       coordinates Delegations of Authority for EPA.)   k

14.    INTERGOVERNMENTAL REVIEW:  (Is this required? Executive Order 12372 provides for State's right
       to review applications for Federal assistance.)

15.   . PROGRAM CODEMDENTIFIER:  (The administrative code that identifies the program and assures the
       proper recording  of the  receipt of applications for  assistance, their disposition, and related financial
       transactions.  It is an integral part of  the assistance identification number. Obtain from GICS Policy
       Specialist, Grants  Administration Division.)

16.    PROGRAM ELEMENT: (Budgetary classification which identifies the source of the'funding; is supported
       by one or more authorizing sections of law and must be associated with the grant statutory authority.)

17.     OBJECT CLASS: (Budgetary classification further defining the program element.)

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         APPENDIX K
PERFORMANCE BASED ASSISTANCE
           POLICY

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           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON. DC 204«0
                               II
                                                TNt AOMtMlflTHATO*
 MEMORANDUM

 SUBJECTS   Policy on Perfornjnce-Bafed Aaaistance

 FROMi      Lee N.  Tht

 TOi        Aasistan- Administrators
           General Counsel
           Inspector General
           Aaaociate Administrator
           Regional Administrators
           Staff Office  Directora
           Division Directors
     I aa pleaaed  to  issue  the attached policy on EPA's perfor-
mance-based aaaiatanee  to Statea.  This policy repreaenta an
important step  in  the continuing effort to achieve environmental
reaults through a  strong EPA/State partnership.

     Our aaaistance to  Statea covers a .wide range of continuing
environmental programs.  In the past, the process for developing
and managing assistance agreements haa varied significantly among
programs and Regions.   This policy establishes an Agency-wide
approach fccvard negotiating assistance agreements* conducting
oversight of those agreements* and responding to key oversight
findings.  While the aim of the policy is a consistent approach
acroaa Agency programs* it  retaina considerable flexibility for
Regiona to tailor  assistance agreements to the unique environ-
mental conditions of particular States.

     This policy is effective immediately.  The accompanying
Question and Answer Package explains how PY'SC aasistance agree-
ments will be expected  to comply wit* it and details the rationale
behind major policy componenta.

     The Deputy Administrator will monitor implementation of the
Policy on Performance-Based Assistance and issue special instruc-
tions aa necessary.  I  expect Assistant Administrators to adviae
the Deputy Administrator of aetiona planned or taken to make their
program polieiea* guidance  and procedurea fully consistent with
this policy within thirty days.

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                                -2-
      Regional  Administrators art responsible for ensuring that
 their staffs and  States receive, understand and begin to apolv
 this  policy package  to their assistance activities;   To assist
 in  its prompt  and proper implementation, members of  the task
 force and  staff instrumental in  the development of this ooliev
 have  agreed to make  Regional visits to explain and discuss it.

      I  would like to emend the task  force that developed this
 policy, whose  members included managers and staff from  EPA'a
 Headquarters and  Regions,  and State Environmental Directors,
 and representatives  from the Washington-based  Executive Branch
 Organisations.  I believe  they have done an excellent job  and
 hope  their effort can serve  as a model  for  future EPA/State
 decision-making. -.

      I  look forward  to  strong Agency commitment  to this policy.
 You can be assured of my full support as EPA and  the States  move
 forward with its  implementation.

Attachments           '                                -•

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             POLICY ON PERFORMANCE-BASED ASSISTANCE
     I am pleased to issue this EPA Policy on Porformance*Based
Assistance*  This document was developed by a task fores composed
of representatives from EPA Rtadquartsrs and Regions, Stats envi-
ronmental agencies and Executive Branch Organisations to establish
.a consistent. Agency-wide approach toward negotiating and Managing
 ssistanee agreements with States.

     .The three major components of the policy describe how assis-
tance agreements should be negotiated, how a State's performance
against negotiated commitments should be assessed, and what actions
should be taken to reward accomplishments and correct problems.
The overall approach is one of EPA/State cooperation in setting
and attaining environmental goals through.effective State programs.

     I anticipate strong Agency commitment to the principles of
this policy and look forward to the strengthening of the EPA/State
partnership I believe will result from this approach*
Lee N. Thomas
Administrator
                                                             Date

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            EPA POLICY ON PERFORMANCE-BASED  ASSISTANCE
 PURPOSE

      This  policy establishes  an  Agency-wide  approach which links
 U.S.  EPA's assistance funds for  continuing State environmental
 programs to recipient performance*   The approach employs assistance
 as a  management  tool  to  promote  effective State environmental pro-
 grams.  The policy's  goal  is  the consistent  and predictable appli-
 cation of  the  performance-baaed .approach across Agency programs
 and among  Regions*

      Mechanisms  for tying  EPA assistance to  a recipient's accom-
 plishment  of specific activities agreed to in advance are conea*..«d
 in EPA's regulations  governing State and Local Assistance (40 CPR
 Part  35, Subpart A).   The  degree and manner  in which EPA programs
 and Regions have applied these regulations has varied greatly.     ^
 Through this policy*.the Agency  articulates  how it will consistently
 manage its intergovernmental  assistance*
SCOPE


     EPA's Regions will be expected to implement the portions of
this policy governing the management of assistance agreements
("Oversight* and 'Consequenc.es. of Oversight* sections) upon the
policy's issuance*  To the greatest extent possible* this policy
should also guide the negotiation of grants and cooperative
agreements for fiscal year 1986.

     this policy.supersedes all previous policies on performance-
based assistance to the extent they conflict with the approach
outlined below*  It elaborates on regulations governing State and
and Local Assistance (40 CFR Part 35, Subpart A) promulgated
October 12, 1982* and the General Regulation for Assistance Programs
(40 CFR Part 30) promulgated September 30, 1913.  This policy does
not replace funding or grant/cooperative agreement requirements
established by Federal statutes or EPA regulations.  States applying
for Federal financial assistance are required to have adequate
financial management systems capable of ensuring proper fiscal
control*

     The policy complements and is in complete accordance with
EPA's Policy on Oversight of Delegated Programs (April 4, 19S4)
and the Policy Framework for State/EPA Enforcement "Agreements*
(June 26, 1984).

     While this policy will refer to all assistance recipients as
•States* (since States receive most of IPA's assistance for con-
tinuing environmental programs), it applies equally to interstate
    local agencies which receive similar support.

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                               -2-
 PRINCIPLEJ AllD APPRdACT
 PRINCIPLES

     This policy  on performance-based  assistance  it designed  to
 strengthen  the  EPA/State  partnership by ensuring  that  EPA assis-
 tance  facilitates the  implementation of national  environmental goals
 and promotes and  sustains effective  State environmental programs.
 The policy  provides a  framework within which  EPA  and States can
 clarify performance expectations  and solve problems through a system
 of negotiation* according to  a  predictable but  flexible set of
 national guidelines.   This framework is built around several  funda-
 mental principles which will  also guide the policy's implementation}

     o EPA  will use ^erformanee-based  assistance  as •  management;
       tool to promote and recognise tne effective performance    '
       of State environmental programs, and to  ensure  mutual
       accountability;
                                                                  -m i
     o EPA  Regions  and programs will retain flexibility to tailor
       the performance-baaed  approach  to their  needs and the aoiiev'a
       guiding principles!                           .               *

    •o States and EPA  should  share a common set of expectations
       regarding performance commitments and  likely responses
       to identified problems.  There  should  be no surprises as
       EPA and States  relate  to each other under  this  policy;

                              irfoi
0 *" negotiating State-performance objectives* t*A and the
  states win seek realistic commitments and~presume good
  faith in their accomplishmenti
     o EPA and the States should maintain continuous dialogue
       for the rapid identification* solution and escalation
       of problems to top level managers;
     o EPA is fully committed to the success of State environ-
       mental programs and will seek opportunities to acknowl-
       edge their accomplishments.
APPROACH

     The policy consists of three basic parts.  The first section
describes components of assistance agreements and how they are to
b« negotiated.  The second section lays out EPA'a expectation* for
tho review and evaluation of assistance agreements and escalation
of significant findings.  The final section describes how EPA should
respond to the findings of oversightt  rewarding strong performancei
applying corrective actions to solve problems; escalating signif-
icant conflicts to top management; and, in cases of persistent per-
formance problems* imposing sanctions*

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                              -3-
     Clear expectations for program performance are crucial to an
effective EPA/State partnership.  Annual assistance agreements pro-
vide a key vehicle for expressing these performance expectations.
Negotiated work programs, contained in an assistance ag re went, forn
a fundamental basic for evaluation of State performance*

     An assistance agreement should include three components*  l) a
work program; 2) identification of support (other than federal
assistance funds) a State needs from EPA to accomplish work prograa
commitments! and, 3) a monitoring and evaluation plan*
APPROACH
in
      EPA will require that the top national priorities as iden  'led
    Agency guidance b« explicitly addressed in all State work pro*
   IBS.  As EPA and States negotiate outputs, national priorities
 should be tailored to the real environmental conditions of each State
 and Region*          ,

      Assistance agreements may include outputs based on a state's
 priorities if those activities promise to deliver a greater environ-
 mental benefit than a national priority.  State priorities should
 represent only those activities allowable under Federal statutes.

      The appropriate mix of national and State priorities will vary
 from work program to work program* according to the unique features
 of each environmental program in each State*  Regional offices must
 exercise their judgment and negotiate with States over whet combina-
 tion of national and State priorities can deliver the greatest
 environmental benefit with resources available after EPA1a top
 national priorities have been addreesed*

      To better facilitate the negotiation of assistance agreements,
 the  Agency's Operating Guidance should be strengthened through early
 State involvement in defining the order and scope of Agency
•priorities, a realistic consideration of funding limitations
 throughout its development, end specific identification of top
 priorities by Program Offices*

      The development.and oversight of an assistance agreement should
 be supervised by one senior Regional manager*  EPA Regional Admini-
 strators are ultimately accountable for all assistance agreements
 made with States and should be familiar with the significant
 outputs and conditions of each agreement.  They will be respon-
 sible for all major assistance-related decisions*

      Assistance agreements may be amended by mutual agreement of
 the  Regional Administrator and his/her State counterpart*  A major
 change in national or State priorities, environmental emergencies,
 'and  the discovery of greatly overestimated commitments are examples
 of the types of circumstances which may necessitate renegotiation.

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                               -4-
 HDRK PROGRAM

      The writ program should specify the outputs a State win Dro-
 duce under its federal assistance award (including the State match
 and level of effort) and the resources and time frames for comDlitin
 the outputs.                                                  •  "-4n

      o Outputs should be measurable commitments, reflective
        to the extent possible of real environmental results.
        They should be ambitious but realistic commitments —
        achievable objectives rather than lofty goals.

      o worn programs should focus on the objectives a  State
        will meet, not how the State will accomplish an output.'
                                                              *"1~
      o Past performance should affect work programs.  The good
        or poor performance of a State (or EPA)  identified through
        oversight  she '+ influence *he outputs and  conditions
        contained  in the next annual assistance agreement.

      o Work programs should specifically identify  completion       .
        timeframes for outputs.   EPA may also  specify interim
        milestones and reporting requirements  based on  the   '
        priority needs of national programs and  in  keeping 'with
        good management practice.   Reporting required under an
        assistance agreement should be consistent with  EPA'»
        information systems.                :

     o  States  should draft  their  work programs  but may request
        assistance from EPA  Regions in developing them.

     o  States  should be encouraged to volunteer a  comprehensive
       work  program  that indicate* activities,  if  any, outside
        those paid for with  the  federal  and State funds Included
        in the  federal  assistance  agreement budget*   Awareness
       of State responsibility* not related to  federal assistance
       greatly enhances  EPA*s understanding of  the scope of
       State environmental  programs.   Should  a  State choose  to
       submit plans  for  its entire program, it  need not indicate
       resource levels,  but only  program activities.   EPA will
       not examine these activities in  the course  of assistance
       oversight  except  when neceasary  to  ascertain the cause
       of a performance  problem or to  identify  the corrective
       action which  can  best address  a  problem.


SUPPLEMENTAL EPA  SUPPORT TO STATES

     An assistance agreement should describe  the types of support
EPA will endeavor to provide in addition to an assistance award to
enable a State to meet  its  work program outputs.   Regions should
consult with Headquarters about support which will  require Head-
quarters action.

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                               -5-


      o The assistance  agreement  should describe  the specific
        research,  technical  advice, guidance, regulations,
        contractor assistance  or  other support EPA will furnish
        States  to  enable  them  to  fulfill  specific work program
      .  outputs, making clear  that accomplishment of the outputs
        is contingent upon the receipt of the EPA support.   If
        EPA does not furnish the  support  described in the assistance
        agreement, the  State will be relieved of  output commitments
        contingent upon that support.


 EVALUATION PLAN

     The final component of an assistance agreement is a plan
 for EPA's evaluation of State performance*  The  evaluation plan
 should be mutually acceptable to EPA and a State*

     o The plan should outline the schedule and  scope of review
        EPA will conduct and should identify areas the evaluation
        will focus on*                                           .

     o An evaluation plan must specify at least  one on-site
        review per year, performance measures, and reporting
        requirements.
                      ASSISTANCE OVERSIGHT


     EPA should oversee assistance agreements both informally and
formally.  Regions and States should maintain continuous dialogue
so that States may alert EPA to problems they are experiencing and
EPA can monitor State progress toward accomplishing outputs.  EPA
should also periodically conduct a formal evaluation of State per*
formanee.  Oversight should Identify the successes and problems
States have encountered in meeting their commitments.  Oversight
also entails the joint analysis of identified problems to determine
their nature, cause* and appropriate solution, and the escalation
of significant findings (both positive and negative) to top managers
in the Region and the State.


APPROACH

     The formal assessment of State performance under assistsnco
agreements should occur as part of EPA's comprehensive review
and evaluation of State programs.  This process is governed by
EPA's Policy on Oversight of Delegated Programs which states
that evaluations should focus on overall program performance
(within a given program), rather than individual actions! they
should be based on objective measures and standards agreed to
in advance; they should be conducted on-site at lease once a
year by experienced, skilled EPA staffi they should contain no

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                                •6-
  surprises  for  States regarding content  or expectations?  and
  results  should be  documented in a written report.

       EPA should adhere  to  these principles of  oversight  and  to
  the  scope  and  schedule  of  evaluation agreed to in  the  assistance
  agreement*     .                                         •  _       .


  FEATURES

  o States are responsible for notifying  EPA in  a timely manner of
   problems they experience in trying  to accomplish their outputs.
   Likewise, EPA is responsible for promptly notifying  States of
   its inability to supply promised support.

  o Formal and informal evaluations by  EPA should be constructive,
   conducted in  the epirit of  promoting good performance through
   problem-solving,-not  fiult-finding.

 o EPA'a review and evaluation  should  emphasise overall performance
   within each program, concentrating  on the composite  picture
   revealed by total outputs and the quality of accomplishments.

 o EPA should focus on a State's performance against work .program
   outputs and conditions unless other aspects of a State's program
   (procedures,  processes, other activities) must be examined to
   analyze a problem or find its appropriate solution.-

 6 Formal  review of State performance under the assistance agreement
   will entail,  at a minimum, one en-site annual evaluation of each
   assistance agreement.

 o Review  and evaluation of assistance agreements should be con-
   ducted  by skilled, experienced EPA evaluators.

 o Oversight findings, successes as well  as problems,  should be
   documented  to establish an accurate record of State performance
   over time.

.o Assistance oversight should use existing reporting  and evaluation
   mechanism* to the extent possible.
                                 Or
      Once  the assistance oversight process has identified  and
 doctnented areas in which States have had success or difficulty
 in meeting their commitments under the assistance agreement, EPA
 should  respond to those oversight findings.  Potential responses
 range from rewards and incentives for good performance, application
 of corrective actions to solve uncovered  problems, and the imposi-
 tion of sanctions to address persistent,  serious performance prob-
 lems.

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                                 -7-
                	.»o* rtaarvPQfc

       Tha Aganey'a goal in providing parformanca-baaad aaaiatanca
  is to promota national prograa objactivaa by aupporting affactiva
  Stata anvironaantal prograas.  Action* in raaponaa to ovaraight
  findings will ba oriantad toward finding tha aoat affaetiva
  ways  to maintain or iaprova a Stata prograa1s parforaanca.
  wharavar possibla,  EPA ahould acknowladga axcallant  parforaanca
  and halp Stataa  aolva  problaaa which iapada parforaanca  through
  corractiva actions*


      If problaas ragarding Stata achiavaaant of work prograa
 coaaitaanta parsist, EPA ahould pursua corractiva atapa aa
 nacaaaary baaad on axparianca with a givan Stata.  Zn ganaral,
 aanctiona ahould ba  iapoaad only whan corractiva actiona hava
 failad to aolva parsistant, significant parforaanca problaas.
 Bafora taking  any sanction against  a Stata, EPA ahould raisa
 tha parforaanca iasu*  to  tha highast lavala of tha Ragion and
 Stata  nacaaaary to n«yotiata an affactiva solution to tha
 undarlying problaa.  Sanctiona should not ba nacaaaary if both
 partias ara axplicit* straightforward and  raalistic in  thair
axpactationa of ona anothar and approach  tha aaaiatanca agraaaant
procaaa in tha apiri't of eooparation.


    nrrvES       .


    o  Mian a Stata aaats  its nagotiatad coaaitaants or othar*
       wiaa daaonstratas succass,  tha EPA Ragional  Offica
      ahould taka stapa to acknowladga  axcallant Stata
      parforaanca at tha conclusion  of  tha ovarsight  raviaw
      or at tha and of  tha' aaaiatanca agraamant pariod.

    b EPA is coaaittad to publicising Stata prograa suceass.
     Aasurad racognltion of a Stata1a anvironaantal aehiavaaants
      ia ona  of the aoat affactiva incantivas  at EPA'a disposal*
     Publicising aecoapliahaants also banafita Stataa with par-
     foraanca  problaaa by providing thaa with aodals for suecaaa.

   o Zn  ganaral,  whan  a Stata daaonatrataa ataady  prograas or
     a suatainad  laval  of  high parforaanea against nagotiatad
     coaaitaanta, EPA will inatituta tha moat  appropriata rawarda
     for achiavaaant and ineantivaa  to  proaota continued  auecaaa.
     Poasibla actiona includa  but ara not  limitad  tot

         •  Raducing tha nuabar, laval, scopa and/or
            fraquancy of raviawa, reporting, or in-
            apaetiona to tha ainimua nacaasary for
           affactiva national program aanagaaanty

         - Zncraasing  Stata flaxibility in using  funds
           for spacial  proJact* or  Stata prioritiaai

        -  Offaring financial  incantivas (within axisting
           rasourcas),  such aa aupplaaantal funding)

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                              -8-
              Publleising program succeeaes through joint
              media presentationa, awards* apecial letters
              of conn*ndation to the Governor, or technology
              tranefer to othar States, EPA Regiona and
              Haadquartara.
CORRECTIVE ACTIONS

     o Whan oversight review uncovers a performance problea and
       determines its cause, EPA and the State dust act on those
       findings by taking appropriate corrective steps.

     o Regions must initiate discussions with those States where
       problema have emerged, and work cooperatively with them to
       establish effective remedial strategies.  This negotiated
       strategy should specify the tine frame during which EPA win
       expect the problem to be resolved, and any interim milestones
       that will be necessary to monitor State progress.

     o Regions and States should follow a corrective action strat-
       egy based on the unique history and needs of « given State. -*
       This policy does not prescribe any particular sequence of
       corrective actions which mist be undertaken, nor does it
       link specific corrective actions to particular types of
       performance problems.

     o Possible corrective actions include but are not limited tot
       providing EPA technical or managerial assistance, training,
       or additional resourcesi increasing the number and/or fre-
       quency of reporting and oversight requirements* and shifting
       State resources or otherwise renegotiating the assistance
       agreement.

     o If a Region is net able to provide a particular essential
       type of specialised assistance to a State* the Region ahould
       bring this corrective action requirement to the attention
       of Headquarters program managers for action as appropriate.

     o The intent of this policy is to see that EPA assumes a
       constructive approach in responding to State performance
       problem*.  When corrective actions have failed* or IPA and
       a State cannot agree on a corrective action* the Region
       may consider imposing a sanction.  If a sanction is contem-
       plated* the performance iaaue ahould be escalated to the
       highest appropriate level of EPA and the State.  The follow-
       ing aequence should be observed whenever possible to ensure
       that aignificant problems receive prompt attention and are
       solved expeditiouslyi

         a.  The Regional Division Director responsible for
             managing the assistance agreement will rsise the
             issue to the attention of the Deputy Regional
             Administrator or Regional Administrator and advise
             his/her State counterpart of this notification.

