yi?v
United States Administration and ^PA 202-B-95-001
Environmental Protection Resources Management o^ 1995
Agency (3903F)
ERA Managing Your Financial
Assistance Agreement
Project Officer Responsibilities
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TABLE OF CONTENTS
INTRODUCTION
MODULE I
MODULE II
MODULE V
MODULE VI
BACKGROUND
REQUIREMENTS GOVERNING
ASSISTANCE AGREEMENTS
MODULE III PREAPPLICATION/APPLICATION PHASE
MODULE IV AWARD PHASE
PROJECT ADMINISTRATION AND
MANAGEMENT PHASE
CLOSEOUT PHASE
MODULE VII AUDIT
MODULE VIII INTERAGENCY AGREEMENTS
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
FEDERAL GRANT AND COOPERATIVE
AGREEMENT ACT
POLICY FOR DISTINGUISHING BETWEEN
ASSISTANCE AND ACQUISITION
EPA INVOLVEMENT IN GRANTEE
PERSONNEL AND CONTRACTOR SELECTION
UNDER GRANTS AND COOPERATIVE
AGREEMENTS
40 CFR PART 30, "GRANTS AND
AGREEMENTS WITH INSTITUTIONS OF
HIGHER EDUCATION, HOSPITALS, AND
OTHER NON-PROFIT ORGANIZATIONS"
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APPENDIX E
APPENDIX F
APPENDIX G
APPENDIX H
APPENDIX I
APPENDIX J
APPENDIX K
APPENDIX L
40 CFR PART 31, "UNIFORM
ADMINISTRATIVE REQUIREMENTS FOR
GRANTS AND COOPERATIVE
AGREEMENTS TO STATE AND LOCAL
GOVERNMENTS"
LIST OF EPA ASSISTANCE PROGRAMS
(CFDA Number, Title, Statutory Authority,
GICS Program Code, and Delegation Of
Authority Number)
GUIDE: "DELEGATIONS OF AUTHORITY --
WHAT MANAGERS NEED TO KNOW"
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"
EPA ORDER 5730.1, "POLICY AND
PROCEDURES FOR FUNDING ASSISTANCE
AGREEMENTS
CARRYOVER POLICY (COMPTROLLER
POLICY ANNOUNCEMENT 88-09)
POLICY ON PERFORMANCE BASED
ASSISTANCE
APPENDIX M USE OF DISADVANTAGED BUSINESS
ENTERPRISES (DBE)
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APPENDIX N
APPENDIX O
POLICY ON THE TIMELY AWARD OF
ASSISTANCE FUNDS FOR CONTINUING
ENVIRONMENTAL PROGRAMS
STATE GRANT GUIDANCE, "INTEGRATION
OF POLLUTION PREVENTION"
APPENDIX P SF 424, "APPLICATION FORM"
APPENDIX Q OFFICIAL PROJECT AND GMO FILES
APPENDIX R CLOSEOUT POLICY FOR ASSISTANCE
AGREEMENTS
APPENDIX S EPA ORDER 2200.4, "REVIEW PROCESS FOR
SCIENTIFIC, INFORMATIONAL AND
EDUCATIONAL DOCUMENTS"
APPENDIX T SAMPLE INTERAGENCY AGREEMENT
SUBJECT INDEX
GLOSSARY
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ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
INTRODUCTION
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WHY AN ASSISTANCE PROJECT
OFFICERS COURSE?
• TRAINING IDENTIFIED AS A
WEAKNESS
• ROLES AND RESPONSIBILITIES
NOT IDENTIFIED ELSEWHERE
• GROUNDWORK FOR PO
CERTIFICATION
VIEWGRAPH # 1
TITLE: Why an Assistance Project Officers Course?
KEY POINTS:
A large part of EPA's mission is accomplished by awarding
extramural funds to other organizations to conduct environmental
programs and or projects, approximately $3.5 Billion through
assistance agreements.
The Project Officer (PO) plays a key role in assuring the proper
expenditure of these funds.