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                               -9-


             The Regional Administrator will personally contact
             the State Environmental Director or other appropriate
             State manager  to  attempt to reach agreement on a
             corrective action, and to discuss the contemplated
             sanction.

             National Program  Managers should be advised of any
             State program problems warranting a sanction, and
             should, be notified of any final decision to take
             such, action*

             If negotiations between the Regional Administrator
             and State counterpart fail to solve the problem,
             the Regional Administrator should judge under what
             circumstances notification of the Governor should
             occur*
SANCTIONS
     o Regional Administrators must recognise that national re-
       sponsibility for any State environmental program continues "*
       after the imposition of a sanction.  They should make ar-
       rangements for completion of crucial outstanding outputs
       and should take steps to promote and sustain activities
       the State is performing effectively.

     o As with corrective actions, any decision to impose a
       sanction must be based on EPA's particular experience
       with any given State*  The Regional Administrator is
       responsible for determining when a problem may be signif-
       icant enough to warrant such action, and for determining
       the appropriate type of a*Action to apply.
                                 •

     o Current regulations detail those sanctions traditionally
       available to EPA.  They includes  step-work actions,
       withholding payment, suspension or termination of agree-
       ment for cause, agreement annulment, and other appropriate
       judicial or administrative actions.

     o Adjusting the schedule for award or payment of assistance
       funds to quarterly, semi-annual, or other similar restrictive
       disbursement schedules is considered a sanction under the
       terse of this policy.  (The customary mechanisms for the
       release of funds, such as standard letter of credit
       procedures, are not affected by this policy*)

     o 40  CPR Part 30 Subpart L details formal  procedures for
       resolving EPA/State disputes concerning  assistance
       agreements.   These procedures provide the opportunity
       for a State to document the  grounds for any objections
       to  the  imposition of a sanction and for EPA to review
       its decision and  address the State's objections on the
       basis  of  a written record.

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            Policy on Performance-Based Assistance
                  Question and Answer Package


PURPOSE

1*  what  is the purpose of this policy?

         This policy lays out a framework for managing EPA's
    assistance to States for continuing environmental programs.
    It ties performance against negotiated vork program outputs to
    federal financial assistance funds*  It provides a consistent
    approach for managing assistance programs through negotiating
    work outputs* overseeing States' performance against agreed
    upon commitments* solving problems through corrective action
    strategies* and imposing sanctions when corrective actions
    have failed or EPA and a Stato cannot agree on a corrective
    action strategy*

         Although the policy aims for a consistent approach toward
    managing assistance agreements* it provides Regional managers
    with flexibility to use their best judgment in applying the
    provisions of this policy to specific conditions that exist   ,
    within their Regions and among programs*


TIMING

2.  How will this policy affect FY'86 assistance agreements?

         Any py*a< assistance agreement negotiated after the
    issuance of this policy will be expected to conform to
    all of its provisions*
                         *  *
         Assistance agreements for FY'86 agreed upon prior to
    the issuance of the Policy on Performance-Based Assistance
    will not have to be renegotiated.  However* EPA's Regions
    will be expected to manage those assistance agreements
    according to the approach outlined in the "Oversight" and
    "Consequences of Oversight" sections of the policy.

         FT*If assistance agreements may be amended if a Region
    and State both'agree to do so* under the terms of governing
    regulations* .

         All assistance agreements for PTf87 will be negotiated
    and managed according to this policy.


PRIORITIES

3.  Hhy should EPA assistance support some State priorities
    in addition to national priorities?

          "State priorities" refer to activities which are •"ow-
    able  for funding under federal statutes and which* «"»°"«n
    not always important enough nationwide to warrant a place

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                               -2-
4.
on or at  the  top of  the national  priority list,  arc  of
great concern to a particular Stata  dua  to that  State's
unique environmental conditions.   Recognizing  that aach of
EPA1s continuing environmental programs  requires a combination
of Padaral  and Stata resources, EPA  may  diract some  of its
assistance  to support what  Statas view «« their  most
significant initiatives,  if those activities promise to
deliver a greater environmental benefit  than a national
priority. (National  priorities include Regional  priorities).
In many instances, a State's priority  activities will cor-
respond closely to the list of national  priorities in a
given program,  but the Stata nay  wish  to distributa  rasourcas
among those activities with a slightly diffarant emphasis*
The Regions have flexibility under this  policy to negotiate
support for those activities, consistent with  Program
Guidance.                                         '''•'?.. '••  ' >:
                                                 »•    ., .''».- •  • ?

Bow is the  proper balance between national and Stata
priorities  to be achieved?

     The  appropriate nix of national and Stata priorities    ~*
will vary frosi  work  program to work program, according to
the unique  features  of each environmental program, in each
State.  After ensuring that top national prioritie*  as  ,
identified  in the Agency Operating, Guidance and  Regional
Guidance  are  included in a  work program*  Regional officials
must exercise their  judgment and  negotiate with  a State
over what combination of national and  State priorities can
deliver the greatest environmental benefit,given the remaining
resources available.  .
GUIDANCE                                                    ,   .
                                                            v'.• •
S.  How should the Agency Operating Guidance be refined to
    facilitate improved work planning?                      :  %

         EPA'a annual Operating Guidance should clearly arti-
    culate national priorities.  The Agency Priority list should
    be limited to those top priorities across all media.  Bach
    Program. Office should also list priority activities in its'
    media area, ranking them and identifying those which must
    be reflected in every State work program.  The Program Office
    and Agency priority lists should complement one another.
    EPA will involve states early on in defining the order and
    scope of Agency and Program Office priorities.

         EPA Regions should negotiate work program outputs based
    upon priorities as identified and ranked in the Guidance.
    Carefully delineated priorities will help ensure work programs
    that contain clear and aeasurtable output commitments.

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                                -3-


  ESCALATIOH
  6.   What 1§ the purpose of the escalation sequence outlined  in
      the  policy?

           The Policy  on  Performance-Based  Assistance establishes
      a problem-solving approach toward managing  EPA assistance to
      States.   It has  been designed  to promote  the prompt  identi-
      fication and resolution of any problems States encounter in
      trying  to fulfill the  output commitment!  they  agree  to meet.
      The  purpose in laying  out  a process by which issues  can be
      surfaced  quickly up  the chain  of command  in both Regions and
      States  is to ensure  that significant  problems  receive the
      prompt attention of managers capable  of solving those problems
      expeditiously.  This sequence  was included in  the policy to
      address concern that State  performance problems too fr;^  -tly
     lie unattended at the  lower levels of Regions and States where
   * they become bigger problems.

           While this process calls for consultation with State   ~m
     representatives and notification of the National Program
     Manager, EPA's Regions are responsible for managing the
     escalation sequence and rendering any final decision to
     impose a sanction*


 7.   Under what circumstances should the  escalation  sequence be
     followed?

          The escalation sequence was  designed  specifically  as a
    mechanism for obtaining quick decisions on whether  EPA  will
     impose a sanction on a  state demonstrating performance  pro-
    blems.   By establishing a  predictable  process for addressing
    these  major  conflicts,  the policy seeks to expedite,  not er.-
    cumber with  formality*  resolution of the most serious problems
    likely to be encountered  in an  assistance  relationship.  Nhile
    this escalation sequence applies uniquely  to decisions regarding
    sanctions*- the policy encourages the escalation of  any signi-
    ficant information  (positive and negative) regarding  the per-
    formance  of  a. State program within both Regions and States as
    appropriate.


QUARTERLY  DXSBORSEflCNTS

8.  Why does  this policy  classify quarterly disbursement schedules
    (or similar  restrictive disbursement schedules)  as sanctions?

         Quarterly disbursement  schedules  involve awarding a
    portion of a State's grant each quarter or imposing quarterly
    performance-based restrictions on standard payment procedures.
    The Task Poree agreed that putting States on quarterly or
    semi-annual disbursement schedules makes it difficult for

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                              -4-
                         •             '                    *

      States to plan their programs, which are generally based
      a yearly cycle.  The Task Force felt that this type o
      would signify a lack of faith in a state's ability to  parser
      Consequently, the Taak Force viewed this type of action as  a
      sanction which would reflect a State's inability to perform
      As with other sanctions, quarterly diabursement schedules,
      should not be imposed before attempting to reaolve the problem
      through more cooperative efforts (corrective actions)  or after
      a demonstration of continued past performance problems by a
      State.  As with all sanction decisions, the decision to place
      a State on a quarterly disbursement schedule should be made
      at the highest level  of the Region.

           A quarterly disbursement schedule signifies that  the
      recipient's performance would be reviewed after each quarter
      to determine whether  full  release of funds would be made
      for the next quarter.   Order the policy,  putting a State
      on this type of schedule is considered to be a sanction.


 9.   Does  thia  policy affect draw-downs under  the letter of credit"*
      or other payment mechanisms?

          The customary mechanisms for the  release of funds are
      not affected by this policy.   For example,  letter of credit
      procedures,  which are  used  by most Regions,  provide a
      system  whereby  the recipient may promptly obtain the funds
      necessary  to finance the Federal portion  of  a project,  and
      which precludes  the withdrawal of  funds from the Department
      of the  Treasury any sooner  than  absolutely necessary.
      (Payment procedures are described* in the  Assistance Admini-
      stration Manual,  12/3/84, Chapter  33.)  However,  to the
      extent  that  Regions Impose  performance-related restrictions
     on letter of cr**Ut or  other  payment mechanisms,  these
     restrictions would be considered a sanction  under  the policy.


10.  How will this policy affect States currently on  quarterly
     disbursement schedules?

          Currently, a number of States are on quarterly disburse-
     ment schedules, primarily under the RCRA program.  Thia policy
     doea not prohibit the practice of  imposing a quarterly schedule
     on a State, but it does consider this practice a sanction.
     It is not necessary to amend FY*8S or FT*!! assistance agree-
     ments that already place States on quarterly disbursement
     schedules.  However, States should not automatically be either
     extended or taken off of quarterly schedules for the following
     year's grant cycle.  In deciding whether to continue or dis-
     continue quarterly disbursements, Regions should review state
     performance.  A decision to continue or discontinue a quarter
     schedule should be based on the presence or absence of
     performance problems, or successful or unsuccessful attempts
     to resolve the problems through corrective steps* • Regional
     and programatie differences call for Regional managers  to
     use their best judgment in making such decisions.

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                                -5-


 11.  What does  this  policy  imply  for withholding fund* Cor
     problem* that are  not  directly related  to a State'* perfor-
     mance of negotiated output*  under  the assistance agreement?

          This  policy relates primarily to a State'* performance
     of negotiated output*  under  an a**l*tance agreement.  The
     deciaion to withhold fund* from a  State for output-related
     problem* 1* a sanction which should be  preceded by appropriate
     corrective action* and notification of  high-level manager*.
     However, fund*  are sometimes withheld for problem* not directly
     related to a State'* accomplishment of  negotiated output*
     under an assistance agreenent.  Thi* may occur a* a re*ult
     of problem* with a State1* financial reporting and accounting
     system.  For problem*  resulting from improper fiscal manage-
     ment or administrative practice (but not directly related to
     a State'*  performance  on work output*), the Region* may *-
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                                -6-
IS.  How can the assistance agreement be amended?

          Both the policy and the regulation allow for the assist*
     ance agreement to be amended at any tiae by mutual agreement
     between the Regional Administrator and the State*  Either
     party (State or Region) may ask for amendment of the assist-
     ance agreement.  (See 40 CPR Part 30-700, Subpart G.)


16.  DO Regions have discretion to devise corrective action
     strategiea and determine the timing and sequence of
     corrective setions?

          Yes.  Regions should attempt to implement corrective
     action- strategies which respond to the problem in a timely
     and appropriate manner.
17.  Why doesn't the policy deal with the 'quality? of output*?

          while this Policy on Performance-Based Assistance
     focuses on State performance against measureable outputs,
     it complements and is in complete conformance with EPA's •
     Policy on Oversight of Delegated Programs, which calls for
     review and evaluation activities which ensure quality
     State programs.  Most of EPA's programs have instituted
     evaluation programs which examine not only •beans,* but   t,
     the quality of those beans.:  The oversight of work program
     outputs should occur *s part of a comprehensive examination
     of State program performance.
18.  Row 
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          APPENDIX L
CARRYOVER POLICY (COMPTROLLER
  POLICY ANNOUNCEMENT 88-09)

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       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON. D.C. 204W
                            MAY  6
               COMPTROLLER POLICY ANNOUNCEMENT
                           No. 86-09
                                                       OFtCE OF
                                                     AMD RESOUNCES
                                                      MANAGEMENT
MEMORANDUM

SUBJECT:



PROM:  ,



TO:
Disposition
Assistance
bated Balances of
David P.
Comptroll
         i

Assistant Regional (Administrators
Management Division/Directors
Senior Budget Officers
Regional Comptrollers
Financial Management Officers
     This Policy Announcement clarifies EPA policies and
procedures for the disposition of unobligated balances of
assistance awards, i.e., grants and cooperative agreements.
It describes the circumstances when EPA may carry these funds
forward and provides specific procedures to ensure proper
accounting for assistance awards.

POLICIES AND PROCEDURES

     There are three attachments to this Policy Announcement.
Attachments I and ZZ describe policies and procedures appli-
cable to the .disposition of these funds.  These policies and
procedures address all financial assistance programs except
those funded from no-year appropriations.  Guidance on two of
the no-year appropriations can be found in Comptroller Policy
and Procedure Memorandum 9-P, "Recovery and Use of construc-
tion Funds,* and .will be found in the Resources Management
Directives System 25SOD, Superfund Financial Management, which
will be issued shortly.
     Attachment IZI contains examples of how this guidance
applies to specific types of assistance agreements.

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EFFECTIVE DATE                              '

     Allowance Holders Bust  ensure  that  assistance award's
made from their  respective allowances  are  adninistered  in
accordance with  this  Policy  Announceaent no later  than
June 30, 1988.

FOR ADDITIONAL IHFORMATION

     If you would like additional inforaation  on the  specific
policies and procedures described in this  Policy Announcement,
please contact Bob Cluck, Fiscal Policies  and  Procedures
Branch, Financial Management Division, at  382-5113.

     Inquiries about  the Agency's general  policies  and
procedures on -the administration of assistance projects
should be aade to Scott McMoran, Grants Policies and  Proce-
dures Branch, Grants  Administration Division,  at 362-5293.

     Questions concerning recoveries of funds  under. Agency
appropriations and about the scope of this  Policy Announr*r  ~t
(i.e., the statutory  authorities to which  it applies) should
be directed to Rick Peterson, Budget Control Section, Budget
Formulation and Control Branch, at 382-4212.

"SUNSET PROVISIONS"

     The guidance in  this Policy Announcement  will  be
Incorporated in the Resources Management Directives System
(RMDS) chapter on assistance projects (RMDS Division  2550C.
Chapter 2).  This chapter, which covers all financial manage-
ment guidance relevant to assistance awards, is currently  •
under development and will be issued later this fiscal year;.
The RMDS chapter will supersede this document.             <:

Attachments                                                ,.

ccs  Harvey Pippen                                         .!
     J. Richard Bashar
     John Sandy                                            ;i
     Alvin Pesachowitx                                     ;
     Vincette L. Goerl
     Tony Mustek
     John Elliott
     Carole Ansheles
     FMD Branch Chiefs

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                                              Attachment I
                            DISPOSITION OF UNOBLIGATED
      Accounting for the disposition of recipients' unobligated
balances of assistance awards requires at least two actions:  a
downward adjustment to one budget period's funding and a comple-
mentary accounting entry to show the disposition of those funds.
Regarding  the disposition of unobligated balances of project
type assistance awards, these funds generally remain available
to recipients until the project is completed.  With respect to
continuing environmental programs, funds can be made available
in subsequent budget periods only if the source appropriation
for those  funds has not expired.  A detailed description of these
policies  is found  below in  Section IX.  The policies are also
summarized on the  chart following page  4 of this Attachment.

I.  BACKGROUND AND BASIS FOR POLICIES

    A. EPA Appropriations*   Each year  EPA  receives, several
appropriations from Congress to fund the  numerous  programs  for
which it is responsible.   Besides  appropriating funds  to pay our
 internal expenses. Congress also gives EPA appropriations that
 are intended to fund a wide variety of assistance agreements
'(grants and cooperative agreements),  among other things.

      The.  appropriations may limit the time periods within which
 the funds are available for Agency obligation.  Grants and co-
 operative agreements are generally funded under either two-year
 or "no-year"  (i.e., indefinite period) appropriations.

       When Congress limits the time period in which funds are
 available, it  increases its control over  the resources available
 to EPA to carry out authorised programs.  If EPA  does not obli-
 gate appropriated funds for assistance awards  or  other approved
 purposes  during  the  life of the appropriation, the funds will
 expire*   Should Congress wish to  fund activities  in subsequent
 periods,  new funding would be provided in later appropriations.

        In contrast, when Congress  appropriates "no-year"  funds,
  these funds remain available  until fully expended '--  they  do
  not expire.  Both the Construction Grants Program and Superfund
  activities have historically been funded with such appropriations.
  Congress may choose to add to the Agency's "no-year"  balances
  through  subsequent appropriations.

     B. EPA Assistance Awards.  When EPA awards a grant or cooperative
  agreement, the agreement  defines a specific "budget period" during
  which the funds  obligated by  EPA are  available to the recipient.
  Assistance agreements also define the project period* which is the
   length  of time  EPA  specifies  to complete the  "project* described
   in  the  agreement.   The project period nay be  made up of one or more
   budget  periods.   (In some cases,  such as the  Asbestos school Hazard
   Abatement Act program,  it may be  appropriate  to  have open-ended
   work progress milestones  or  similar  criteria.)

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     The recipient  (e.g., .a State or  local  government agency,
or a univenity) uses the EPA award as  its  authority to enter
into its own "obligations" £' for internal  expenses, contracts.,
etc., to carry out  program/project objectives during the budget
period.  For various reasons, a recipient may not be able to
obligate all the funds awarded by EPA.  At  the end of each budget
period the recipient must report any  "unused* funds to EPA on
their Financial Status Report.  The "unused" amounts are shown as
the unobligated balance of Federal funds.   The final disposition
of -those unobligated balances depends on several factors, as
discussed in Section ZZ below.

   c. GAP Review.   Zn 1984 6AO reviewed EPA compliance with the
Federal Managers Financial Integrity Act (FMFZA).  In that re-
view, they raised questions about EPA's apparent inclusion of
unexpended balances carried forward to grants several years
after the source appropriation expired.  As a result, in our
letter to the President on FMFIA weaknesses, we Bade a coamit-
sient to review our  current practices  for making recipients'
unexpended bala...js available in later budget periods.  T..~
policies and procedures set out in the following sections are a
result of that review and seek to strengthen our management, of
those funds.                                             'r

II. GENERAL POLICIES

   a. Adjustments for Unobligated Balances.  EPA assistance
awards are recorded as Agency obligations in EPA's Financial
Management System (FMS).  They are identified in FMS by obliga-
tion document numbers, which are derived from the assistance
identification number that EPA assigns to the assistance award.
Both a project number and budget period are encoded in this.
identifier.

      When adjustments are to be made to obligation balances,
they must be supported by written amendments to the assistance
agreement that established the original obligation.  Assistance
award officials must provide to their servicing financial manage-
•ent offices (FMO)  copies of the documents  used to effect the
amendments.

   b. Decreases in  Obligation Amount«.  Decreases in budget
period funding levels typically occur after a budget period ends
!   In order to understand and implement the policies and procedures
~"   described  in this document, it is very important to distinguish
between EPA obligations and recipient obligations.

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and  the  recipient determines what,  if any,  portion  of  the  award
was  unused  (.i.e., unobligated by the recipient)  during the budg«
period.  However, decreases could be executed  for various  reasons
during the  budget period.  In either case,  the adjustments oust
be properly documented and provided timely  to  the FMOs, as noted
above.

     The financial management office (FMO)  will  record the
decreases in budget period funding  in the Financial Management
System (FMS).  The accounting procedures are outlined  in section
III.of this attachment.  Whether the decreases against one bud-
get  period  aay be available in a subsequent budget  period  depends
on the factors described below.

   c. Disposition of Adjusted Amounts.  Unobligated balances of
assistance  awards from one budget period have  generally been made
available in subsequent budget periods either  as additional fund"
ing  for  the later budget period or as partial  funding  in lieu"oT
a like amount from a new Agency appropriation.However, before
taking either action, an award official Bust first  determine
which of the fol -wing criter-'^ fit:

      1. Project agreements.  Project type  assistance  agreements
involve  undertakings with a discrete outcome,  product  or report.
Most of  £PA.'a assistance agreements awarded in Headquarters are
examples of this type, although project agreements  may be  made
in the regions, and by other EPA offices as  well.  The  project
periods  and funding for these projects are often provided  incre-
mentally over several years.  Any reports submitted at the end of
a budget period, or at any time prior to the final  report, product
or outcome, would be merely informational and  are not  independent
or separate from the final project outcome, product or report.

  Criterion: With respect to project agreements, unobligated
            . funds from one budget period may be made  available
             in a subsequent budget period of  the same project
             by properly executing an assistance amendment as
             long as the general project scope of work remains
             unchanged.  It there are major changes in the scope
             of work* the unexpended balances  may be carried
             forward only if the source appropriation  for  those
           .  balances has not expired prior to the  date of the
             amendment.
      2. Continuing Environmental Program and Other General Support
Assistance Agreements.In addition to project type assistance, EPA
            iding for a number of environmental programs or other
                        The recipients are often State or local
provides funding for a
continuing activities.
governments, but may include organizations involved in general
research activities.
  Criterion: With respect to program agreements, unobligated
             balances from one budget period of a continuing

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             environmental program or activity may bs made
             available in a subsequent budget period of that
             program c  activity at long as: 1) the transfer
             to the su-sequent budget period it aade before
             the source appropriation for those fund* expires,
             and 2) the assistance agreement includes a
             special condition limiting the recipient's
             obligation of these funds before the end of
             the subsequent budget period or within one year
             of the amendment, whichever is earlier.

      3. Recoveries of Assistance Award Balances.  If a recipient's
unobligated balances will not or cannot be available in *.•«*>»*-
qSent budget period, the downward adjustment will be considered a
recovery to the source appropriation,                ,

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'

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                                              Attachment II
          PROCEDURES FOR THE DISPOSITION OF UNOBLIGATED
                  BALANCES OF ASSISTANCE AWARDS
I.  TRANSFER OF FUNDS FROM OKE BUDGET PERIOD TO ANOTHER

     Transfer! of funds from one budget period to Another must
be documented by the execution of two complementary and concur-
rent EPA Assistance Agreement/Amendments (EPA Fora 5700-20A).
(EPA'a optional amendment fora, 5700-208, or other appropriate
fora, say be used in the following procedures in lieu of the
5700-20A to amend agreements as long as the same accounting
information outlined below is included on the fora.)  The
executed forms Bust be provided to the servicing financial
management office when signed both by EPA and the recipient.

     The first Fora 5700-20A/B will decrease funds awarded for
the earlier budget period.  For the succeeding budget period, the
second 5700-20A/B Bay:  1) provide interim funding* 2) increase
the funds availat    or 3) replace "current year' (i.e., new
obligational authority) funds.  In the last instance, the dis-
placed funds could be used by the regions as discretionary funding
for other approved purposes.

   a. Decrease to prior budget period.  In order to decrease
funds awarded for one budget period, so that they may be carried
forward to a subsequent budget period, a Form 5700-20A/B must be
completed and signed by the Award Official.  If a decrease is
made before the end of the budget period, or at any time without
the support of a signed FSR or other signed authorization, the
Form 5700-20A/B aust be signed by the recipient's authorizing
official.

     In lieu of the recipient official's signature on the 5700-20A/B,
an award official can use the recipient's interim or final FSR if
the FSRt  1) covers the full budget period, and 2) is signed by an
authorized recipient official.  If this option is used, the award
official aust provide the FSR along with the 5700-20A/B signed
by the award official to the Financial Management official to docu-
ment the transaction.

     the financial data will be entered on the Fora 5700-20A as
followsi

     1) Itea 1.  The assistance ID in item 1 serves as the
obligating document number for the Financial Management System
(FMS), thus serving as a.common data element for grants and
finance.

     2) Item 22.  The narrative in this item will include a
brief description of the action being taken by this amendment to
the  original award.

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     3) It«a 30.  Hen 30  ("EPA Amount  this Action") will
the former award, the aiiount of the decrease  in  *( -)" and  the
amended total.   [(The financial management office trill use Trans-
action code 050.2 to record the decrease  in the  Financial
Management System (FMS)].

     4) Items 34 and 38.   Iteas 34 (Recipient Contribution) and
36 (Allowable Project Cost) will be modified  to  •how the effect,
if any, of this  amendment  on these categories.

     5) Item 39.  Iten 39  (Fiscal) includes the  standard accounting
infcreation for  the funds  being transferred.  The amount of the     ;
decrease will,be entered in parentheses in the last block on that
line.

   b. Transfer to Succeeding Budget Period.   A properly completed
Form 5700-20A must also be executed to  make prior year balances
available, where allowable, for the recipient's  obligation during
the succeeding budget period.  The financial  data will be entered
as follows:

     1. Item 1.  Again, the assistance  ID will be entered here.

     2* Item 22.  A brief  explanation of  the  action will be
included in the  narrative.

     3. Item 30.  This item would be completed only if the:aaoujfe
of the award for the "current" budget period  were being decreatWr
i.e., the amount being carried forward  was displacing current year
funds.  The amount of the  decrease would  be placed in "( )."

     4. Item 32.  This item will include  the  former award, if any,-'
the amount being transferred forward from the prior budget-period,
and the amended  total for  this category of funds.  (The financial
management office will use Transaction  Code 059.1 to record the
increased amount available under this obligation document number.)

     5. Items 34 and 38.   Items 34 (Recipient Contribution) and
38 (Allowable Project cost) will be modified  to  show the effect,
if any, of this  action on  these categories.

     6. Item 39.  Item 39  (Fiscal) includes the  standard accounting
information for  the prior  budget period's funds  that EPA is trans-
ferring to this  budget period  for the recipient's obligation.  The
dollar amount being brought forward will  be entered in the last
position on that line, following the other accounting data.

     If the amount being transferred forward  is  intended to displace
amounts already  awarded from current year funds, a second line of
accounting data  must be entered on line 39.   The data would be the
accounting information associated with  the decrease, and th« aaount
of the decrease  would be placed in parentheses in the final block
of that line  item.

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     If  the  less  structured  Fora 5700-208  is  used  to execute  the
preceding actions,  the  sane  indorsation au»t  be contained  in
readily  identifiable  fora  on that document.

XI.  DISPOSITION  OF AWARD  BALANCES AT  END  OF  A CONTINUING
ENVIRONMENTAL PROGRAM OR AT  EKD OF PROJECT PERIOD  FOR OTHER
ASSISTANCE PROJECTS

     If  a continuing  environmental program is terminated,  or
whenever a project  period  ends  for other types of  assistance
•wards (e.g., project type agreements),  the PSR for these  pro-
jects Bay contain balances of Federal  funds unobligated by the
recipient.   In such a case,  a Form S700-20A/B Bust be completed
to decrease  the award by that amount.   The 5700-20A/B and  FSR
will be  subaitted to  the servicing financial  management office
•o that  the  deobligated amount  can be  recorded in  EPA's FKS.

     The deobligated  amount  .would create a recovery to the source
appropriation.  Detailed information on recoveries is found in
Office of the Comp'"oiler  Policy and Procedure Memorandum  (PPM)
13-B, "Overrun and  Recovery  of  .rior Year  Obligations."  This PPM
was amended  in part by the OC aemorandum of September .12,  1984,
entitled "Recertification  of Funds," and is being  revised.

XII.  DEOBLIGATION  OF EXPIRED FUNDS        .    .

     Generally, effective  management of assistance awards  and
timely processing of  financial  reports (e.g., the  FSR) both by
the recipient and by  CPA can keep expired, unavailable aaounts
to a minimum.  Charging outlays'first  against older funding
sources  of an assistance agreement, where  otherwise appropriate,
is one way of avoiding the loss of funds.

     In  the  following two  instances, deobligations would be
necessary.   First,  an assistance recipient might submit a  final
FSR for  a prograa grant budget  period  after the Appropriation
which originally  funded that budget period had expired.  If the
recipient reports on  that  FSR that  they have  an unobligated
balance  of Federal  funds,  EPA would prepare a 5700-20A to docu-
ment the decrease and to use as a basis  to record a corresponding
deobligation in FMS.  Second, if as a  result  of an audit, costs
•re disallowed and  the source of funding for  these costs has
expired, the amount of the receivable  for  the disallowed costs
would be deobligated.

IV. FUNDING  BUDGET  PERIODS THAT EXTEND BEYOND THE LIFE OF AN
APPROPRIATION

     In  some instances, aesistance  project budget periods are not
concurrent with the Federal  fiecal  year.   When they are not con-
current, a budget period could  very possibly be funded by an
appropriation that  expires before the  budget period itself end*.
Such awards  are allowable  as long as EPA's obligation of the
assistance funds  occurs before  the  source  appropriation expires.
In the case  of amendments  transferring unobligated balances
to a subsequent budget period,  the  criteria in Attachment I,
Section  II.c aust also be  set.

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                                              Attachment III
              APPLICATION OF POLICIES AND  PROCEDURES

                              ON THE

          DISPOSITION OF RECIPIENT UNOBLIGATED BALANCES


     The following examples show how EPA's policies and procedures
on the disposition of recipient unobligated balances would apply
to SPA assistance projects.  In reality, of course, how these
rules apply to any specific assistance project will be affected
by many possible variables.  These variables  include the State
fiscal year (whether it is coincident with the Federal fiscal
year or not), the type of assistance program, differing regional
practices, when the action was taken (before  or after the end of
the budget period), the options chosen for the disposition of the
funds, etc.  Nevertheless, these examples  should be helpful.

EXAMPLE A — Continuing Environmental Program, Unexpired
       '•      Appropriation

     EPA awarded a $1,000,000 grant to a State for a continuing
environmental program.  The one-year grant budget period covered
the grantee's fiscal year.  The award was  recorded as an EPA
obligation in EPA's Financial Management System  (FHS).

     The award was made from a regional allowance for Fiscal Year
1987, and the obligation for that award was recorded against
the 1987 account number for that program and  region.  (The allow-
ance was derived from the Agency's 87/88 Abatement, Compliance
and Control  (AC4C) appropriation.)

     The State made its own obligations against  the EPA award
during  the budget period.  As the State needed funds to pay pro-
gram costs,  it drew down  funds from EPA through  its letter of
credit  and contributed  its own required cost  share.

     Shortly after the  end of the fiscal year, the recipient
submitted a  Financial Status Report  (FSR)  that shows an unobli-
gated  balance of 150,000  in Federal  funds  after  paying all their
allowable costs  for the budget period.  The FSR  thus established
at $950,000  EPA's  share under the grant agreement for the State's
costs  for that year.  To  accurately  account for  this assistance
award,  the  Region  prepared a 5700-20B  showing the reduction, and
provided a  copy  (along  with  a copy of  the  FSR) to their financial
management  office  (FMO).  The FMO recorded the downward adjustment
using  Transaction  Code  050.2, and the  accounting data for those
 funds.

      Based  on earlier discussions with the State, the Region had
 agreed to make the $50,000  available as  additional funding in the
 then-current budget  period.  Before  the  appropriation expired, an
 amendment increased  the current  year funding.

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     The amendment was provided to the FMO with  the documents
effecting the decrease-  The FMO recorded the  increase ag-ainst
the current year obligation document number using Transaction
Code 059.1, and the accounting data for these  funds.
EXAMPLE B — Continuing Environmental Program, Expired
Appropri at i on

     In the previous example, all the necessary actions to sake
these funds available in the subsequent budget period, including
execution of the amendment, occurred before the appropriation
expired.  Assume in Example B that there were delays in the
submission of the FSR.                                    •    ,

     The. Region had intended 'to take the balances remaining  from
the prior budget period and substitute them for current year
funds awarded for the grantee's ongoing budget period.  The cur-
rent year funds would have then been available to the 'Region.
However, the FSR was r.^t received until after the source appro-
priation had expired.  Because the appropriation had expired,
the recipient's $50,000 in unobligated balances were no longer .•  •,
available to the Agency, the Region or the recipient.

     To ensure proper accounting for the Agency's funds, the
award official was responsible for executing an assistance amend-
ment to document the decrease in the Agency's estimated liability
(i.e., obligation) for the assistance agreement.  The amendment-
and FSR were provided to the FMO, who recorded the decrease, whic
is reflected in FMS, as a recovery to the expired appropriation.
EXAMPLE C — Project Agreement, Availability of Funds in the
Second and Later Budget Periods

     The Headquarters Grants Operations Branch awarded a. research
cooperative agreement to a University tet-support investigation of
the environmental fate of certain pesticides.  At the end of the
project, the recipient was required to provide a detailed final
report of the project and findings.

     For effective oversight and administration, the project
period was divided into three budget periods.  At the end of each
budget period, and at other times during the project, the Univer-
sity researchers would submit progress reports to EPA.  These
reports merely provided information which was not independent or
separate from the final project outcome, product or report.

     Using an unexpired RfcD appropriation as its source of funding,
EPA made the initial award (budget period "01") for the project
late in Fiscal Year 1986 (see Figure 1 on next page).  The project

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 proceeded satisfactorily during budget period "01," and the
 University subaitted a continuation application for budget period
 "02." EPA provided incremental funding for this project through a
 continuation award (budget period "02") Bade late in Fiscal Year
 1987.  A third, and final, budget period vat approved in Fiscal
 Year 1988 to conclude the project.
                       Figure 1 — Exauple B
      FY 1986    :FY 1987    FY 1988    FY 1989    FY 1990
   T   :       \           i           i           i           r
                        i
i
1 *
              B.P.  "01*  B.P.  ^02
      During early fiscal year 1988,  the University subaitted its
 final FSR for budget period "01."  The FSR reported that $10,000
 of the original award was unused, and requested that these funds
 be »ade available in budget period "02" for continued work on the
 project.  Upon approve! froa the Office of Research and Develop-
 ment, the award official executed an aaendaent to Bake these
 funds available in addition to the previously awarded amounts for
 budget period "02.*  As costs were incurred and drawdowns Bade
 during Fiscal Year 1988, the drawdowns were charged off first to
 the funds awarded for budget period "01."

      The recipient's unobligated balances for budget period "02"
 were reported in budget period "03," during our Fiscal Year 1989.
 Again, the balances were Bade available, but in this instance
 no additional funding was required to coaplete the project.  Thus,
 Fiscal Year 1988 funding awarded for budget period "03" was re-
 placed by the funds Bade available froa budget period "02."
 The source appropriation for these "displaced* funds was the two-
 year Rfcb appropriation available for obligation in Fiscal Years
 1988 and 1989, and therefore these funds becaae available for
 the Budget Division to recover and reissue.

      The F8X for budget period "03"  contained unobligated balances
'as well, but since the project was now over, the balances were
 treated as recoveries to the appropriation.

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         APPENDIX M
USE OF DISADVANTAGED BUSINESS
      ENTERPRISES (DBE)

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C, 20400

                           JAN  15.1992
                                                    THE
MEMQRAKPtM

SUBJECT:  The 8% Plan for the Utilization of Disadvantage Business
           Enterprises in Procurement Under/ Assistance Programs

FROM:      F. Henry Habicht I
           deputy Adninistra '

TO:        Assistant Administrators
           General Counsel
           Inspector General
           Associate Administrators
           Regional Administrators
           Staff  Office Directors
           Laboratory Directors

  .   On February 15, 1991, the  Agency issued guidance entitled "FY-
91 Program for Utilization of Disadvantaged Business Enterprises in
Procurement Under  Assistance Programs",  That guidance implemented
the 1991 Appropriations Act, P.L. 101-507, which authorized EPA to
establish  a minimum 8% goal for the  use  of  disadvantaged business
enterprises in all procurements under its assistance programs.

     In the Conference Report to EPA'a FY-92 Appropriation Act, the
conferees reaffirmed their support for this program.  Based on P.L.
101-507 and the  Conference Report, EPA will continue to establish
an 8% goal each fiscal year. Accordingly, the plan, as cited in my
February IS, 1991  memorandum,  remains in full  force and effect.

     I am  positive that  each  of you will join me in making  this
commitment work.  •

     Should you have questions regarding the technical application
of  this  plan,  the  Office of  Small  and Disadvantaged  Business
Utilization stands ready  to offer any assistance deemed necessary.
All requests for information on this program should be directed to
John K. F.opes,  Director, Office of Small and Disadvantaged Business
Utilization, or  George K. Mori,  Senior Program Officer.   John can
be reached at  FTS  365-7777 and George on  365-6301.
                                                          PIMM! m Httydid ftp*
                                                  cciCt aec.vs4.tsta

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460
                               FEB I  5 1991
                                                            OFFICE OF
                                                         THEAOMNSTMTOR
MEMORANDUM              '

SUBJECT:  FY-91 Program for Utilization of Disadvantaged Business Enterprises
          in Procurement Under Assistance Programs
FROM:     F. Henry Habicht, II
          Deputy Administrator .   _,
                                 W                     •     .
TO:       Assistant Administrators
          General Counsel  .
          Inspector General
          Associate Administrators
          Regional Administrators
          Staff Office Directors
          Laboratory Directors

     On November 5, 1990, President Bush signed into lav, the 1991
Appropriations Act, P.L. 101-507, which includes the appropriations for
the Environmental Protection Agency.

     The Administrative Provisions of this Act contains the following
language:

          "The Administrator of the Environmental Protection Agency
     shall, to the fullest extent possible, ensure that at least 8 per
     centum of Federal funding for prime and subcontracts awarded in
     support of authorized programs, including grants, loans and contracts
     for wastewater treatment and leaking underground storage tanks grants,
     be made available to business concern* or other organizations owned
     or controlled by socially and economically disadvantaged Individuals
     (within the meaning of Section 8(a)(5) and (6) of the Small Business
     Act (15 U.S.C. 637(a)(5) and (6)), including historically black
     colleges and universities.  For purpose of this section, economically
     and socially disadvantaged individuals shall be deemed to include
     women.**"

     As a result of the above, EPA Is required to establish a minimum eight
percent goal on all procurements emanating from any grant, cooperative
agreement or loan awarded during FY-91.  This will, of course, also
include tay new procurement unisr FY-91 grant amendments which involve
the use of additional Agency  funds.
                                                                     a* RtcycUd Fap*r

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                                  - 2 -
     The enactment of thli section will.also require grant or cooperative
agreement recipients who, In the past, have not been required to establish  ,
a "fair share" objective or to report on their procurement activities,
to nov conduct both.  An example of such activity will include those
recipients who heretofore cane under the authority of OMB Circular A-UO.
These recipients were primarily universities and colleges, non-profit
organizations and hospitals.  As stated, these entities were required to
negotiate a "fair share" objective and  to use positive efforts to assist
disadvantaged. (minority and women) businesses.  However, such recipients    :
were not required to report on their activities concerning these business
elements.  With  the  passage of P.L. 101-507, these recipients are now
required to  report on an annual  basis.  Additional information is covered
in the  attachment on how a  recipient may operate  in  order  to meet the 8
percent requirements.