• EPA (and other Federal agencies) award funds through one of two
methods -- "acquisition" or "assistance." The basic difference
between acquisition and assistance is the relationship between the
parties. If an activity is funded to meet an internal EPA need e.g., a
specific report to Congress, purchase of furnishings for EPA staff,
then an acquisition relationship exists and EPA's direct
procurement requirements (e.g., the Federal Acquisition
Regulations) apply. If the activity is funded to primarily benefit
someone other than the Federal government, e.g., build a
wastewater treatment plant, then an assistance relationship exists
and EPA's rules which apply to assistance programs apply. The
latter is the subject of this course.
Because of Congressional Hearings, inquiries on contract
management, and recent audits, the area of assistance
management is receiving increased scrutiny from EPA
management.
Several assessments identified PO training as one of the highest
needs in the assistance management area.
10/1/95 lntro1
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VIEWGRAPH # 1 (Continued)
TITLE: Why an Assistance Project Officers Course?
KEY POINTS:
This course identifies the administrative responsibilities of the
Project Officers (PO), Grants Management Offices (GMO),
Financial Management Offices (FMO), and other players involved
in managing assistance agreements.
This course will give you:
- A framework for the POs1 responsibilities;
- An awareness of the interactions between the POs and others;
- The cradle-to-grave responsibilities of POs; and a
- Basis for PO Certification.
This course will not provide specific PO programmatic
requirements. That is a responsibility of the National Program
Manager (NPM) for each program. Some NPMs (e.g., Office of
Water, §106 grant program) have developed training on the
programmatic aspects of their POs1 responsibilities.
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KEY PERSONNEL
• APPROVAL OFFICIAL
• SENIOR RESOURCE OFFICIAL
• GRANTS MANAGEMENT OFFICE
• AWARD OFFICIAL
• PROJECT OFFICER
VIEWGRAPH #2
TITLE: Key Personnel
KEY POINTS:
Approval Official
The Approval Official is an EPA official delegated the authority
(see Module II, pages 2.3 - 2.4) to approve or reject an
application and to approve the technical and programmatic
terms and conditions on proposed assistance projects.
Senior Resource Official (SRO)
The SRO is a Senior Executive Service manager who reports
directly to the Assistant, Associate, or Regional Administrator.
SROs are typically the Deputy Assistant Administrators and the
Assistant Regional Administrators. The SRO is accountable for
that Office's ethical, effective resource management, including
acquisition, assistance, and programmatic financial
management.
Grants Management Office (GMO)
The GMO is responsible for full "cradle to grave" management of
financial assistance agreements and interagency agreements.
Award Official
The Award Official is the EPA official with the delegated
authority (see Module II, pages 2.3 and 2.4) to execute (sign)
assistance agreements and to take other actions authorized by
40 CFR Chapter I, Subchapter A and by EPA Orders.
Project Officer (PO)
The PO is the EPA official designated in the assistance
agreement as EPA's program contact with the recipient.
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ROLE OF THE PROJECT OFFICER
EXPERT ON PROGRAMMATIC
ISSUES
• HELP ADMINISTER THE
AGREEMENT
VIEWGRAPH #3
TITLE: Role of the Project Officer
KEY POINTS:
Working together as partners. EPA's Program and management
officials approve, award, and manage assistance agreements.
The program is responsible for ensuring their assistance
agreements meet scientific, technical, and programmatic
requirements; management is responsible for the "cradle to grave"
management of EPA assistance agreements and interagency
agreements.
The Project Officer (PO) is the key program staff person on an
assistance agreement, just as the Grants Management Specialist
in the Grants Management Office (GMO) is the key management
staff person on an assistance agreement.
The PO and the GMO each have a role to ensure the proper
stewardship of Federal funds. Proper stewardship of Federal
funds depends on the combined efforts of the PO to determine the
appropriateness and technical merit of proposals, as well as
monitoring and overseeing projects; and the GMO in performing
required administrative tasks.
The Award Official must be assured from both the programmatic
and administrative perspectives of the appropriateness of decisions
concerning applications and awards. The Award Official relies on
the advice, guidance, and recommendations of both the program
(primarily through the PO) and GMO.
The PO is critical to the successful completion of work performed
under an assistance agreement or interagency agreement. Many
decisions and recommendations, including some administrative
decisions, can be made only by persons with programmatic
expertise. Input from the PO is required in a number of areas,
including determination of the adequacy and technical soundness of
the proposal, providing oversight, and certifying the quality and
acceptability of a recipient's programmatic performance.