      Congress has also  directed  that  the  Administrator shall  repor*  upon
conclusion of the fiscal year,  the Agency's efforts  in achieving the minimum
 8 percent  level.
      A review of all program activities should be undertaken to determine the
 extent in which the 8 percent goal for disadvantaged businesses may impact
 your programs.  A special attachment has been prepared to assist you in
 assuring that you have considered all aspects on the Impact of this
 section of current  law on EPA's procurement under assistance programs.  .:,, :
 All of the requirements cited la the attachment are effective as of        ,--'
 October 1. 1990.                                    ".    V%
                                                                             L_

      X am positive  that each of you will join me in making a firm commitment
  to enhance the  utilization of dlsadvantaged businesses, including the Histori-
  cally  Black  Colleges and Universities  in all Agency programs.  Working together
  we can achieve  a more  equitable distribution of  Federal dollars to  the benefit
  of the underutilized segment of our Nation's economy.
                                                                            (*-

      The  Office of  Small and Disadvantaged Business Utilization  (OSOBU)    '
  is prepared  to  offer technical  assistance  to  individuals  who  are assigned
  responsibility  in  these areas.   All  requests  for Information  on this       '}
  program should  be  directed to  John M. Ropes,  Director, OSDBU,  or George   '% s
  Mori,  Senior Program Officer.   John can be reached  at FTS 557-7777 and    £• %
  George on FTS 557-9301.
  Attachment

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                    U.S. ENVIRONMENTAL PROTECTION AGENCY

               Disadvantaged Business Enterprise Program Plan

                       Financial Assistance Programs
 I.  BACKGROUND.     -                             •  '  .

      Under the.authority of Executive Orders 11625, 12432 and 12138,  the
 Agency established annual objectives for minority and women-owned businesses.
 These objectives are accomplished by mandating that the recipient and the
 prime contractor carry out six affirmative steps if any subcontracting was
 to be performed.

     •The Executive Orders also provided the authority for the Agency  to require
 quarterly reporting from the States and local governments to inform the Agency
 how well they were doing in meeting their "Fair Share" objectives.

      Prior to Fiscal Year 1991, the Environmental Protection Agency's (EPA's)
 "Tair Share" policy r"r utilization of small, minority and women-owned   «i-
 nesses applied to State and local governments only and did not affect univer-
 sities,  colleges, hospitals and other non-profit institutions which came under
 the purview of OMB Circular A-110.  Under that Circular institutions  of higher
 education and other non-profit organizations had only to exert "positive efforts"
 in their attempts to utilize small and minority businesses.  'Iditionally, all
 of the non-profit institutions and universities were exempt from .any  reporting
 requirements.

 II.  GENERAL INFORMATION.                 •      .      .

      A.   This Plan sets forth the manner in which EPA proposes to implement
 the requirements of the Administrative Provisions pertaining to the 8 percent
 objective for Disadvantaged Business Enterprises,  (DBEs), required by Public
 Law 101-507.

     . B.   The Office of Small and Disadvantaged Business  Utilization (OSDBU), is
 responsible for developing policy and providing procedural guidance for the
.utilization of disadvantaged businesses under the Agency's financial  assistance
 programs.

 III.   SPECIFIC INFORMATION.

      In EPA's FY-1991 Appropriations Act, Congress requires EPA to ensure, to
 the fullest extent possible, that at least 8 percent of  Federal funding for
 prime  and -subcontracts awarded in support of authorized  EPA programs  for FY-9L
 go to  businesses or other organizations owned or controlled by socially and
 economically disadvantaged Individuals (see VII. "definition").  Accordingly,
 any grant, cooperative agreement or loan awarded by EPA in FY-91 must stipulate
 that  a minimus objective of 81 of such funding be directed to DBEs.

      To  the extent that the requirements of OMB Circulars A-102 and A-110 as they.
 pertain to the utilization of minority and women-owned businesses conflict with
 the FY-91 Appropriations Act language, the Circular provisions are superseded.
 State  government agencies receiving EPA funding will be  required to establish  a
 minimum 8Z "Fair Share" objective for disadvantaged business utilization in'
 contracting for goods and services in their grants, cooperative agreements and

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loans, including State Revolving Fund (SRF) loans.  Likewise, institutions
of higher education, hospitals and other non-profit organizations receiving
grants, cooperative agreements or loans, including those for research and
development (other than research awards under the Clean Air Act) will be subjec
to the same requirement; "positive"efforts" (as required in OMB Circular A-110)
for the utilization of small businesses and minority businesses are not suf-
ficient to meet the requirement of P.L. 101*507.

     The Appropriations Act specifically includes Historically Black Colleges
and Universities (HBCUs) as part of the definition of DBEs.  Therefore, EPA
will require that aU recipients, including institutions of higher education,
include HBCUs, in their definition of DBEs.

     The following is taken verbatim from P.L. 101-507 signed by the President
on November 5, 1990..  The Administrative Provisions contains the following
language:

          "The Administrator of the Environmental Protection Agency
     shall, to the fullest extent possible, ensure that at least 8
     percentum of Federal .funding for prime and subcontracts awarded             :.
     in support of authorized program:,, including grants, loans, and     *        .  ,,
     contracts for wastevater treatment and leaking underground stor-         • .  :,• *,
     age tanks grants, be made available to business concerns or other       *-   *
     organizations owned or controlled by socially and economically        :   % '
     disadvantaged individuals (within the meaning of Section 8(a) (5) .-,..
     and (6) of the Small Business Act (IS U.S.C 637(a) (5) and (6),  :.-p '   |
     including historically black colleges and universities.               i "
     For purposes of this section, economically and socially disad-    <   :
     vantaged individuals shall be deemed to include women..."  '  :  .     *
                                                                     "**•-;.  "£
     Therefore, it is imperative that all EPA program managers understand"
that the requirements for utilization of disadvantaged businesses in the £
award of prime and subcontracts have changed considerably.            » ,,'•

IV.  AUTHORITY.                                                -       - -v:

     The Administrative Provisions of the EPA's FY-91 Appropriations Act;
P.L. 101-507, is the Agency's statutory authority for its "Fair Share" policy
in FY-1991.

V.  POLICY.

     It is EPA policy that recipients of EPA financial assistance awards utilize
the services of DBEs to the maximum extent practicable.  P.L. 101-507 establishes
a minimum objective of 82 of total contract and subcontract awards.  It is EPA's
policy that such business entities be afforded the maximum practicable opportunity
to participate as contractors, subcontractors, suppliers and otherwise in EPA
awarded financial assistance programs.  This policy applies to all contracts and
subcontracts for s'upplies, construction, equipment and services under EPA grants,
cooperative agreements or loans awarded in FY-91.  For the SRF program, the  policy
applies to funds orovided to States in Capitalization grant awards in FY-91.      .
Recipient's small purchases are also subject to this policy.

VI.  OBJECTIVE.

     The objective  of the Disadvantaged Business Enterprise Program Plan is  to

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                                   - 3 -

 encourage  recipients  and  their prime contractors  to seek out  DBEs  as  subcon-
 tractors  to the maximum, extent possible.

 VII.   DEFINITIONS.

      The  following  definitions are used in this Plan.   The definitions as
 cited herein are for  use  of  grant-making  personnel  and  small  and disad-
 vantaged  business utilization  officers  to assure  consistency.

      A.   Dtsadvantaged  Business  Enterprise (QBE).   DBE  is a business  concern
 which meets the criteria  of  Sections 8(a) (5). and (6) of the  Small Business
 Act  (15 U.S.C.  637(a) (5) and  (6)).   Sections 8(a)  (5)  and (6) are cited below:

          1.   Socially disadvantaged  individuals are  those who have been
 subjected  to racial or  ethnic  prejudice or cultural  bias because of their
 identity as  a member of a group  without regard to their individual qualities.
 (Section 8(a> (5)).

         2.   Economically disadvantaged Individuals  are those socially disad-
 vantaged individuals whose ability tc compste in the free enterprise  system has
 been  impaired due to diminished  capital and credit opportunities, as  compared
 to others  in the same business area  who are not socially disadvantaged.  In
 determining  the degree  of diminished credit and capital opportunities, the
 Small  Business  Administration  shall  consider, but not be limited, to  the assets
 and net worth of such socially disadvantaged individuals.  In determining the
 economic disadvantage of an  Indian tribe,  the Small  Business Administration
 shall  consider, where available, information such as the following:  The per
 capita income of members of  the  tribe excluding judgement awards, the percental
 of local Indian population below the poverty level,  and the tribe's access to
 capital markets.  (Section 8(a)  (6)).

     For purposes of this definition, individuals who are socially
 disadvantaged shall include  the  following:                .

              a.  Black Americans.

              b.  Hispanic Americans.

             c.  Native Americans.

           .' d.  Indian Tribes.

             . e.  Asian Pacific Americans.

              f.  Native Hawaiian Organizations.

             g.  Women.

             h.  Historically Black  Colleges and Universities.

     B.  Historically Black  Colleges and  Universities (HBCUa).  The BBCUs
 are identified  by the Department of  Education Listing of Minority Colleges
and Universities.  The authority vested in  the Department of Education by
 law and Executive Order 12320 dated  September 15, 1981, is included as
Attachment No.  1.  For purposes  of the above cited documentation the Depart-
ment of Education recognizes HBCUs as any institution established prior co

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                                  - 4 -
1964.  A copy of the listing of predominantly minority institutions,
including HBCUs is included as Attachment No. 2.           •      '",.'.-

     C.  Plan.  EPA's proposed program of action for the utilization of DBEs
in financial assistance programs.  The Plan will contain, as a minimum,
methods' for encouraging grant recipients and their prime contractors to
utilize DBEs.                              •

     D.  Financial Assistance.  The term financial assistance is synonymous
with "grant-making" in the Act, and is meant to include any Federal support
whenever the principal purpose of the relationship is the transfer of money,
property, services, or anything .of value to a State or local" Government, or
other recipient, in order to accomplish a public purpose of support or
stimulation authorized by Federal Statute.

     E.  Goal.  The use of the term goal or goaling is to be used synonymously
with "Fair Share" objective.  A recipient's minimum objective will not be less
than 8Z of all extramural.funds contained in the award document.  Recipients
must establish a separate "Fair Share" objective for both minority business
enterprises (MBEs) and women-owned businesses (WBEs).  HBCUs will be included
in the MBE objective.

VIII.  THE DISADVANTAGED BUSINESS ENTERPRISE PLAN FOR FINANCIAL ASSISTANCE
PROGRAMS.                                                          '

     A>  The Plan.  EPA's plan is to require that :each financial, assistance .. ,•
agreement awarded by EPA in FX-91 contain a requirement for a minimum goal of
82 for DBEs.  In order to accomplish this goal, States will have to look more,
closely at their overall spending with respect co extramural funds and to
greater emphasis on .projects where the chances to .exceed the minimum can be
pected.  This will allow the recipient to lower their goal on projects having
few or no qualified DBEs available to perform the work; conversely, it will re-
quire higher goals being established in areas having substantial qualified DBEs
Recipients below the State level must use their resources wisely in order to
meet the minimus 81 goal for DBEs.
     B<  Implementation.  With the passage of P.L.
implementation activities are now required:
101-507,  the following
         I.  Program.  Each program will need to immediately examine
its FT-91 plans for extramural expenditures to identify areas, projects and
activities that will need to direct their efforts toward complying with the'
above statutory requirements.  Each grant, cooperative agreement or loan awarded
in FY-91 will contain a special coi.dition establishing a minimum goal of 82 for
the utilization of DBEs, including HBCUs, in the award of prime and subcontracts'
However, in the. SRF program, State selected equivalency loans resulting from a
Capitalization grant awarded in FY-91 are used to comply with the overall negoti-
ated "Fair Share".!amount for that grant. The SRF program also is discussed sep-
arately below.

             Programs which primarily place work vith institutions of higher
education can achieve their 8Z goal by utilizing HBCUs either on a direct
basis, as part of a consortium or as a subcontractor.  If an HBCU receives an
award as a recipient or as part of a consortium, a negotiated "Fair Share"
objective must be established by the HBCU or the consortium.

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..-.*.                      - 9 -     .            ' . .•


              f.   requiring the contractor to take the affirmative steps in
 subparagraphs a.  through e. of this part if subcontracts are awarded.

          9.   SRF  equivalency loans are subject to EPA's "Fair Share" objective,
 which is  a minimum of 8Z, and oust comply with the requirements of paragraph B.7?
 above.  SRF  equivalency loans are those identified as such by the State and which
 equal the total amount of the Capitalization grant.   States  should not count re-
 financing projects toward meeting their "Fair Share" objective except in unusual
 cases.  In such cases, prior approval must be obtained from  OSDBU and the Head-
 quarters  program  office.  If a State accomplishes its "Fair  Share" objective by
 requiring only certain equivalency projects to undertake the six affirmative steps,
 other SRF equivalency'projects are not required to undertake them.  A State may,
 however-,  -require  such other SRF equivalency projects to do so.  That is the
 State's prerogative and not EPA's.

         10.   All  actions taken in carrying out the affirmative steps [see 40 CFR
 §33.240,  §3l.36(e), §35.6580(a) and §35.3145
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             The recipient must ensure to the fullest extent possible that at
             least the negotiated "Fair Share" percentage of Federal funds for
             prime contracts or subcontracts for supplies, construction, equipment
             or services are made available to organizations owned or controlled
             by socially and economically dlsadvantaged individuals, women, and
             historically black colleges and universities."

             The recipient agrees to Include in its bid documents a (insert the
             negotiated "Fair Share" percentages) and require all of its prime
             contractors to include in their bid documents for subcontracts a
             (insert the negotiated "Fair Share" percentages) "Fair Share" per-
             centage.

             To evaluate compliance with the "Fair Share" policy, the recipient
             also agrees to comply with the six affirmative steps stated in 60
             CFR §33.240, §31.36(e) or §35.65BO(a), as appropriate."

             c.  If the Award Official or his desigttee HAS NEGOTIATED a "Fair Share"
with the recipient for Capitalization grants use the following condition, or
equivalent.  "Fair Share" for these grants must be at least 81;

             "The recipient, must ensure  j the fullest extent possible that at
             least (Insert the negotiated "Fair Share" percentagea) of equivalency
             funds for prime contracts or subcontracts for supplies, construction,
             equipment or services are made available by the State and/or SET
             assistance recipient to organizations owned or controlled by socially
             and economically disadvantaged individuals, women and historically
             black colleges and universities."

             The recipient agrees to select certain equivalency projects to achiev
             to the fullest extent possible, the State's "Fair Share" objective and
             to require those selected equivalency projects to comply with the six
             affirmative steps.  The recipient agrees to require (and to assure
             that the selected assistance recipients also require) that all prime
             contractors include in their bid documents for subcontracts the (insert
             the negotiated "Fair Share" percentage) "Fair Share" percentage.

             d.  If the Award Official or his deslgnee HAS NOT NEGOTIATED a "Fair
Share" with  the recipient for Capitalization grants use the following condition or
equivalent.  The "Fair Share" for these grants gust be at least 81;

             "The recipient agrees  to negotiate a  "Fair Share" percentage of not
             less than 8Z with EPA  before the recipient begins the process to
             award any contracts under  this agreement.

            * The recipient must ensure  to the  fullest extent  possible that at  least
             (Insert  the negotiated "Fair Share" percentages) of equivalency  funds
             for prime contracts or subcontracts for  supplies, construction,  equip-
           •  ment or  services are made  available by  the  State and/or SKF assistance
             recipient to organizations  owned  or controlled  by socially and economi-
             cally diaadvantaged  individuals,  women  and  historically black colle?»s
             and  universities.                                                     *

           -  The  recipient  agrees  to  select  certain  equivalency  projects to  achieve
             to the  fullest  extent  possible,  the State's "Fair Share" objective an'4
             to require  those selected  equivalency projects to comply with the si:

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     "                .            - 8 -


             affirmative seeps.  The recipient agrees  to require  (and to assure
             that the selected assistance recipients also require) that all o^fc-"'
             contractors include in their bid documents for subcontracts the i^V
             (insert the negotiated "Fair Share" percentage) "Fair Share" percentage

         5.  Reporting Conditions.  The above stated conditions (a.- d.)
must also include the following statement with the appropriate reporting require-
ments, i.e., a., b., c> or d.:

             a.  For Project Grant Recipients (exceptInstitutions of Higher
Education and Other Non-Profits) and Loan Recipients:

                 "The State and/or recipient agrees to submit a SF-334 "MBE/VBE
             Utilization Under Federal Grants, Cooperative Agreements, and other
             Federal Financial Assistance", to the EPA award official beginning
             vith the Federal fiscal year quarter the recipient awards its first
             contract and continuing until all contracts and subcontracts have
             been reported.  These reports must be submitted to the award official
             within 30 days of the end of the Federal  fiscal quarter (January 30,
             April 30, July 30 and October 30)."

             b.  For Continuing Environmental Program  Grants;

                 "The State and/or recipient agrees to submit a SF-334 "HBE/WBE
             Utilization Under Federal Grants, Cooperative Agreements,' and other
             Federal Financial Assistance", to the EPA award official .within 30
             days of the end of each Federal fiscal year, i.e., by October 30th
             of each year."
            *                                                "           .
             c.  For Grants to Institutions of Higher Education and Non-Profits":

                 "The State and/or recipient agrees to. submit a SF-334 "MBE/VBE
             Utilization Under Federal Grants, Cooperative Agreements, and other/
             Federal Financial Assistance", to the EPA award official within 30
             days of the end of each Federal 'Iscal year, I.e., by October 30th
             of each year.

     D.  Responsibilities.

         1.  The OSDBU will provide copies of the approved Plan to all Program
and Regional offices associated with financial assistance programs.

         2.  Award Official or their deslgnee vill negotiate a "Fair Share" objec-
tive for each program.  The negotiated "Fair Share" objective vill include separate
objectives 'for MBEs, (including HBCUs), and WBEs.  Negotiated objectives should be.
developed on the-basis that the minimum can be no less than 82; however, those
States and recipients who have negotiated a higher percentage In  the past should
be strongly encouraged to maintain the higher level.   Percentage  ranges e.g., 4-9
percent or 6-8 percent etc., are not authorized.

         3.  The (SDBUO) must provide the Grants Management Offices (CMOs) with    :
the negotiated "Fair Share" objective for each State or other recipient at the
earliest practicable date, but in no event later than  August 31st of each fiscal
year for the following year.  In addition, the SDBUO will be responsible for
the following actions:

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                         a.  Ensure  chat  the State or  recipient  la  fully cognizant of the
            requirements of this Plan and the necessity  for compliance.

                         b.  Follow-up with recipients if they do not submit the MBE/WBE Report •.
                     4.  The GMOs.   CMOS will:

                         a.  Include the appropriate condition in this policy (VIII.C.)

                         b.  Assuring the timely receipt of quarterly and/or annual reports
            as required by the Conditions.  Reports are  due within  30 days after the close
            of each Federal fiscal quarter or fiscal year, as the the casr may be.

                     5.  Reporting.  Reporting will be carried out  by any entity receiving
            EPA funds.  Universities, Hospitals and other Non-Profit Institutions, which were
            formerly not required to report are now required to report in order for the Agency
            to determine if it has net the 8Z goal-for each EPA-funded program.  No waivers
            will be approved for reporting requirements.  Quarterly or annual reporting will be
            conducted by using the Standard Form 334.

                     6.  The Clean Air Act Research Grants.  The 8 percent goal for the utili-
            zation of DBEs in F°A-funded procurement under assistance programs applies to
            all programs, except for ..search awards funded under the Clean Air Act.  The Clean
            Air Act Amendments requires a 10Z goal for research programs awarded by EPA for
            DBEs.  This requirement will be addressed under separate cover.
            2 Attachments
o

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           APPENDIX N
   POLICY ON THE TIMELY AWARD OF
    ASSISTANCE AGREEMENTS FOR
CONTINUING ENVIRONMENTAL PROGRAMS

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                          SEP f 4 JS92
HSMORAimrTV



SUBJECT
            Policy on the Timely Award of Assistance Funds
            for Continuing Environmental  Programs
             CrigineJ signed by Harvey Plpp«a, ft,
  FROM:     Harvey G. Pippen Jr., Director
            Grants Administration Division
                  •        /

  TO:        Assistant Regional Administrators
            Regions i-X


       Attached is a policy entitled  "Timely Award  of Assistance
  Funds for Continuing  Environmental Programs."    This  policy is
  issued  in conjunction  with  a  memorandum dated June 26, 1992, from
  the Office of Comptroller which clarifies general Agency policy on
  when  funds are available for  award.


       If  you  have  any  questions  concerning  this matter,  please
  contact Bruce Feldman at 202  260-5268.

 Attachment


 cc:  Howard Corcoran, OGC,  (LE-132G)
      Becky Fredericks,  HQ, Budget Division  (PM-225)
      Kathy Payne, HQ/OW  (WH-556)

      Jerry Kurtzweg, HQ - Office of Air & Radiation  (ANR-443)
      Dick White,  HQ - Pesticides & Toxic Substances  (TS-788)
      Judy Kertcher,  HQ  - Hazardous Waste (OS-110)
      Doug Barrett,  HQ - OC/FMD (PM-226F)
      Jane Ephrimedes, HQ - OW (WH-546)
      Carol. Crow,  HQ  - OW (WH-546)
     Robbie Savage,  ASWZPCA
     Marian Cody, HQ,  (PM-216F)
     Corinne Allison, HQ,  (PM-216F)


bcc: Official        R. Johnson    B. Feldman
     Reading         Grants Management Offices  -  Regions  I-X
     Division        GPPB  Staff    GAD Branch  Chiefs
PM-216F:RJohnson:RAJ:260-5296:FC 801:Disk - RJ:MEMO2.FKL

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                            TIMELY AWARD OP ASSISTANCE FUNDS
                         FOR  CONTINUING  ENVIRONMENTAL PROGRAMS
           PART I:

           PART II:

           PART III!

           PART IV!

           PART V:
PURPOSE

POLICY

BACKGROUND

ROLES AND RESPONSIBILITIES

Appendices
o

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I.   PURPOSE
     The  purpose  of this  policy is  to clarify  existing policy
concerning  the  timeliness  of  awarding  assistance  funds  for
Continuing  Environmental  Programs.    Continuing  environmental
programs  are  generally those programs  cited in 40 CFR  Part 35,
Subpart A.  See Appendix 3  for a  listing, as  of September 1992, of
Continuing Environmental Program grants.
II.  POLICY

     It is EPA's.policy  to award assistance funds for Continuing
Environmental Programs as  quickly as possible after funds become
available,  in accordance  with  40  CFR  35.141,  "EPA Action  on
Application".  The procedures in this policy apply to awards made
under a  normal or a  late Appropriation Act  as well as  under a
Continuing Resolution(s).

III. BACKGROUND

     During the past year, some States have rai-ad concerns about
the timing of assistance awards which fund continuing environmental
programs.  Frequently EPA does not award  its environmental program
grants until after the start of the grant budget year.  There are
a number  of  causes for the delays.  Two  examples  often cited are
confusion  about  when funds  become available  for  obligation and
difficulties in work plan approvals.  Due to the confusion on the
availability of  funds and  the degree of flexibility the Regions'
have to plan and to award grants within their quarterly Operating
Plan, the Regions frequently delay awarding grants.  Additionally,
work plan negotiations between State and  EPA program officials are
often not  completed  in  a timely manner due to disagreements over
State and EPA initiatives and requirements. Such disagreements can
hold up a grant award until all work plan issues are resolved and
the work plan is approved.              .

     Most  States,  by  law,  cannot operate, their  programs  in a
deficit mode.  With  a  tightening economy,  States face laying off
workers or changing  to shorter work weeks  if Federal funding is
delayed for Continuing Environmental Programs.  Additionally, due
to the Cash Management Improvement Act, the Agency could be liable
for interest penalties when grants are awarded late.

     To help  clarify EPA policies and the concepts governing the
use and  availability of funds,  Budget  Director,  Richard Brozen,
issued a  policy  .memorandum dated June 26, 1992, to  the ARAs and
Senior Budget Officers.  See Appendix 1.

Funding Availability and Flexibility

   o Under an Annual Appropriation

     The   Office   of   Management  and  Budget  has  historically
apportioned funds for the AC&C account in a quarterly split of 80-

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10-5-5 percent of total (i.e. 80 percent of the funds are available
in the  first quarter;  10 percent  are available  for  the second
quarter; and five percent each are available for the remaining two
quarters  of  the  fiscal  year).   The  apportionment  reflects the
quarterly split for the entire appropriation.  During Phase III of
the President's Budget, this quarterly split is equally applied to
every program element in the appropriation.  Regional Offices may
adjust the amount awarded under each program element provided the
total awards do not exceed their quarterly  split.

     By adjusting the Regional resources during Phase III, Regional
Comptroller Offices, working with the Regional Grant Management and
Program Offices  can,  to the maximum  extent possible,  fully fund
their continuing environmental program grants in the first quarter
while funding project grants, contracts, or lAGs later in the year.
Thus, the decision rests with the  Region to determine which awards
to make using the Region's first quarter allowance of AC&C funds.
(The  assumption is  that sufficient  resources are  available  to
permit  the Region  to fund  100  percent  of fundable continuing
environmental grants.)


   o Under a Continuing Resolution

     Under  a Continuing  Resolution (CR),  all affected agencies
receive limited funds based on constraints written by Congress and
OMB applicable for the time period  covered  by  the CR.

     During the CR, funds are available to  the regions based on a
percentage of their total appropriation and they are not restricted
by program element  or  object class totals.  Regional offices may
adjust the amounts funded under each program element provided the
Region  does not  exceed  its  total  available  allowance.   Thus,
depending on its priorities and the amount of funds available, the
Region may fully fund  its continuing environmental program grants
even under a CR.
PART IV. GXO ROLES AND RESPONSIBILITIES

     This Section outlines the basic roles and responsibilities of
the Grants Management Office (GMO) in awarding assistance funds for
continuing environmental programs.

     FUNDING AVAILABILITY

     1.   GMOs  must  coordinate with the  Regional Comptroller to
          ensure  inclusion on distribution  lists of information
          received  from the Office of  Comptroller  relating  to,
          assistance funds.  This information includes the Regional'
          Operating   Plan   (and  any  revisions)  and  all  other
          pertinent grant  correspondence and policy issued by the
          Office of Comptroller.

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2.   GMOs must  work  jointly  with program  offices  and  the
     Regional  Comptroller  to   adjust   individual  Program
     Elements within the quarterly allowance to allow to the
     maximum  extent  practicable  100  percent  funding  of
     acceptable    grant    applications    for    continuing
     environmental programs.

3.   GMOs and the Program Offices should jointly ensure grants
     awards are made as soon as possible after the funds are
     available to the Regional offices.

     Conditional Approval.  If an application is conditionally
     acceptable, and only minor revisions to the workplan are
     required, the award should  be made  as  soon as possible
     after'Federal funds become available,  either partially
     or  at  100  percent.     The  award  must  include  the
     condition(s)  which the applicant must meet  -to secure
     final approval  and the date by  which  those conditions
     must be met.
     Disapproval.    If  the application  cannot  be  either
     approved or conditionally approved, and negotiations to
     revise the  work plan  fail,  the  GMO working  with the
     program   office  should   provide  a   formal   written
     notification to the  recipient  which  states the reasons
     for disapproval of  the Application,  in accordance with
     40 CFR 35.141(C).
KEY MILESTONES IN THE AWARDS PROCESS

I.   GMOS should coordinate with  the program offices in the
     forwarding of application kits  and program guidance to
     continuing program grants applicants.  GMOs should send
     application kits to continuing program grants applicants
     three and one half (3 1/2) months before the end of the
     current grant budget period.

2.   GMOs should  jointly work with  the program  offices to
     provide  a formal  written  notification to  applicants
     regarding  the  status of award  of  their  continuing
     environmental applications within 45 days after receipt
     of  the .application.   This  notification  must  include
     whether  the  application  is  acceptable,  conditionally
     acceptable, or unacceptable and inform the applicant of
     any outstanding administrative issues which would delay
     award.   (See Appendix 2 for a sample status report.)

3.   GMOs should make their final  determination on whether an
     application  is  approved,  conditionally  approved,  or
     disapproved within 60 days of receipt of the application.

4.   GMOs and the program offices should jointly ensure that

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'•
•-V

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                                                                    Appendix  1
it*  \
                    UNITED STATES FNVIRONMENTAL PROTECTION AGENCY
                                 WASHINGTON, D.C.  204M
                                 JUN281992
                                                                         armor
                                                                        M
                                                                       ANOI
 frfEMQRANPTJM

 SUBJECT:

 FROM:
TO:
                             (FM-225)
              Assistant Regional Administrators
              S«aior Budget Officen
        This memo ii intended to clarify some of the geaeal polices and concepti that
 govern funds availability and flexibility in the Agency when a fiscal year begins.  The
 "financial environment" has been rapidly changing over the-last few yon horn
 EPA as well as goyemment-wide.  These changes have 'nised y^**"? M to
 fundamental con rpsponsihtlhins of the Agency'f i
 These imnn an extremely ffwplw a*y| highly variable.
 the intef-mlitionihip  of four cora ftrndtog document.  TUi neno piovidM «D ovirvlew .
 of the ^H^'TP"**^ core rrgtoniffrflitifit   Th* Budget Ptviiioo b l*ifr'*>iiflf in the.
 of updating the Planning and Budget Manual and dp* Funds Control Manual which wffl
 incorporate the more detailed guidance.  As put of this process, I would welcome
 comments and suggestions for additional  clarifications, as needed.

 Background

        Several recent events have focused our sHiiHiuH on bow the division is
 communicating  resource decisions and providing  information fonrarntng the nbtae of
 fuodi to the Agency. First, many new and complex tews have been enacted  that afoot
 the Agency's funds. These include the Budget  Enforcement  Act of 1990,'
 Financial Officer Act of 1990, Federal  Credit Reform Act of 1990 and me
 Management  Improvement Act of 1990.  Second, we have
  Financial Manafeoeni  Syttem (IPMS) within the la* few yean
  significant impact on the flow of information concerning financial
  new responsibilities  for the Responsible  Planning and Implementation Offleen (HHDi).

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   Third, a quality  action team  was convened  by the Office of Wastewtter Enforcement
  jAd Compliance for tbe purpose of addressing State concerns on the gnats proceu.
   And firsliy, w.e recognize that then has been  significant turnover in the Agency'*
   resource community, resulting in many  new  employees new to the budget wodd,

        Tt has come to our attention  that then  are many unanswered question 01 fond
  availability and flexibility.  In  particular,  it is clear chat then has teas some confusion
  about when funds become  available for obligation tad how much flexfljflfty the Agency
  haj in making  resource  management decisions.  I would Uke to take advantage of these
  circumstances and take  a first step in providing some ^**fiffl«frff on the general
  concepts, controls, and procedures which make funds available for **»t***^

  AraJQabfflty of Funds
                                                                      *       •"'•">
        At lay time, the funds available to the Agency ii governed by nor bask
 documents:  (1) the Congreasiooal Budget Justification;  (2) tbe Appropriation Law under
 which the Agency it funded; 0) the OMB ApportioomcBt;  and (4) the Agency's        ;
 approved financial Operating  Plan.  la geneeal, each doooment governs § different aspect
 of the Agency's cash flow and flexibility.

 (1)   CofljrisgkaaJ Budget Jmtjfkrttoa provide Coupes* and the AdnlnlMtoii wit
       the Afcocy'i basic blueprint OB where we are  apeoding our money, watt zMuki
       we expect to achieve, and our accanplishrflents for the previous two fiscal yem.   '
       Since OMB tad Coofretf consider *Ms documeat to  be te basis of our budget,   '
       deviation from it usually requires action- by attier Congress aad/or  OMB.

(2)    Appropriation Uw provides the Agency wife the basic "Hfi'i'ttrlP  ertri&hed
       by Congress, ft indades the total level of foads available wfthia eaoh fiaaacatl
      •ceaiMtt MMJ ipaeMe friAiie*  tn tti« *f**J tfcimt|Si  yirfsy. ^p.^-l.tl^^
      languagc, report language, aad other kfislativt Watty, n* law aoacti me
      undedying structure of our appropriations  account! sod Oonfraasional Bodfet
      Justification with inodaVartoos spelled out fa the legislative history. The Law
      provides both  restrictions (account transfers;  Tttvel ceittngi; PC&B  floors) tad
      flexibility (reprogrunming  authority; appropfiation  chargiaf).

(3)    OMB Apportkmmeols control  the rate at which obUfatioai  can be made by the
      Agency aad in some instance the exact purpose for tbe oMigitkira.  Uanafly,
      OMB apportions tbe  Agency's  funds by quarter.  There tn, however, otber easw
      where OMB limits  me use of funds either throuffa  a set aside (b t "caMfoiy B")
      Of Lu^DUffu TOotDuCBfl CO »"^* j»i^jrt^TiQH^RMK«   LJB^B IBDlBE IUA fl>  IHHflH  flR
      ^r* •••• ** m^ff *««^n*^V«^^ V*^ VMMT «§WJTV» 9m9f9gm9 • W«* •  ^^•^•f • Vm^iHBW VS^W ^P>  HSi^Bi^  • V
      his been  OMB 'i establishment  ofadeao-up otegory in the SupatAad
      2ODOffuOfl^&fiBiM
                                                                                      ^
                                                                                      '^M%

                                                                                     ^Bs^

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               (4)    Approved Financial Operating Plan implements  the Congressional  Budget
                     Justification, Appropriations  Law, and OMB Apportionment.  Hie
                     Operating Plan essentially governs the purposes for which the Agency
                     expends funds.  The Operating Plan is the document against which the
                     Agency is monitored  for compliance  with Congressional  and OMB
                     directives.                                                           -

                     In an attempt to maintain  communication  with the resource  community and to
               implement these four governing documents, the Budget Division has ««*iMtfd  several
               institutional methods  of communication  du? provide  guidance as to the avtilabittty of
               resources to the Afency's managers.  Hie an:  (1) Advice of Allowance for each
               appropriation  to each Responsible  Planning and Implementation Officer (RPIO);  (2) tn
               online flMnAi Operati&g Flan contained in the t**y***d  Financial M*it*to>Hfflt
               System (IFMS); and (3) the Appropriations  Anatysif, Bins and Reports  digest

                     These sources of information establish spending limits at a detailed  level to
               ensure compliance  with appropriated  amounts, directives, and guidance flt|ri>v*inf
               ota and redoctioni)  as wen as OMB apportionment  restrictions,  The use and
               applicability of each guidance source is dependent upon the status of the Agency's
               inpropriataaai  and Operating Plan.

               Appropriation*
                                                             • •     ~* ••»
                  At the hngipning of the fiscal year, the Appropriations -Law governing the Agency
               will take one of two forms: either  an  annual Appropriations  Hp covering  the fufl year
               or a Contimriif BueohitiOB that coven a ibctter period of time, (ff the Apacy has no
               Appropriations  Law, the Agency must 'shut-down' operations  which is addreesed by BPA
               Order on Actions in the Event of an Appropriations and/or Debt Cefltag BOatus).  The
               status of the Agency's appropriations  significantly aflixts the level of ftm^
               the Agency and the •trw*1* of flexibility with which Ae Ageocy out opefaCB,  The
               foUowing lays out general  principles for the availabfltty offends under etch
               aporopriatioii  acenario  and attempts to uliistrate the uteflettuOoaiiiD  DctwoeB '^se
               controlling ^^v^'nifnTs listed above.

                     One special note, however,  is that the specific rules and coodifinns under which
               the Agency operates  can vary significantly from year to year.  Coogreas end OMB
               generally provide us with a complex set  at rates  that can he modified yearly, quarterly,
               or monthly.  The resource community should stay m close contact with the Budget .
               Division to determine specific needs during any fiscal  year and should follow the yearly
               guidance  and Advice of Allowance to implement the special  needs identified.
o

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     vailibtl      *         *1" M Annual Apropriation
      Tte budget statutes that govern the federal budget process provide that the
Agency begins its fiscal year on October  1 with an enacted Appropriation Bfll.  Once
the Appropriations  Bill is signed by the President, EPA has 30 dayi to provide in
enacted  Operating Plan to the Office of Management  and Budget (OMB) tad the
Congress for their approval.  This  Operating Plan uses the Congressional Budget
Justification as its baseline and modifies it according to Congressional  directives  .
contained  in the  Appropriations  Law.  In addition,  OMB  has 30 days following
enactment to  provide the Agency with the apportionment  of its appropriations.
      After ffltftmf"*  of the annual Appropriations bul. the Comptroller  transmits the
Appropriations Analysis, Bffl aad Report digest to each RPIO.  Ttts digect is an anaryiU
of the Appropriations bul, its legislative history, and its requirements.   TbJi l^jffp*1**^1
represents a formal delegation  from tbe Comptroller to tbe BKOi of die program
responsibilities contained  la our Appropriations Law aad its legislative Ustocy.
                                                                       i
      During the taffffrp period prior to approval of tbe enacted  Cyenllng  Plea,  the, _-•
Operating Plan based on  the President's  request  (Phase ID)  is loaded in tbe IFMS.  A   :
guidance Mfp^> buri on ******* tCT%rw?in>y ftthrfff fachKHi m OMB s^sportosBaeotB is;
issued to the RPIOs on how to proceed until tbe Afency hti at tppnved  Opentiag
Plan. We try to provide tbe maximum amc^ of rundt« to allow ac*mel Afency       .
operations.  However, RPIOt an advisedthat the- Opening Plan ta IFMS bis not been
adjusted to reflect  Congressional actions or tbe foil AAnlnlsfrtsnr_«1lsnUa1i« of   .
resources.  Itiexefore,  Agency  managen  must be pradeat aad oaten! m mnagjag mob*
1st quarter negates mat have been made available m the event that the mndrftarlnns
reduce tbe amounts available,...

      Once tbe  Operating Plan has been approved, me RPIO is notified through the
normal Advice of Allowance leoer.  Ms tater sets .out the funding aveHable to tbe
allowance holders  for mat quarter as well as provides guidance  on me ttmiations aad
flexibilities on the  use of mads (ceflings, floors, reprogramming  rvmirements).
       In recent yean, our annual Appropriations Bffl has not been eaected by tbe start
 of the fiscal year.  In this sffliation, the Agency begins the fiscal year under a GoatmgiBg
 Resolution  (CR).  During tail time, the RPIOs are provided genenl gaideace	
 memoranda from the Comptroller Budget  Division on the rules governing Agency
 operations  until we have a fun year Appropriations  taw tad the nsnltmf
 Operating  Plan. These rules include, but are not limited to, tbe use of f
 purposes for winch they were requested in the Congresakjoel Budget
 as the restraints included in the Continuing Resolution, as written by
 OMB's Apportionment  of me Continuing Resolution  funds.

-------
                                         5
       Generally, CRj  hold the Ajency to a more restrictive level thin our proposed
President's Budget.  At that more restrictive level, the Agency Is provided sufficient
funds for the time period covered by the CR.  The OR, however, mtly provide* enough
funds to cover 'normal" operations.  While  operating under a CR, each RFIO b provided
a portion of their total  appropriation  to obligate.  Because of the «iH*y process that
we have agreed to with OMB, the Agency maintains  significant flexibility.  Therefore,
monitoriDg and lockout of fuads during  this time are done at the MI*** poaifltie level
for each Allowance Holder.  Maximum  flexibility by program element  and object daw si
permitted.