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MODULE I
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ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE I
BACKGROUND
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OVERVIEW
FEDERAL GRANT AND
COOPERATIVE AGREEMENT
ACT OF 1977
COMPETITION IN ASSISTANCE
AGREEMENTS
CONFLICTS OF INTEREST
VIEWGRAPH#1
TITLE: Overview revised 6/23/94
KEY POINTS:
In this module we will discuss the following:
The Federal Grant and Cooperative Agreement Act of 1977.
- The difference between a contract and an assistance
agreement;
- The types of assistance agreements (grants and cooperative
agreements) and the difference between a grant and a
cooperative agreement;
- When a contract, grant, cooperative agreement should/must be
used; and
- The Project Officer's (PO)/Program's role in making the decision
of which instrument to use;
Competition in the selection of recipients.
- When it is required; and
- The Office of Research and Development requirements for
research awards.
• Conflicts of interest.
- The requirements on Federal employees;
- The restrictions on EPA involvement in recipient decisions; and
- The requirements on recipients.
10/1/95 '-1
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FEDERAL GRANT AND COOPERATIVE
AGREEMENT ACT OF 1977
• DISTINGUISHES BETWEEN
PROCUREMENT AND ASSISTANCE
• ESTABLISHES DECISION CRITERIA
• DISTINGUISHES BETWEEN GRANTS
AND COOPERATIVE AGREEMENTS
VIEWGRAPH # 2
TITLE: Federal Grant And Cooperative Agreement
Act of 1977
KEY POINTS:
Various Federal statutes authorize and/or direct EPA to carry out
specific environmental activities. These statutes may specify
whether the activities may be accomplished in-house (using EPA
staff) or by funding outside parties. The Federal government
awards extramural funding in one of two ways -- either through a
procurement contract (acquisition) or through a grant or cooperative
agreement (assistance).
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.
10/1/95 '-2
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VIEWGRAPH # 2 (continued)
TITLE: Federal Grant And Cooperative Agreement
Act of 1977
KEY POINTS:
The Act distinguishes between procurement (acquisition) and
assistance, based on the principle purpose of the relationship
between the parties. If the principle purpose of the activity being
funded (i.e., "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 (e.g., State, local government, university), then
an assistance agreement may be used.
It is important to note that the Act does not expand an Agency's
authority to award assistance agreements. EPA has no inherent
authority to award assistance agreements; such authority must be
found in EPA's statutes and does not derive from the Federal Grant
and Cooperative Agreement Act. On the other hand, unless
legislatively prohibited, every Agency has inherent authority to enter
into contracts related to the Agency's mission.
Whether to use a contract or an assistance agreement is a
decision which should be made in the planning process, and
certainly before the Program develops any annual guidance or
requests solicitations. Offices and laboratories 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 or laboratory should
contact the responsible GMO/Award Official for assistance.
Please do not wait until the award package is ready to send to the
GMO [or SRO (if appropriate)] to justify an assistance relationship.
If the Approval Official or SRO has a problem justifying an
assistance relationship, the GMO and auditors will also have a
problem.
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WHO DOES WHAT?
APPROVAL OFFICIAL
SENIOR RESOURCE OFFICIAL
GRANTS MANAGEMENT OFFICE
AWARD OFFICIAL
PROJECT OFFICER
VIEWGRAPH #3
TITLE: Who Does What?
KEY POINTS:
The responsibility to determine whether to award a contract or
an assistance agreement is shared between the program and
GMO staffs.
Approval Official
Each Approval Official must determine whether a proposed
relationship is one of acquisition or assistance. In making this
determination, the Approval Official will use the criteria set
forth in the "Policy for Distinguishing Between Acquisition and
Assistance." (see Appendix B).
• In those limited occasions where the Approval Official has the
responsibility of overseeing an award originating in another
office, the Approval Official's responsibility is limited to
ensuring that the originating Office determines an assistance
relationship exists based on the criteria set forth in the policy.
The Decision Memorandum (see Module 4) must justify the
use of an assistance instrument based on the criteria in the
policy.