Funding flexibility

      During the execution  phaie of the budget, the Agency out tike care to idta to
the limits  and constraints of its four governing documents. Within the T%frft however
the Agency «««*>•
-------

-------
                          .        €

                        ATTACHMENT
{•^E EXAMPLE.


     „ „ «"!s» SKJS'ti'SSS.SS'-
SSSSSS?-—
     .How do Agency managers operate under this scenario?
     In ttumi of tt» fffof fainting drevw*i nwfrrf, ** **"? *         -
 limbed Appropriations Bfll (CR) aad the (antonatic CR) appoatkcnwu  The fuD^ear
 Appropriationj Bill btaed on the Congresaioeal Budget Juttfficttkm, aad the Opentiai
 Plan, axe atiU pending. Puods are now available, however, aa U guidance and flexibility.

      The Cofflptrofier/Bodfet Ptviskn imn a series of state* aad gtddnce
 menunaada (or EMAIL) providiBg at much spedftc infouaaika and fcomal foadtag
 guidaace as is available  to EPA. Amoag other fcaajrw, this guidance aJsasLatxesnc
                               *-           ,
      2. AvBOabttity of ftiads (CR perceatage) »* the Appopri*don/Alkrwince  Bolder
  total level for each RHOfitegioa.  Allowance Holders are act held to lower .
  program element/object daai level during a CR.
                             •«
       So, even under the most restrictive (CR) dreomstaacea, mairtm^TfaaBJ^fi
  being provided within the total pool of resources avtilabk far the m&nt&iijefy
  fund the highest priorities based on their own o^ermBatoL  u safe nwrawmiT
  or aa ACftC grant to a particular State is the highest priority, ttoea the opptrtfflty for
   —   •   • *_ -i_».
  obligation ism place.
                                                             *

-------
        Now that • full year's appropriation  is enacted, the budget planning process, jf
 followed correctly should provide the Program Offices with availability of funds     |
 opportunities  to award any priority items (e.g. grants) in the first quarter  of the fiscal
 year.  The budget  process includes  steps to ensure  thtt we have this flexibility.
 Appropriations such as Construction Grants, Lust,  AC&C and R&D are
 disproportionately  "front loaded" in the  1st quarter  apportionment to allow Program
 i/iiices to.fund Priorities (such as grants i.1  the 1st quarter should they choose to do
 timing the pluses of Operating  Plan development.                ;  .•'    '

 CpNCLUSlQK-                                             '  •


       In terms of proper budget planning, the following steps  by the Progum Offices
 will allow for priority itaou to be funded in the flm quarter

       A  Peyton^ dterttmriom of the Pro, Budget retomce*  have beea made by the
 National Program Manager and incorporated  into tae OPIAN.
                     • •        "                   '             *  *
       B. Priority Items (aucn as gnnti)  have all been budgeted in the In quarter
 OPLAN by the RPIO during Fhaae EL
                                                             1
       C: RPIOt begin the obligating paperwork for tne priority temi as aooc aa the
year begins so  it is ready to go as soon as suffkknt  fundi OB,

       D. Commttmenti an ememJ  promptly ai soce u tbe Appropdattoci  Bfll y
aigned  and ZFM5 is open.                  .     ..

      E. Obligating  documents are promptly  rorw^flfe3 to Onott Qffloea, Coottacta
Offices, etc. for obligaiicm.

-------
              APPENDIX O
  STATE GRANTS GUIDANCE: INTEGRATION
       OF POLLUTION PREVENTION
O

-------

-------
                               OCJ_4/OLA DJV
                                               EPA/GAD
             UNTTID STATES CNVIRONItElfTAI. PROTECTION AGENCY
                       WASHINGTON. O.C. 20460

                          NQV 12 19S2
SUBJECT!
num.:
TO;
                                                           TOft
state Grants uuldance:  integration of Pollution
Prevention

r. Henry Hatoicht no}
Deputy Administrator
Assistant Administrators
Regional Administrators
     Attached is the n«w Agency-wide Guldoiiuu
pollution prevention into EFA'c media grant progr
in FY'94.  This Guidance builds on the Agency's- pollution
prevention commitment, already reflected in many exciting
activities throughout our programs and in the States.    '
                                             .ting
                                          , beginning
     X vant to thank all those who labored 00 effectively to
develop this Guidance.  The document reflects the many   '
constructive comments provided by Agency headquarters. Regional
Offices, and State governments,  in response to thove comments
the final product is shorter, tighter, and Jnss pr«snript:ive in
tone.
     With this Guidance in hand, the Agency ft»r» now tnovA quickly
to develop specific Guidance documents for our individual media
grant programs in concert with our State partnere.       |

Attachment
                                     tt'^^sf
                           *»<:<$&&    I

-------

-------
            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460

                           NOV  1 2 1992
                                                      OFBCSOF
                                                   ItCAOMMISniATQR
          State Grants Guidance : Integration of Pollution
          Prevention
FROM:
TO:
F. Henry Habicht
Deputy Administrator
Assistant Administrators
Regional jtwainistrator?
     This memorandum announces the Agency-vide pollution
prevention Guidance, beginning vith the FY'94 State grants  cycle.
It has four goals:                                       j
                                                         i
     »    Promoting pollution prevention in State programs
          supported through Federal grants by establishing
          National Principles to guide vorkplans negotiated
          between Regional Offices and States;

     •    Ensuring that grant requirements as interpreted by
          EPA/State vorkplans are flexible enough to support
          innovative State pollution prevention activities;

     •    Establishing a simple accounting process to  share
          information on successful State projects, and identify
          statutory or other barriers to funding State proposals;
          and

     •    Building sustained state capacity in pollution |
          prevention to the extent consistent vith statutory
          grant requirements.

All of these objectives are subject to any statutory and
regulatory limitations that apply in specific circumstances.

     The Guidance should help integrate pollution prevention  into
th* Agencyfs activities as required by th* Pollution Prevention
Act of 1990.  By emphasizing flexibility, the Guidance  |
complements other Agency efforts to build a productive  ;
environmental management system in partnership vith the States,
and Improve coordination vith existing State pollution prevention
programs.                                                '

-------
      In general,  this Guidance applies to  all of the Agency's
media-specific state grant programs, but particularly to the
following:  Clean  Air Act $105— Air Pollution Planning and!
Control? Resource Conservation and Recovery Aer; $3011— Hazardous

                      '
                                       and Redentieide Adfc
       (1)— Pesticides;  Toxic  Substances Conta-al it* $28— i
Enforcement and Enforcement Activities under 5313 of the |
Emergency Planning and  community Right-to-Khow Act; and clean
H***r Act S106— Surface Water, S 104 (b) (3) —Wetlands and Water
Quality Management, and S3l9(h) — Non-Point Source Management.

        Building oh the  Agency's  many successful pollution
prevention efforts, beginning in FT* 94 EPA's grant programs —
working with States— should explicitly promote pollution j
prevention in state workplans (also called agreements) .  This
memorandum will be incorporated  into the annual Agency Operating
Guidance as well as program-specific Guidance developed this  *  -M
vmter with the advice  of the State/EPA Operations Committee.  i«
Program Guidance,  intended  to tailor the Agency-wide commitment
to each grant program,  will be applied by Regional offices
States in the development of  grant-assisted work.        j  .

      The national Principles  stated below should help guide
development of BPA/State vorkplans.  These should be reflected in
program-specif ic Guidance,  weighed in workplan discussions, and
used  to qualitatively assess  program progress in integrating
pollution prevention.   la applying these Principles, Regional
Offices should use or expand  upon the menu of flexibility! options
below to respond to state needs  to the extent possible.  Annual
accomplishment reports, discussed below, will help assess] EPA 's
progress in supporting  pollution prevention-oriented state
vorkplans and initiatives.

                        Kati.enal

     Guidance for each grant program covered by this document
should make, clear that pollution prevention—as defined in the
Agency-wide memorandum of May 28, 1992 (attached)—is EPAfs
preferred approach to environmental management where technically
and economically feasible.  Consistent with the pollution j
Prevention Act, the Guidance should further the integration of
pollution prevention into State activities—e.g. inspections and
permits—that are supported by EPA grants.  While pollution
prevention is not mandated, the Principles are intended tb ensure
that it is considered fairly in EPA/State workplans.     j

     Specific proposals from States that are consistent with
these Principles should be considered good candidates for!funding
through the grant programs,  in addition, Regional Offices should
take the initiative to suggest pollution prevention approaches,
drawing upon program-specific Guidance and implementation!
workshops.  Regional Offices and states are expected to use their

-------
11/18/82   11:35    ff202725'2 0516  5       OCLA/0& DIV  ^;*** EPA/GAD            tfOOS
    discretion in applying these Principles; they are not obligatory
    elements of every negotiated workplan, but rather factors for
    serious consideration in the negotiation process.        j

    The Principles are:                                      i

    1)  The workplan applies the EPA definition of pollution
    prevention (see memorandum of Hay 28, 1992) consistent with the
    Pollution Prevention Act of 1990 and the 1991 SPA Pollution
    Prevention Strategy.                                     [

    2)  The workplan reflects an explicit preference for pollution
    prevention and identifies pollution prevention activities^
    products, or approaches.                                 j

    3)  The workplan -Jicorporates pollution prevention as a priority
    in environmental management decisions made by the grantee' as part
    of the grant-assisted activities.                        j

    4)  The workplan encourages opportunities to modify existing or
    to develop new equipment, technology, processes, procedures,
    products, or educational or training materials to promote
    pollution prevention.

    5)  The workplan encourages institutional coordination—including
    coordination with existing State pollution prevention programs—
    and multi-media opportunities for pollution prevention.  |

    6)  The workplan complements or builds upon existing EPA j
    pollution prevention projects (e.g. the work of multi-media
    industry clusters such as the Source Reduction Review Project,
    and the use of pollution prevention in enforcement settlements).
                                                             i
    7)   The workplan identifies and applies measures and ways,of
    documenting pollution prevention progress as part of the grant-
    assisted activities (e.g.  provides opportunities for measurable
    pollution prevention).                                   |
                                                             i
    8)   The workplan includes activities or approaches that may serve
    nationally, as innovative models for other state or local {
    programs.  Workplans also should encourage innovative approaches
    already developed by other State or local programs, and improve
    coordination to build on existing successes.

    9)   The workplan structures grant output information so tnat EPA
    can make pollution prevention data and experience available to
    other States and the Pollution Prevention Information
    Clearinghouse.

    Clearly, both partners must coaply with any applicable statutory
    or  regulatory requirements and tahe into account other factors
    that may be important.  Regional Offices and states may identify

-------
                                 4

 additional Principles to guide worJcplan requirements.
                                                          r
      Many Regional Offices already have made adjustments to
 accommodate flexibility needs.  The purpose of this Guidance is
 to encourage such flexibility.  Whenever possible,  workplans
 should accommodate State flexibility needs associated with
 incorporating pollution prevention approaches into  their grant-
 assisted activities.  That means working within the parameters of
 statutory and regulatory requirements to arrive at  an agreement
 that is practical and meets the parties1 needs.  Options for
 flexibility include (but are not limited to):            j

      a)   Adjustments in numbers or types of required outputs
      including, for example, (l)  tradeoffs or disinvestment from
      traditional requirements (non-statutory and non-regulatory]
      and (2)  multiple credit for a single "multi-media"  j      •
      inspection that emphasizes pollution prevention.    • ;
        —An example of (1)  is RCRA's RJP-Flex Guidance, which   <:;
      allows disinvestment from national priority activities and v %
      re-investment in Regional or State priorities:  up to j25% of
      enforcement resources in FT'92 and '93.      .        j
        —An example of (2)  is being tested in Region One with  r
      Massachusetts* Blackstone project.   The key issue is jnow to
      "bean-count" a single multi-media Inspection claiming  to
      satisfy enforcement requirements under multiple statutes and
      promote pollution prevention technical assistance.   j

      b)   Adjustments in timing of non-statutory and  non- j
      regulatory EPA deadlines.                            j   ..
                                                          I  *
      c)   Identification of a percentage of funds for pollution
      prevention within each media program,  coordinated by a
      pollution prevention office.
       —For example.  Region 10 has agreed to Alaska's request to
      allow  the State to identify  3% (5*  over  the next  two jyears)
      of  grant program monies—RCRA,  air,  and  water—for pollution
      prevention,  to be coordinated by the pollution  prevention
      office.   The monies will be  reflected in specific activities
      reasonably: related to  each program's contribution and;
      statutory objectives.   The annual EPA/State Agreement  will
      explicitly identify pollution prevention activities and
      specific disinvestments in each program.

      d)   Adjustments in traditional or administrative  procedures
      or  schedules to ease EPA/State interaction.
     To allow EPA to evaluate progress in integrating pollution
prevention into State grant programs, each Regional off ice should

-------
li/18/82   11:56    O202 252 0516 v
OCLA'OLA-DIV
t-- EPA/GAD
    provide an annual report summarizing pollution prevention1
    accomplishments  (e.g. activities, products, approaches, etc.), as
    reflected in grants-assisted work.  The report may take any form
    and may draw upon reports developed to satisfy other    . !
    requirements.                                            j     .
                                                             |
         While program-specific Guidance may elaborate further, each
    report should identify: a) success stories, including innovative
    State projects funded under this Guidance; and b) any barriers
    (statutory or otherwise) that led a program to reject State
    proposals or. to decide against including pollution prevention
    approaches.  In -addition, recommendations on regulatory, j
    administrative, or other changes to improve flexibility would be
    helpful.  Your contribution of this information is key toj making
    pollution prevention a reality in EPA's on-going bread and butter
    work.                                                    !
                               Concilia
         Incorporating pollution prevention into EPA's policies and
    programs is a collaborative effort requiring EPA to work in
    concert with our state partners.  The National Principlesjand
    Annual Reports described above will help us to measure our
    progress and build on our successes.                   '   I
                                                              i
    Attachment

-------

-------
      APPENDIX P
SF 424, APPLICATION FORM

-------

-------
  OMB A0PJO*« NO 034MOI3
F™ERAL ASSISTANCE
1 E OFBUBMJS8IOI
• Q ConwucUan
y Q NavConeruaKT
X: 1 DATE RECEIVED BY 8TA
Pn .'iMan


LJ 9*»l'UO«K) 4_ JjA^E RECEIVED BT FEDERAL AGENCY FMW* >0»niil»r ,
. [ J NO^vWfucfDfl
1 APPLICANT INFORMATION
LvgttNm:
Aodra** fonv ety. aaunty. MM*. »»»«> OB*;;
j
*. EMPLOYER IDENTIFICATION NUMBER (EIN):

•II
ft TYP£ OF APPLICATION
O "** O Conimfltlan 'IH RwMon
A lna«u« AwmrC
0 OKMJM Oufiut
B. OMKMM Amid C. tncrtm* Duuiion
n D. OtlNf (Mttdy);
• CATALOG OP FEDERAL DOMESTIC _| I
AUBTANCE NUMBER: 1 1
WfLE:
Mkk a AFFECTED B
F

f PROJECT (et&t. cmjittoi, slsiu*, nc,}'

Orpanizuionw Un«:
K«m» end u^phom nuntvr a in* pwton 10 b* aoniacwd on nun«i involving
H»woiiBUM0M««ieDew - -
7. TYPE OF APPLICANT: (MOW tfvnptoi Mtwr in bail | I
A. -SUM • M. \nttptnavtt School Diti.
B. Cownv 1. SUM ComraiM in»nutan a* Higher LMrnng
0. ToM»hp K. IndanTrb*
E. tMCilM L. IndMOu*'
F. biMnrunicvd M. Pmtt O's«na«on

1. NAME OF FEDERAL AGENCY
1 1. DESCRIPTIVE TITLE OF APPLICANTS PROJECT:
il PROPOSE 0 PROJECT: 14. CONGRESSIONAL DISTRICTS OF:

Endiig 0«t «. Appiemm ' b. PIOIM
li. ESTIMATED FUNDING: • it IS APPLICANT SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS?
* FMml ^ •
b A«*c*"
C SMU
0. Leal
• ax*
I. Piogrim Incomt
5. TOTAL
A. YES. THIS PREAPPLCATIONyAPPLICATON'WAS MADE AVAILABLE TO THE
STATE EXECUTIVE ORDER 1M72 PROCESS FOR REVIEW ON
* 00
DATE:
*

b. NO. ("I PROGRAM IS NOT COVERED BY E.0. 12372
1 * n
II OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW
t 00
1 ,00 IT. IS APPLICANT DELWOUENT ON ANY FEDERAL DEBT?
t £0 r"*l Y« It •>««,• aucn 10 •mMniten. j | No
M. TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL DATA W THS APPUCATtOWPREAPPUCATION ARE TRUE AND CORRECT. THE DOCUMENT HAS BEtN DULY
n*« **.«***«,« «*-*«*. 6. T,. C. T.*non.nu«.r
C • ol AumorvM R*pr«Mnutm • «. 0«« Sgncd
                  (REV 4.881
Pfwcnbx) er OMB Circviar A-10?

-------

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-------
          APPENDIX Q
LIST OF HEADQUARTERS AND REGIONAL
      MBE/WBE COORDINATORS

-------

-------
Josiah N. Prlpp, SDBUO

Jamttv younger, SDBUO


U.S. Environmental Protection Agency
Region I
John p. Kennedy Federal Building
One Congreea Street
BUM ton, MA  02201

RMIPH II

Dana P. Will lama, SDBUO


U.S. Environmental protection Agency

Region II
Jacob X. Javitta  Peder?\  Building
25  Federal  Plaza
New York. NY   10278
 Mary Zlelinski, SDBUO
 U.S. Environmental Protection Agtmcy
 Region III
 641 Chestnut Building
 Philadelphia, PA  10107

        *v
 James P. ravoro, SDBtin


 U.S. Environmental  Protection Agency

 Region  IV
 34S  Courtland Street.  KB
 Atlanta, GA  30365

 MQIOM  V

 Robert  Richardsnn,  SDBUO


  U.S. Environmental Protection Agency
  Region V
  i? West Jackson Boulevard
  Chicago, IL    6060*- 3507
     (€17)  S65-326S
PAX  (617)  btiS-3346
     (617)  565-3427
FAX  (C17)
 PAX
(212)  564-8218
1212)  264-8100
 PAX
 (215) 597-6795
 (215) 597-6170
  PAX
  FAX
 (404)  347-22UO
 (404)  347-1043
  (317)  353-56-7
  (312)  353-909*

-------
Mta J. Brown,
U.S. Environmental Protection Agency

Region VI        _    Tower at Fountain Place
First incemtate Bank Tower
12th Floor, Suite 1200
1445 ROB 8 Avenue
Sin... TX  75202-2733
                               (21*)
                               (214) 655-2146
 wnalo Mayberry,  SDBUO
 Srol Rompage.  «nBUO


 U.S.  Environmental Protection Agency
 Region VII
 726 Minnesota Avenue.
        City. KS  *«101
,  SDBUO
 0.3. Environmental  wotecUon Agency
 _  _-t __ »»TT T •
               et,  Suite 500
               80702-2405
BifllflH VIT1

Maurice
  Denver,  CO
  Mike Schulz, SDBUO


  U.S. Bnvironmtntal Protection Agency

  Region IX
  75 Hawthorne flt£**   1Q5
  San Praneisco,  CA 94105


  UQIflUK

  Marie T.. McPeak


  U.S.  Environmental Protection Agency

   Reqion X
   1200 Sixth Avenue
   Seattle, WA  98101
                                (913)
                                (913)  551-734C
                           FAX  1913)  551-7579
                                                    (303) 294-75061
                                              PAX   (303) 294-llSy
                                  (415)
                            FAX   (415) 744-1676
                                  (206)
                             FAX  (206) 553-4957

-------
            PUD
 Norm White, SUBUO
 U.S.  Environmental Protection Agency
 Cincinnati Contracts Management Division
 Cincinnati,  OH  45268
QSSSB. (A-149C)

toarge K.  Mori
         D. Near
           (OS 200}
Jan Baker
Btate StevolviBo Fund (WH-547)

Kii. Parber


                       (PM-216F)
T.upe Saldana,  9DBUO
Richard Johnson
Mark Gordon
                     132G)
      (919)  366-2024
PAX   (919)  366-2004
     (703) 30S-6301
     (7Cm 3US-5023
VAX  (703) 30S-C4G2
      (202) 260-2180
PAX   (202) 260-4386
      (202) 260-3973
PAX   (202) 260-0116
      (202)
      (202) 260-5296
FAX   (202) 260-1828
     (202) 260-8886
PAX  (202) 260-8392
                                                       TOTflL P.04 "

-------

-------
         APPENDIX R
OFFICIAL PROJECT AND GMO FILES

-------

-------
                -OFFICIAL EPA PROJECT FILE

Project File: The official file developed and maintained by the Project Officer to serve
as a collection of documents and or items that provide programmatic and/or fiscal
information on the purpose, performance and history of an award to a sepcific
recipient.
     Contents:

     Parti


           1) Copy of application and any application amendments with
           Work Plan/Budget (copy)

           2)  Administrative Review Checklist signed by the Grants
           Specialist and the Project Officer  (copy)

           3)  Quality Assurance documentation

     Partll


          1) Correspondence relating to the application and/or
          summaries of same

          2) Application reviews, in-house and extramural

          3} Programmatic reviews
         4) Program Program memo regarding funding recommendation
         to Regional Administrator
   Part III
         A copy of Assistance Agreement and any amendments (a copy
         of agreement should be retained until a signed original is
         returned by recipient to the Grants Management Office (GMO).

   Part IV


         1) Copies of Correspondence relating to the awards
              A. Award letter
              B. Acceptance letter
              C. Close-out letter

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             2) Correspondence concerning negotiations and agreements  '.
                  **»«•                         '                               "
             3) Recipient requests for deviation; EPA approval or denial
             4) Correspondence concerning continuation or renewal of
             project
             5) Site visit reports
             6) Administrative reports
             7} Stop-work order and related correspondence
             8) Correspondence concerning termination actions
             9) Correspondence concerning disputes and appeals
             10) Final determinations
             11) Audit reports                                          '
             12) Regional and General Counsel opinions
                                                                            '
             13) End of year evaluation
       PartV
             1)  Reimbursement requests (copy)
             2)  Payment vouchers (copy)
             3)  Financial Status Reports (copy)
             4)  Automated Clearinghouse Authorization (copy)
             5)  Increase and decrease amendments (copy).
            6) Close-out checklist/memo (copy)
            7) Commitment Notices  (copy)
      PartVi
            Technical Reports - if the report is too bulky, place it in an accordian file
and rubber band it to the  six part file. If it is a film, computerized disk, etc.. a document
spelling out its location must be filed in this section.

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                        OFFICIAL EPA GMO FILE
Official EPA GMO File: The official file developed and maintained by the Grants
Management Office to serve as a composite collection of documents and or items that
provide programmatic and fiscal information on the purpose, performance and history
of an award to a specific recipient.
Contents:

      Part I
      Part II
1) Complete application and eny application  amendments (original
signed)

2} Administrative Review Checklist (original signed by Grants Specialist
and the Project Officer).

3) Procurement System Certification (original signed)

4) Governor's letter and certification for Superfund enforcement.

5) Ami-Lobbying Certification (original signed)

6) Debarment/Suspension Certification (original signed)



1)  Correspondence relating to the application (copy)

2) Applciation reviews, in-house and extramural (copy)

3) Programmatic reviews (copy)
           *
4) Program memo regarding funding recommendation (copy)
      Part III
            Assistance Agreements and any amendments (a copy of agreement
            should be retained until a signed original is returned by the
            recipient)

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    Paniv
          1) Correspondence relating to the awards
                A. Award letter
                B. Acceptance tetter
                C. Interim close-out letter
                D. Close-out letter
         2)  Correspondence concerning negotiations and agreements
         3) Recipient requests for deviation; EPA approval or denial
         4) Correspondence concerning continuation or renewal of project
         5)  Site visit reports
         6) Administrative reports
         7) stop-work order and rotated correspondence
        8) Correspondence concerning termination actions
        9)  Correspondence concerning disputes and appeals
        10) Final determinations
        11) Annulment                                       •
        12) Requests for audit
       13) Audit reports
       14) Correspondence related to audit reports and resolution of audit
       findings
       15) Regional and General Counsel opinions
       16) Interim and final audit reports, comments and resolution
       17) Final disputes decision and any appeal or reconsideration
      determination/resolution documents
Part V
      1) Reimbursement requests

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     2)  Payment vouchers
     3)  Financial Status Reports
     4) Automated Clearinghouse Authorization  (ACH)
     5) Increases and decreases
     6) Close-out check list
     7) Commitment Notices
Part VI
            Funding recap

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            APPENDIX S
FINAL CLOSEOUT POLICY FOR ASSISTANCE
           AGREEMENTS

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      EPA CLOSEOUT POLICY FOR GRANTS AND
               COOPERATIVE AGREEMENTS
Introduction
Parti:     .'Purpose and Objectives                          .     '
Pat II:     Basic Gaseout Requirements for Grants and Cooperative Agreements
                A.  Roles and Responsibilities
                B.  GICS Requirements
                C.  Notification and Follow Up
Part IH:     Program Specific Requirements
                A.  State Revolving Fund Program
                B.  Superfitnd
                C.  Construction Grants

Part IV:     Record Retention Requirements

Part V:     Audit Resolution and Disputes

Appendix Ar Listing of Existing EPA Closeout Regulations. Policies, and Related Guidance
Appendix B: Listing of GICS Data Elements Used in Closeout
Appendix C: types of Construction Grant A\vards

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                             AUG 2 7 1992
MEMORANDUM
          Harvey G.' Pippen, Jr., Directojt*"c-
          Grants Administration
SUBJECT:  Final Closeout Policy For Assistance Agreements

FROM:


TO:       Assistant Regional Administrators
          Grants Management Offices
          Regions I-OC
          Millie Lee, Chief, Grants Operations Branch
          Carlene Foushee,  Acting Chief,  Grants Information and
               Analysis Branch
     We are pleased  to issue the attached final Closeout Policy.
This policy  establishes EPA's closeout  requirements for closing
out completed grants and cooperative agreements and deobligating
unliquidated obligations for  all  of EPA's  assistance programs.
This policy represents the combined efforts of all of the members
of the Closeout/Deobligation task force ever the  past year.  He
greatly appreciate their time and many contributions  in developing
this policy document.

     We  strongly  encourage  you to  use  the  policy and  again
emphasize  the  importance  of continuously closing out completed
projects  and deobligating  unliquidated  obligations in  a timely
manner.   Closeout  is  an essential  function of  prudent grants
administration.

     Finally, ve ask that you develop your .;*n specific Regional
(wr headquarters) procedures to implement the closeout requirements
in this policy.

     If  you have  any  questions regarding  this  policy,  please
contact Bruce Feldaan on 260-5268.
Attachment
CCi
     official
     Reading
     Division
     K. Ross
     L. Ross
     M. Lee
R. Johnson
S. McMoran
C. Allison
R. Mitchell
A. Mason
C. Fousbee
B. Feldman
M. Cody
E. Haffa
C. Thomas
v. Martin
R. Meunier
     Taskforce Members
PM-216F: V.Martin:RM  801 FC:260-9294:8/14/92

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PARTI    PURPOSE AND OBJECTIVE

       The purpose of this document is to establish EPA policy for closing out completed giants
and cooperative agreements for all EPA Assistance Programs.

       Closeout is the systematic process by which EPA determines that all required technical
work under a grant or cooperative agreement has been completed by the recipient and EPA, and
all applicable administrative requirements met.  Protection of the government's interest and
prudent grants administrative practices require that sufficient time and effort be devoted to the
closeout process.

       This document includes the closeout requirements basic to all grants and cooperative
agreements, the roles and responsibilities of EPA and its recipients, and the specific closeout
requirements unique to the Superfund, Construction Grants, and the State Revolving Fund (SRF)
Programs.                                                     .

       The procedures to follow for timely closeout of all completed projects are contained in
40 CFR Part 31 Subpart D, 40 CFR Part 30 Subpart H,  40 CFR Part 35.6780,  and the EPA *
Assistance Administration Manual (Chapter 40). This policy supplements and clarifies lexisting
agency closeout policy.

       EPA should close out Don-construction grant projects within 180 days  after receip^B
of all required reports and other dellverabks. Delays can unnecessarily tie up  obligated but^
unexpended funds. Also, closeout  becomes more difficult with the passage of  time because
persons responsible for managing various aspects of a project may resign, retire, or transfer;
memories of events are less clear; the interests of the Project Officer and Project Manager may   '
shift to other priorities; and award documents may become tost or destroyed.

       For Construction Grants, closeout should occur within six months of the last grant action
which can be any one of the following acuons:

       •      Final audit resolution

       '     . Project screenout

       •      Project returned unaudited by OIG
                                                                                       i
       •      Administrative completion for grants less than $1 million

       •      Regional or Headquarters issuance of a decision of an appeal filed in accordance
             with 40 CFR Parts 30 and 31.

       •      Final debt collection,  forgiveness of debt or dismissal of debt.

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 PART H   BASIC CLOSEOUT REQUIREMENTS FOR GRANTS AND
              COOPERATIVE AGREEMENTS

       A. Roles and Responsibilities
                                                                               t
     This section outlines Jhe basic  closeout roles and responsibilities of the Recipient,  the
 Program Office, the Grants Management Office (GMO) and the Financial Management Office
 (FMO).
 Recipient      '

 1.     Complete all work satisfactorily and timely as specified in the assistance agreement.

2.     Submit the following required reports to EPA within 90 days after the project completion
       date:

       o     Final Technical Report '
       o     Final Financial Status Report (Standard Form 269 or 269 A)
       o     Federally Owned Property Report, if applicable
       o     Invention Disclosure Report (EPA Form 3340-3), if applicable
       o    . Final Request for Payment (Standard. Form 270), if applicable
       o     Final EPA ACH Payment Request, if applicable
       o     Outlay Report and Request for Reimbursement (Standard Form 271), if
             applicable
       o     Property Inventory of all Federally Owned Property, if applicable
       o     Final Minority Business Enterprise/Women Business Enterprise Report (Standard
             Form 334), if applicable

3.     Submit a written request to EPA's award official to request an extension of time to the
       90 day period required for submittal of the FSR (or other required reports), along with
       a justification for the extension.

4.     Submit all manuals, plans, specifications, data, or other deliverables as required in the
       assistance agreement to EPA, or make the deliverables available for EPA inspection.


The Program Office (Project Officer)
                ^

1.     Review and approve all technical reports, including final technical/performance reports
       in accordance with the requirements of the award and the statement of work.

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2.     Ensure that any/all deliverable* required under the award are received when required by'
       the award, and are acceptable.

3.     Certify to the GMO within 90 days of completion of the project that all work has been
       satisfactorily completed.  For continuing programs,  specific work elements  may be
       earned forward and funded in the next year provided the recipient submits an application
       with an acceptable workplan.  For additional information, refer to Comptroller Policy
       Announcement N. 88-09, "Disposition of Unobligated Balance of Assistance Awards.'

4.     Certify to the GMO within 90 days of project completion that all tehnical (programmatic)
       award conditions have been met.

The Grants Management Office (GMO)

1.     Ensure receipt of final certification of project completion from the project officer, receipt
       of all required reports including the final FSR, MBE/WBE, invention disclosure, and
       Federally owned property reports, and compliance with all terms and conditions of the
       grant.                                                               *
                                                                        I      W
2.     Provide  property disposition instructions (as necessary)  to   recipients, and ensure
       receipt/acceptability of property inventory report; and ensure reimbursement to EPA of
       its proportionate share of equipment or supply inventories, if applicable..

3.    . Receive and approve the Final Financial Status Report (except for construction grants)
       and:
                 *
       o     ensure timely receipt and distribute  copies to program and finance offices as
             necessary;

       o     review and analyze FSR's contents, induing recipient's cost share;

       o     maintain/update current information in the Grants Information and Control System
             (GICS),i.e.,FINANCIAL-STATUS-CODE,FINANCIAL-STATUS.DATE,and
             ACTION-CODE;

       o     ensure that financial data on  FSR is reconciled with the Integrated Financial
             Management System (CFMS);

       o     determine allowability of any reported indirect costs based on the provisions of
             the assistance agreement and the final negotiated indirect cost rate;

       o     determine amount of any unliquidated obligations and/or funds owed to EPA by
             the  recipient and provide instructions to the FMO for the  disposition of those
             funds.

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                                      '5
4.    Request final audit (if applicable and required for closeout)
5.    Prepare close-out amendment.
      o     Ensure receipt of request for final payment; review and approve appropriateness
             of such payments and notify the FMO to process or deny the payment.
      o     Ensure compliance with Agency's carryover policy.
      o     Ensure that the FMO makes necessary adjustments to IFMS and deobligates
             any unliquidated obligations as appropriate.
      o     Complete Assistance Adjustment Notice (EPA Form 5700-42) or Assistance
             Amendment and distribute to FMO and Program Offices.
6.    Prepare close-out letter
    v o     Issue final close-out letter to recipient and provide .copies to the appropriate
             Project Officer and FMO.
7.    Retire file and follow appropriate record retention requirements. (See page 11, Part IV)
Financial Management Office (FMO)
1.    Assist GMO in reconciling IFMS data with reported FSR data.
2.    Review  close-out amendment  and  either  deobligate  any  unliquidated
      obligations, or bill the retipier:  for any funds Hue EPA; establish an  accounts
      receivable if appropriate and perform follow-up collection efforts.
3.    Make necessary  entries to  IFMS for any deobtigations and collections.
4.    Approve/process final payment request.
      B. Tht Grants Information and Control Systems (GICS) Requirtmtnts
      The Grants  Information and Control System  (GICS)  is EPA's official assistance
information management system and plays an integral part in the closeout process. It provides
grants managers with information to manage and track progress on grant agreements.  The
system contains a collection of closeout data elements to track a grant's progress through the

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closeout process.  Giant specialists update the closeout milestones in GICS by accessing the
appropriate closeout screens in EPA's Automated Grants Document Systems, i.e. the Regional
Automated Grants Document System (RAGDS), the Headquarters Automated Grants Document
System (HAGDS), the Fellowship Automated Document System (FADS), and the Interagency
Agreement Management System (IAMS), as each milestone is achieved. The most frequently
used closeout milestones for non-construction grants are incorporated into a Table below
Appendix B contains definitions for these milestones and general information on the closeout
screens used for Construction Grants. Further information on these data elements can be found
in the GICS Data Dictionary [GIRD] and the Headquarters and Regional procedural manuals.
                           COMP-LTR-SENT-CODE/DATE (Ml)

                           FINANCIAL-STATUS-CODE/DATE (MS)

                           REAL-PROPERTY-CODE/DATE (L7)

                           PERS-PROPERTY-CODE/DATE (U)

                           INVENTION-CODE/DATE (L4)

                           FINAL-REPORT-CODE/DATE (L8)

                           AUDIT-REQUEST-DATE (N8)

                           AUDIT-RESULTS-CODE (N9)

                           FINAL-AUDIT-DATE (91)

                           ACTION-CODE/DATE
      C.  Notification and FoUow Up

I.    Closeout Notification

      Monthly

      The GMO should  provide each Grants Specialist a Grants Information and
      Control  Systems  (GICS)  printout  each  month  which  identifies  those
      projects/agreements that are in the closeout process or are scheduled to end in the
      next 90*120 days. These printouts (Status Report of Projects Completed But Hot

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2.
 Closed Out) list projects in sequence by project-end-date and indicate the status
 of each milestone. event leading to close out and the date that it was entered as
 such.

 90 Davs Before End of Project Period     .     .

 The Grants Specialist prepares for the EPA Project Officer a "completion alert"
 90 days before the end of the project period.  The memo requests information on
.whether the project/budget period needs to be extended !or if the assistance award
 can be closed out.

 Follow up Schedule

     Davs after Completion.
A letter requesting the necessary closeout reports should be mailed to the individual who
accepted the most recent award document on behalf of the recipient, with a copy to the
EPA Project Officer.

90 Days after Completion

The recipient will submit final progress (technical) reports to the Project Officer 90 days
after the project's completion or end date, whichever comes first and notify the GMO of
their receipt and acceptability.   Other reports,  including the final Financial Status
Reports, are also due within 90 days, and should be submitted to the Grants Specialist.
The Grants Specialist will then review those projects that have overdue reports (over 90
days) and determine whether another followup letter should be sent to the recipient.  This
letter must be tailored to address specific deficiencies of the project, e.g., what required
deliverables were not received and are overdue?  A copy of this letter should also be sent
totheFMO\PO.

120 Davs after Completion

If the recipient has not provided the information  required for closeout 4 months  after
completion of the project, the Grants Specialist should confer with the Project Officer
and send another follow-up letter. This letter shall  be signed by the RA/ARA  or
Director, GAD (for headquarters projects), and addressed to the head of the recipient
organization, with a copy to the FMOVPO.  It should provide  a chronology of earlier
efforts to obtain the materials required by the agreement, enclose a copy of previous
reminders and follow-up correspondence, and establish a specific date (suggest 2 to 3
weeks) for receipt of a response.

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                                          8
       180 Davs after Completion
       Closeout should be completed within 6 months (180 days) after the end of the agreement.
       When closeout has been completed, the Award Official should provide the recipient with
       the closeout letter or a letter of final determination, with copies to the FMO and PO.
       (See Disputes Section in Part V)                                ;
                                                                    ! ?

Part ED:   Program Specific Requirements

       A. State Revolving Fund Loan Program
       This section defines the basic policy on the timing of capitalization grant closeout and
highlights specific SRF requirements.  Capitalization closeout procedures parallel closeout
procedures for continuing program grants.

       In general, closeout will occur at the end of each capitalization grant's budget period, i.e.
.when all the cash is drawn down from that grant providing, however, that the audit for the State
fiscal year in which the last cash draw occurred has been issued and any findings resolved  '
Closing a capitalization grant will not mean that all statutory work and regulatory requirements
have been satisfied.1  Nor will closeout indicate that all the "work' agreed to in the assistance ;
agreement has been completed or that all the loans have been  repaid.  Rather, closeout will
indicate that EPA is satisfied that the State has established a viable and fiscally sound SRF loan
program.  EPA will assure continued compliance with statutory and regulatory requirements by
reviewing a State's Intended Use Plan [40 CFR 35.3150], reviewing a State's Annual Report
[CWA Title VI, §606
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recipients.  Recipients of other Superfund giants, such as; Research and Development; and
Technical Assistance Grants (TAG), follow the closebut requirements for project-specific grants.
     Superfund Cooperative Agreements

     Superfund response Cooperative Agreements (CAs) provide funding from EPA to conduct
the response activity at a Superfund site.  These CAs can provide funding for the following types
of activities:
  Prt-Remedlal Activities
Remedial Response
Activities
Other Activities
  Preliminary Assessment
  (PA)
  Site Investigation (SI)
  Hazardous Ranking System
  (HRS)
Remedial Investigation (RI)
Feasibility Study (FS)
Remedy Selection/Record of
Decision (ROD)
Remedial Design (RD)
Remedial Action (RA)
Removal Program
Core Program
Enforcement
Support Agency
    In a Superfund CA, closeout of the CA usually occurs when all work* as specified in the
scope of work, has been completed.  Due to the complexity and  "umbrella-like' structure of
Superfund CAs, closeout can often become an unduly complicated situation, with many activities
taking place over extended periods of tune.   To improve our management of Superfund CA
closeout, it is desirable to close out each diverse activity or operable unit as it is completed.  As
each 'activity or operable unit is completed,  the activity would be designated as an "Activity
Completion" and the same steps in the closeout process would be  followed.  In the case of a
pre-remedial or a remedial CA, as each activity  (or operable unit) is completed,  activity
completion (or operable unit completion) should  take place for that discrete activity.    This
approach is a more manageable way to ultimately achieve closeout of the entire agreement.