Senior Resource Official:
The Senior Resource Official will concur in the Program's
decision to use an assistance agreement when total project
costs are expected to be $5 million or more for continuing
program grants and over $1 million for project grants. In
Headquarters, the SRO review will take place before the
award package is sent to the GMO, in the Regions the SRO
review may take place after the package is sent to the GMO.
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VIEWGRAPH #3 (Continued)
TITLE: Who Does What?
KEY POINTS:
Grants Management Office
The GMO will review the determination of the office or laboratory
and decide whether to concur. The GMO will consult with the
Office of General Counsel, Grants and Intergovernmental Division
(or Regional Counsel) if necessary.
The GMO will return all completed assistance application
packages that are acquisition activities to the office or
laboratory and say why it cannot award the project as an
assistance project.
Award Official
The Award Official ensures all technical, legal, and administrative
evaluations have been made and that the proposed agreement is
"awardable." The Award Official is responsible for making the final
determination whether the award should be an assistance
agreement. This determination is made when the Award Official
signs the agreement and makes the offer to the applicant.
Project Officer
More than likely, the PO will be responsible for preparing the
documentation supporting the use of an assistance
agreement. Therefore, POs need to fully understand the
requirements of the Federal Grant and Cooperative Agreement
Act and the EPA Order on acquisition vs assistance.
.r
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ACQUISITION VS ASSISTANCE
ACQUISITION
vs.
ASSISTANCE
VIEWGRAPH#4
TITLE: Acquisition vs. Assistance
KEY POINTS:
The critical determinant when selecting the appropriate award instrument
is the principal purpose of the relationship.
Except where the authorizing legislation was enacted after the FGCAA
and the authorizing legislation specifically states it supersedes the
FGCAA or other provisions of law, you must use the criteria in the FGCAA
to determine the appropriate award instrument. In cases where legislation
specifically states that it supersedes the FGCAA, the award instrument
specified in the authorizing legislation must be used.
- 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 a recipient to support or stimulate activities that are
not principally for the direct benefit or use of the Federal
Government, and the award is authorized by Federal statute, then an
assistance 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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IDENTIFYING PRINCIPAL PURPOSE
• DIRECT BENEFIT OR USE
- INCIDENTAL USE OR BENEFIT
• SUPPORT OR STIMULATION
• TYPE OF ORGANIZATION NOT A
FACTOR, e.g., NON-PROFIT VS
PROFIT
VIEWGRAPH # 5
TITLE: Identifying Principal Purpose
KEY POINTS:
Direct Benefit or Use/Support or Stimulation
The Federal Grant and Cooperative Agreement Act requires that
to use an assistance agreement, the activity must accomplish a
public purpose of support or stimulation and must not be
principally for the direct benefit or use of the Federal government.
These tests must be applied to the original agreement and
when any new work/tasks/activities are added to the
agreement.
• The program office plays the key role in determining whether the
two tests are met.
Direct Benefit or Use:
- The originating office must determine whether the Federal
government is the direct beneficiary or user of the activity. If
EPA provides the specifications for the project; 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 EPA expects to derive
some incidental use or benefit from funded activities. Such
incidental use or benefit does not preclude an award of
assistance when the principal purpose is public support or
stimulation. For such cases, an assistance vehicle may still
appropriate.
10/1/95 '-7
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VIEWGRAPH # 5 (Continued)
TITLE: Identifying Principal Purpose
KEY POINTS:
Support or Stimulation:
- To determine "public purpose of support or stimulation", the
program 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
EPA initiated the proposed project. The applicant must
perform the project for its own purposes and EPA is
merely supporting the project with financial or other
assistance.
Type of Organization Not A Factor:
The type of organization does not drive the decision to use
one instrument or the other.
A non-profit organization does not automatically qualify for an
assistance relationship.
Similarly, a profit making organization does not automatically
reflect an acquisition relationship (although a profit making
organization may be an assistance recipient only if the
statutory authority so provides).
Also, research does not always have to funded by an
assistance agreement. Research can be funded by contract
and universities can receive grants or contracts, as well as
cooperative agreements.