      Since many Superfund  CAs last for many  yean and may include more than one site, it
is important to initiate completion by activity, site, or operable unit This will simplify  the
administrative  closeout process later on when  the entire agreement is closed out, and will help
the cost recovery effort which may begin before all activities at the site are complete or  when
all sites under  the multi-site are complete.

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                                          10

    For a Superfund site-specific CA, if the CA is terminated when a responsible party takes
over the cleanup or the lead changes from State to EPA, the CA should be closed out and any
unliquidated obligations balance should be de-obligated.

       A Superfund Core Program cooperative agreement provides funds to a State or Indian
Tribe to conduct CERCLA implementation activities that are not assignable to specific sites, but
are intended to  support a State's (or Indian Tribe's) ability to participate in the CERCLA
response program.  In the Core Program, the CA is closed out when the activities identified in
the scope  of work are completed.   Likewise for Enforcement, Support Agency, or Removal
cooperative agreements.  When all required work as specified in the scope of work has been
completed, the CA should be closed out To close out a Superfund CA, the GMO and PO must
follow the requirements specified in Part H.
       C.  Construction Grants
                                                                              •   '  .  -~

       Construction Grants are awarded to local municipalities to fund construction of waste
water treatment plants.  It is EPA policy to close out construction grants promptly; funds not
needed  on one project can be deobligated and  reallotted to finance  other treatment works
projects. The Construction Grants Program is also different from other EPA programs because
this is a delegated program. EPA is responsible for overall program management but most of
the day-to-day administrative duties have been delegated to the State water pollution control
agencies or the US Army Corps of Engineers. EPA Regional Offices retain some project-related
decision authorities that are not legally delegable.  •

       Eligible activities funded by construction grants can include facility plans (Step 1), plans
and specifications (Step 2), and the building of a treatment plant (Step 3). A full listing of the
different types of construction grants is included in Appendix C.
                     KEY COMPLETION/CLOSEOUr MILESTONES
         Physical Completion: When the scope of the work is completed.  For Steps 1 & 2,
         project completion and physical completion are synonymous. (For steps 2+3, 3, 7 £ 9
         project completion, physical completion, and construction completion are synonymous.)
         Initiation of Operations (IO):  When the wastewater treatment works becomes capable of
         operating for the purposes planned, designed and built.  (Steps 3, 2+3,7 & 9)
         Project Performance Certification: One year after IO, the grantee certifies that the
         treatment facility is meeting project performance standards. (Steps 3, 2+3,7 & 9)
         Please note that the project cannot be sent to audit until the certification is received.

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                                           11
         Administration Completion: All.administrative aspects of the project have been
         completed, final payment has been requested, eligible costs have been determined, all
         grant conditions have been satisfied and the audit has been requested. Ail excess balances
         (unliquidated obligations) should be deobligated at this point.
         Audit:  Project is sent to the Office of Audit, Office of Inspector General (OIG) for audit.
         Audit Resolution:  Audit resolution occurs when one of the following actions have
         been performed by the Regional Office:
• o

 o
               Issuance of a final determination letter to the recipient.
Submission of a valid response to the OIG
recommendations contained in the final audit report.
                                                             all findings and
         Closeout: Ail administrative activities have been completed, including corrective actions
         and debt collection; the reviewing agency issues a standard doseout letter to the recipient
         and me grant project file is sent to record storage.
•••NOTE***

       The time between physical completion and administrative completion can be no less than 14
months because the project performance certification period is one year after physical completion and
initiation of operations. The project can not be sent to audit until after project certification. If the IG,
accepts the project for audit, it may be 24 months before the final audit report is issued.

PART IV: RECORD RETENTION REQUIREMENTS

    EPA's Uniform Administrative Requirements  for Giants and Cooperative Agreements to
State and Local  Governments (40 CFR Part 31.42) establishes minimum records retention
requirements for all assistance recipients.  In general,  a recipient must retain all financial
records, supporting documents, accounting books and other evidence of assisted activities for
three yean from the date of the final Financial Status Report submission. If any litigation, claim.
or audit is started before the expiration of the three year period, the recipient must maintain all
appropriate records until these actions are completed and  all issues resolved.  The retention
period starts on the day the recipient submits its final Financial Status Report  A recipient may
always choose to implement stricter or longer retention periods to meet their own needs.  For
construction grants,  the retention period starts the day the grantee submits the final payment
request. For the SRF Program, official records include  copies of the State/EPA agreements.
SRF Intended Use Plans, SRF Operating Agreements, SRF Annual Reports, and SRF Program
Evaluation Reports.  Only the grant agreement can be retired after grant closeout.  All other
documents must be retained for Program Management purposes.

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                '                         12
       Superfund Assistance Agrtemtnts

       *     For reciptents'records, the length of retention is 10 yean from the date
       of submission of the final FSR (unless otherwise directed by the award official).

       *     For EPA's records, the retention period is 30 yean after closeout of the
       assistance agreement.                                                    .    .

       Construction Assistance Agreements

       *     For recipients, the retention period is 3 years from the date of the final payment
       request                         .                        .

       *     For EPA's records, the retention period is 20 years from the date of submission
       of the final payment request.

       AIX Other Assistance Agrtemtnts

       *     For recipients,  the length of retention is 3 yean from the date  of
       submission of the final FSR.          ,                      .        .  ,

       *     For EPA's records, the retention period is 7 yean after closeout of the assistance
       agreement.
PART V:  AUDIT RESOLUTION AND DISPUTES

       A.    Audit Resolution - General Information

    EPA Order 2750.2A (Management of EPA Audit Report, ^ .d Followup Actions) states that
audit resolution must occur within ISO days of the final audit report issuance. Resolving audit
findings, issues or exceptions is a multi-step process involving many different offices. Audits
which cannot be resolved at the Regional or Headquarters level between the OIG and the Audit
. Action Official are referred to EPA's Audit Resolution Board.

   EPA  relies primarily on Single Audits of recipients carried out in accordance with the
requirements of the Single Audit Act and Federal Audit policy expressed in OMB Circulars A-
 128 and A-133.  Consistent with that policy, most  assistance agreements will JJQI receive
individual final audits.  A final audit is usually not a prerequisite for closeout.

       All Superfund Cooperative Agreements are subject to audit by the Office of Inspector
General. Projects may be audited prior to or even after closeout. The Program Office is usually
 responsible for requesting  an audit.  Closeout of all completed phases of response activities
 should be undertaken regardless of whether or not an audit is actually performed.  However, any

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                                          13

 findings/issues arising from an audit must be resolved before the cooperative agreement can be
 officially closed out.

    .   For Construction Grants, an audit request is sent to the appropriate Divisional Inspector
 General for Audit who determines if an audit will be conducted. For more detailed information
 on the steps involved in this process, refer to the appropriate Construction Grant Program Audit
 and Closeout Procedures.

    The OIG will normally audit construction grants according to criteria published in the OIG
 Manual,  Chapter 102 - Audit Planning Appendix 6,  Issued October 1984 and revised June 5
 1990.                .;        -

       If the OIG (EPA, contract CPA  firm, State Auditor, or GAO) conducts an audit, the
 project cannot be closed out until the final audit is completed, all findings and recommendations
 are resolved, corrective actions are completed, and any outstanding debts are collected.

       B.     Disputes                                 •    ..

       Definition

       Disputes are petitions of review filed  by  recipients asking EPA to reconsider decisions
 affecting assistance agreements.

       Many (but not all) disputes between recipients and EPA concern the eligibility  or
 aUowability of a project or portions of a project for reimbursement by EPA under the provisions
 of the assistance agreement, usually resulting from an audit or other determination by EPA's
 award official.

       Authority

       Disagreements between EPA and applicants/recipients should be resolved at the lowest
possible level by the EPA Project Officer and  the appropriate  Grants Specialist having the
authority to resolve the dispute.

        The  applicable regulations depend  on the  award  date of the grant agreement or
amendment.  If die award, date is before October 1, 1988, 40 CFR Pan 30 Subpart L applies.
If the award date is after October 1, 1988, 40 CFR Pan 31 Subpart F applies. Disputants may
 not ask EPA to review the following Agency actions:
       1. Denials of requests for a deviation under 40 CFR Pan 30, Subpart J;

       2. Bid protest decisions under 40 CFR Pans 31/33;

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                                          14

       3. National Environmental Policy Act decisions under 40 CFR Part 6;

       -4. Advanced wastewater treatment decisions of the Administrator;

       S. Policy decisions of the EPA Audit Resolution Board; and

       6. Debarment/suspension actions taken by the Director, Grants Adrr justration Division.


       Role of the Disputes Decision Official

       The Award Official may act as the Disputes Decision Official (DDO) or appoint a senior
EPA Official who is knowledgeable about EPA's assistance programs as the DDO.  The DDO
reviews and issues the final decision for all disputes. If an applicant or recipient disagrees with
the Regional DDO's decision, the disputant may file a request for a review with the Regional
Administrator (RA), who will in turn issue a written determination.

       If an applicant or recipient disagrees with a RA's decision,  they may request a review
by the appropriate Assistant Administrator (AA). The AA in the appropriate media Program.
Office has the authority to review appeals of RA decisions.  The AA will analyze the request
to determine if it warrants further review.  The AA will then notify the recipient in  writing off
their decision to review or  not to review the disputed action. In the limited number of cases
which  are reviewed, the AA will  also provide the results of the  review at this time.  The
recipient may request reconsideration of any decision of the RA or  AA.

       Impact of Disputes on
       Disputes can be very resource intensive and will bring the audit decision-making process
under closer scrutiny.  It is for this reason that the Audit Action Official should resolve all audit
fihdir^s and avoid incomplete final determination letters (see Pan V Audit Section). Inadequate
or incomplete audit resolution can  increase the number of disputes filed by recipients.
Unresolved disputes further delay closeout of the award until the action or claim is settled.

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                                                   15
                                              APPENDIX A
            LISTING OF EXISTING EPA CLOSEOUT REGULATIONS, POLICIES, AND RELATED
            GUIDANCE
            (1)    40 CFR Part 4 (Uniform Relocation Assistance), or 49 CFR Part 24 if applicable;
            (2)    40 CFR Fait 30 (for non-State and local government recipients);
            (3)    40 CFR Part 31 (for State and local governments);
           (4)    40 CFR Part 32 (Debarment and Suspension);
           (5)   40 CFR Part 33 (Procurement for non-State and local government recipients);
           (6)   40 CFR Part 34 (Restriction on Lobbying, interim final rule);
           (7)   40 CFR Part 35 (State and Local Assistance);
           (8)    40 CFR Pan 40 (Research and Demonstration Grants);
           (9)    40 CFR Parts 45 and 46 (Training and Fellowship grants);
 .^       (10)   OMB Circulars  A-102 (Grants  and Cooperative  Agreements  to  State and  Local
••             Governments) and A-128 (Audits of State and Local Governments);
          (11)  OMB Circulars A-l 10 (Grants and Cooperative Agreements with Institutions of Higher
                Education, Hospitals and Other Nonprofit Organizations), A-133 (Audits of Institutions
                of Higher Education and Other Nonprofit Institutions), and A-21 (Cost Principles for
                Universities;                         .                                .
          (12)   OMB  Circulars A-87 (Cost Principles for State  and  Local Governments) and A-122
                (Cost Principles for Nonprofit Organizations);
          (13)   Policy on Performance-Based Assistance (EPA  policy memorandum dated May 31,
                1985);
          (14)   Comptroller Policy Announcement No. 88-09 (Disposition of Unobligated Balance of
                Assistance Awards);
         (15)   EPA Directive 2750 (Management of EPA Audit Reports and Follow-up Actions).
         (16)  Chapter 40 of EPA's Assistance  Administration Manual

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                  '        '   "          16        '           .-'••_

(17)   Construction grants Program For Municipal Wastewater Treatment Works Handbook
      Procedures


(18)   CG-250, Managing Construction Projects Student Manual' and


(19)   The Strategy Paper for Closing Out the Construction r,n.nt p^ram dated to/90 and
      formally released January, 1991.                                        ?.

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                                         17

                                   APPENDIX B

   GICS DATA ELEMENTS FOR CLOSING OUT NON-CONSTRUCTION GRANTS

       GICS contains a series of data elements used to track grant closeout.  This appendix
       provides definitions and applicable codes for the most commonly used data elements.
       Note:  not all closeout data elements are available in RAGDS, FADS, or LAMS.  It is
       GAD's intention to revise the GICS Data Dictionary and appropriate screens in the
       Automated Grants Document Systems to make all standard closeout data elements
       universally available.


COMP-LTR-SENT-CODE/DATE

       A code indicating the most recent completion/follow-up letter  sent to the  recipient

       For purposes of Closebut the following codes are applicable:

       A     Pre-completion reminder mailed
       B     Completion reminder mailed
       C     Reminders) to signatory of agreement
       D     Warning to President/chief officer of recipient  organization
       X     Final determination recommendation prepared by Grants Operations Branch and
             forwarded for required approvals/concurrences


FINANCIAL-STATUS-CODE/DATE

       A code  indicating the status of the final financial status report (report of expenditures)
       submitted by the recipient The dite related to this code is contained in Final Financial
       Status Report Date (Ref No  M5-A, Financial-Status-Date).

       For purposes of Closeout the following codes are applicable:

       DE   Financial status report approved; FMC, Las Vegas requested to deobligate
       DR   Financial status report approved; EPA owes recipient; Recipient advised to draw
             down
       NA   Not applicable to this project/budget period
       OU   Financial status report approved; Recipient owes EPA; Requested  to submit
             refund or adjust letter of credit              .
       FU    Financial status report approved; Recipient has paid EPA
       RA   Received an acceptable/approved report; Zero unobligated balance
       RP    Received report/acceptability to be determined
       RU   Received an unacceptable report; Follow-up to recipient initiated

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   '  •     -                ••    .         -is           .                 ;

PERS-PROPERTY-CODE/DATE

       A code indicating the status of the personal property or equipment inventory purchased
       under a grant. The date related to this code is contained in Personal Property Inventory
       Date (Ref No L2-A, Pers-Property-Date).

       For purposes of Closeout the following codes are applicable:

       DI    Disposition instructions issued; further action required
       DW   Disposition instructions being withheld by Grants  Administration Staff
       DX   Disposition instructions executed/completed; no further property action required
       NA   Not applicable to this project
       PD   Project Officer provided disposition recommendation
      . PR   Project Officer received report; Grants Administration  staff awaiting disposition
      RF   Received and forwarded to Project Officer
      RN   Received negative report
      RP   Received positive report
REAL-PROPERTY-CODE/DATE                                      :

      A code indicating the status of the real property inventory purchased under a grant. The
      date related to this code  is contained in Real Piopeity Inventory Date.(Ref No L7-A,
      Real-Property-Date).

      For purposes of Closeout the following codes are applicable:                   .
                                                                                f
      DI    Disposition instructions issued;  further action required
      DW   Disposition instructions bew^ withheld
      DX   Disposition instructions executed/completed; no further property action required
      NA   Not applicable to this project
      PD   Project Officer provided disposition recommendation
      PR   Project Officer received report; awaiting disposition recommendation
      RF   Received and forwarded to Project Officer
      RN   Received negative report
      RP   Received positive report
INVENTION-CODE/DATE

       A code indicating the status of the invention report.  The date related to this code is
       contained in Invention Report Status Date.

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       For purposes of Closeout the following codes are applicable:

       NA   Not applicable to this project/budget period
       RF   Received and forwarded to Office of General Counsel
       RN   Received negative report
       RF   Received positive report
 nNAL-REPORT-CODE/DATE

       A code indicating the status of the final report.   The dale  related to this code is
       contained in Final Report Status Date (Ref No L8-A, Final-Report-Date).

       For purposes of Closeout the following codes are applicable:

       AA    Report approved; confirmation in official project file;  EPA Report Publication
              Number assigned and recorded in  Report Publication Number (Ref No 40-A,
              Publication-No)
       NA    Not applicable to this project
       PR    Project  Officer  received report; awaiting  peer  review/approval; (Consider
              applicability of entering code  "PR" in Action Step Code (Ref No  23-A,
              Action-Code) and  date in Action Step Date (Ref No 24-A, Action-Date))
-       RF    Received and forwarded to Project Officer
       RU    Received an unacceptable report; follow-up to recipient  initiated
AUDIT-REQUEST-DATE

       The  date of the request for a financial audit of a  non-Construction grant  Use of this
       element is limited to grants meeting certain select cnu-ria and is not applicable to Single
       Audits. For Regions using Audit Request Code (Audit-Request-Code, Ref No N8-A),
       this is the date related to the code contained in that element

             Positions 1-2 - Year
                •    3-4 -Month
                "    5-6-Day

AUDITS-RESULTS-CODE

       A  code indicating  the  status of the  completion of  the   financial audit  of a
       non-Construction grant This element is not used for Single Audits.  The date related
       to mis code is contained in Audit Completion Date (Ref No N9-A, Audit-Results-Date).

       For purposes of Closeout the following codes are applicable:

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                                         20

       CA   Cost analysis
       FA   Final audit
       IA    Interim audit
       RN   Received notice of cancellation of audit request
       RP   Received audit report
FENAL-AUDIT-DATE ^

      The date a final audit is resolved satisfactorily.

             Positions 1-2 - Year
                "   3-4.- Month
                '   5-6-Day

ACTION-CODE/DATE

      A code which identifies the current status and/or disposition of a prospective project,
      application, or active or completed  project for which financial assistance has been
      requested or given.  Codes are from the GICS-ACTION-CODE-TABLE [not  GICS-
      ACTION-CODE-NON-TABLE] The date related to this code is contained in Action
      Step Date.

      For purposes of Closeout the following codes are applicable:

      FA    Completion of all administrative work connected with an  assistance agreement
             by the administering office.  Applicable only to WWT Construction and State
             Revolving Fund  (Project level).

      FC    Completed assistance agreement closed erf  For EPA  assistance agreements,
             letter issued by EPA to the  recipient closing out the agreement   .

      FD    Project completion:  For assistance programs administered in Headquarters, the
             award official (Chief, Grants Operations Branch) has issued final determination
             to the recipient.

      ER    Project dose-out complete except for approval of final project report and final
             disposition of property,  if any.   Applicable  only  to  assistance  programs
             administered in Headquarters.

      FT    Assistance terminated by EPA before completion. Termination letter sent from
             Grants Operations Branch or appropriate Regional grants administration staff to
             the  recipient.

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                                       21                      '

         GICS SCREENS FOR CLOSING OUT CONSTRUCTION GRANTS

      Qoseout milestones for construction grants are found on a number of different screens
      inGICS. Screens include:

      *     Post Award/Targeting (PTN) which tracks the completion of certain activities
            such as WWT Start, Initiation of Operation, development of the O&M Manual,
            Initiation of Administrative Completion.                            .  .
                                                                 n.
      *     Project Completion (PCN)  which  tracks a grant's progress through  Physical
            Completion and Administrative Completion.

      *     Payment Data (PDN) which tracks  cumulative payment data.

Because Construction Grants is a delegated program, data entry can take place at the delegated
State or in the Regional office.  Regional procedures vary greatly.

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                             •'    .        22
                                     APPENDIX C                   '           *-•

      of Construction Grant Awards

Step 1: Development of a facilities plan.  No  new awards were issued after 12/29/81.  It is
EPA policy that all Step  1 projects should have  been completed by 9/30/85.

Step 2: Preparation of plans and specifications for a treatment works.  No new awards were
issued after 12/29/81.  It is EPA policy that all step 2 projects should have been completed by
9/30/85.

Step 3: Building of treatment works and related services and supplies.

Step 2-4-3:   Combination design and building of a treatment works and building related
services and supplies.

Step 7:  Combination design and building of a treatment works wherein a grantee awards a.
single contract for designing and building a treatment works.

Step 9: Construction of a State training wastewater facility combining design and-building for;
operations and maintenance personnel.
                         «US COVtXMMINT HUNTING O"l« :i»3-"?-3!B-*591''

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