10/1/95 '-8
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CONFERENCES
• DEPENDS ON PURPOSE
• EXCEPTION: ASSOCIATIONS
OF STATE OFFICIALS
VIEWGRAPH #6
TITLE: Conferences
KEY POINTS:
Conferences may be funded with an assistance agreement if
the principal purpose is not for the direct benefit of the
Government.
As a general rule, an assistance agreement may not be used
to support a conference or other services if the principal
purpose is to provide advice, recommendations, or other
information for EPA's direct use in developing or changing
guidance, regulations, etc. For example, an office or
laboratory 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 or laboratory
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 officials who implement EPA programs. An
assistance agreement may 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
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 is to
support the association in helping its State members
participate in developing the policies that they will carry out.
(See Appendix B, page 9 for restrictions on these types of
conferences.)
10/1/95 '-9
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GRANTS VS
COOPERATIVE
AGREEMENTS
SUBSTANTIAL FEDERAL INVOLVEMENT
vs.
NO SUBSTANTIAL FEDERAL
INVOLVEMENT
'IEWGRAPH #7
TTLE: Grants vs Cooperative Agreements
:EY POINTS:
The legal instruments for providing assistance to the recipient are
either grants or cooperative agreements.
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."
10/1/95 '-10
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VIEWGRAPH #7 (continued)
TITLE: Grants vs Cooperative Agreements
KEY POINTS:
• Substantial involvement Substantial involvement must be fully
explained in the agreement, either in the Workplan/Narrative or in a
Term & Condition. Some examples of substantial involvement are:
- EPA must approve one phase of the project before the recipient
may proceed to the next phase.
- EPA 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 proposed contracts;
- EPA will participate (technically assist) in some of the project
activities;
- EPA prior review or approval of substantial portions of proposed
contracts;
- Joint operational involvement/participation and/or collaboration;
- Intense monitoring by EPA; and
- EPA collaboration on the Work Plan\Narrative, organizational
structure, staffing, mode of operation, or other management
process.
It is important to note that the administrative requirements are the
same for both grants and cooperative agreements. 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 project results/products after completion of the work; and
- Ensure recipient compliance with all applicable statutes,
regulations, policies and all requirements in the agreement, e.g.,
on-site reviews (semi-annual, annual); and
- Review progress reports.
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FAILURE TO COMPLY
GOOD FAITH EFFORTS TO
DETERMINE
TERMINATION, ANNULMENT,
RATIFICATION
VIEWGRAPH #8
TITLE: Failure to Comply
KEY POINTS:
Individuals discovering situations where an assistance
agreement was awarded when a contract was required, are
directed to consult with representatives from the EPA
program office or laboratory, the Award Official, and the
Office of General Counsel to determine necessary actions.
It is EPA policy to allow completion of the assistance
agreement where good faith effort was made to
determine principal purpose in accordance with the
Federal Grant and Cooperative Agreement Act.
It is not EPA policy to terminate, annul, or require ratification
for these awards unless there were or will be serious
irregularities, e.g.. conflict of interest or intentional
misconduct.
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IN-KIND ASSISTANCE
WHEN CAN BE USED
WHAT CONDITIONS APPLY
VIEWGRAPH #9
TITLE: In-kind Assistance
KEY POINTS:
In addition to transferring money to an authorized assistance
recipient, EPA may use an assistance agreement to transfer
anything of value, such as equipment or services to a recipient.
If it is more efficient in terms of cost or time for EPA rather than the
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 an assistance
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.
To use in-kind assistance, the Program must comply with the
following conditions:
- Document the expected savings of cost or time;
- Ensure that all charges are to the grants object class category;
and
- Ensure that the in-kind assistance complies with the
requirements in 40 CFR Part 30 or 31, (e.g., it is allowable and
reasonable), and any program guidance.
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COMPETITION IN
ASSISTANCE AGREEMENTS
• ENCOURAGED BUT NOT REQUIRED
• MAY BE REQUIRED BY PROGRAM
OFFICES
VIEWGRAPH#10
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 they fund
the best proposals, e.g., Research and Development,
Environmental Education, and some training.
Programs should consider the nature of activities they fund and
decide whether to compete an award.
The Programs should justify in the Decision Memorandum (see
Module IV) their decisions not to compete an award.
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CONFLICTS OF INTEREST
• USING PUBLIC OFFICE FOR
PRIVATE GAIN
• PREFERENTIAL TREATMENT
• LOSING INDEPENDENCE OR
IMPARTIALITY OF DECISIONS
VIEWGRAPH#11
TITLE: Conflicts of Interest
KEY POINTS:
FEDERAL EMPLOYEE ETHICS STANDARDS
All circumstances that might result in a conflict of interest, or the
appearance of a conflict of interest, or any prejudices, biases, or
predispositions on the part of reviewers must be avoided.
Public service is a public trust. To ensure that every citizen can have
complete confidence in the integrity of the Federal Government, each
Federal employee must comply with certain fundamental principles of
ethical service. These principles 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).
This regulation contains 14 general principles which apply to Federal
employees. Some of these principles state that a Federal employee
may not:
- Use a public office for private gain;
- Give preferential treatment to any organization or person; or
- Lose independence or impartiality of action.
RESPONSIBLE OFFICIALS
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.
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1.15
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VIEWGRAPH #11 (Continued)
TITLE: Conflict of Interest
KEY POINTS:
Disciplinary action for violating 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 himself 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 interests 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 C.)
EPA personnel may participate in a panel to evaluate the qualifications
of potential 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
30.42 for universities and nonprofits and in 40 CFR 31.36(b)(3) for
States, local governments, and Indian Tribes.
10/1/95 '-16
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DOS AND DONTs
DO
• JUSTIFY ASSISTANCE VS ACQUISITION
• JUSTIFY NOT COMPETING AWARD
DO NOT
• USE ASSISTANCE FUNDS FOR EPA
TRAVEL
• ACCEPT GIFTS FROM RECIPIENTS
• USE ASSISTANCE TO FUND EPA
INTERNAL ACTIVITIES
VIEWGRAPH#12
TITLE: Dos and Don'ts
KEY POINTS:
The following are some of the basic "Dos and Don'ts" in the areas of
assistance versus acquisition; competition; and conflicts of interest.
Assistance vs Acquisition:
- DO NOT include EPA travel costs in an assistance agreement.
- DO NOT request an assistance agreement if the principle purpose
is for an EPA conference or to train EPA employees.
- DO NOT request an assistance agreement if the principle purpose
is to prepare EPA guidance or manuals.
- DO ensure that the justification for using an assistance agreement
is adequately documented in the Decision Memorandum.
Grant vs Cooperative Agreement:
- DO ensure that if you are recommending a Cooperative Agreement,
the Decision Memorandum includes the "substantial involvement"
which will take place during the project.
Competition:
- DO ensure that the reasons for not competing an award are
adequately documented and included in the Decision Memorandum.
Conflicts of Interest:
- DO contact your Deputy Ethics Officer if you have any questions or
concerns about this policy and its impact on a particular action.
10/1/95 '-17
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MODULE II
-------
ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE II
REQUIREMENTS GOVERNING
ASSISTANCE AGREEMENTS
-------
OVERVIEW
REQUIREMENTS GOVERNING
EPA ASSISTANCE PROGRAMS
HIERARCHY OF REQUIREMENTS
VIEWGRAPH # 1
TITLE: Overview
KEY POINTS:
EPA assistance programs are governed by requirements
which apply to all Federal agencies and requirements which
are specific to EPA programs. Even though the Grants
Management Office (GMO) has the overall responsibility for
ensuring that the administrative requirements are met, the
Program offices and laboratories are responsible for
implementing many of these requirements. Therefore, POs
must understand what the requirements are and should be
familiar with the source of these requirements.
This module describes the sources of requirements affecting
assistance programs — Federal statutes, Delegations of
Authority, Executive Orders, OMB Circulars, Federal
regulations, EPA Orders, and policies -- and which
requirements take precedence over the others.
10/1/95 2.1
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FEDERAL STATUTES
LEGAL BASIS FOR
PROGRAMS
ADMINISTRATIVE
REQUIREMENTS
VIEWGRAPH # 2
TITLE: Federal Statutes
KEY POINTS:
Federal statutes form the legal basis for all EPA assistance
programs and may establish administrative requirements for a
specific program.
Legal Basis for Programs
All EPA projects/programs must have a statutory basis before EPA
can legally fund them (see Module 1, page 1.3, and Appendix A,
Federal Grant and Cooperative Agreement Act, §7(a)j.
Appendix F contains a list of EPA's assistance programs along with
the Federal statute which authorizes that program.
If there is no statutory authority for an activity, EPA cannot
legally fund the activity. As we will discuss in Module 3, the
program's Decision Memorandum must contain the statutory
authority for making an award.
Source of Administrative Requirements
• Congress sometimes establishes administrative requirements
through legislation, e.g., Clean Air Act, EPA's Appropriations Act.
Sometimes these requirements are implemented through a
regulation, (e.g., Anti-Lobbying -- 40 CFR Part 34, and the Single
Audit Act -- 40 CFR Parts 30 &31), through an EPA Policy, (e.g., use
of recycled paper), or through a condition to the award, (e.g., Hotel
and Motel Fire Safety Act of 1990).
10/1/95 2.2
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DELEGATIONS OF AUTHORITY
• REQUIRED TO MAKE AWARD
• TWO SEPARATE DELEGATIONS:
- APPROVAL AUTHORITY
- AWARD AUTHORITY
VIEWGRAPH #3
TITLE: Delegations of Authority
KEY POINTS:
Delegation of Authority is a transfer of responsibility from the EPA
Administrator to senior management officials in Headquarters and
the Regions that allows those officials to exercise authority on
behalf of the Administrator (see Appendix G). A Delegation of
Authority is necessary if someone other than the Administrator
is to approve and sign the award.
There are two types of assistance Delegations -- Approval and
Award.
The Award Delegation of Authority (1-14) transfers the authority to
award an assistance agreement to the Regional Administrator
(Regional awards) and to the Grants Administration Division
Director (Headquarters awards). Delegation of Authority 1-11
transfers authority to award an IAG to the Regional Administrator
and the Director of Grants Administration Division.
The Approval Delegations of Authority transfer the authority to
approve an application for award. Each assistance program will
have a Delegation of Authority specific to that program.
• Each Delegation tells:
- What authority is being delegated and to whom,
- If the authority can be redelegated and to whom,
- Limitations on redelegation, and
- Additional references, e.g., regulations, policies, or other
Delegations which affect this particular Delegation.
10/1/95 2.3
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VIEWGRAPH #3 (Continued)
TITLE: Delegations of Authority
KEY POINTS:
All Delegations of Authority are contained in the Agency's Delegations
Manual. The manual is maintained by the Management & Organization
Division (M&O). POs should have a copy of the approval Delegation of
Authority which applies to the assistance agreements for which they are
responsible. Copies of the Delegations can be obtained from M&O.
REGIONAL AWARDS
Each Region will have a Regional Delegations Manual which will specify
who in the Region may act as the Approval and/or Award Official. In some
Regions the Regional Administrator retains all award authority, in others,
the award authority is redelegated.
HEADQUARTERS AWARDS
• The authority to make Headquarters awards is delegated from the Director
of Grants Administration Division to the Chiefs of the Grants Operation
Branches. In some cases, the award authority may be redelegated to
Associate Award Officials within the Grants Administration Division.
10/1/95 2.4
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EXECUTIVE ORDERS
BAD ACTORS
SOCIO-ECONOMIC
NEW FEDERALISM
LEVERAGING
ENVIRONMENTAL JUSTICE
VIEWGRAPH # 4
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.
"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 entities 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 publication).
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.
10/1/95 2.5
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VIEWGRAPH # 4 (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 recipients 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 all 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 Disadvantaged
Business Plan, which is discussed on page 2.24.
10/1/95 2.6
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VIEWGRAPH # 4 (Continued)
TITLE: Executive Orders
KEY POINTS:
NEW FEDERALISM
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
CFR Part 29.
LEVERAGING FEDERAL DOLLARS
Executive Order 12803, "Infrastructure Privatization", issued April
30,1992, promotes private investment in local infrastructure.
ENVIRONMENTAL JUSTICE
Executive Order 12989, "Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations,"
signed February 11,1994, focuses on the environmental and
human health conditions in minority and low-income communities.
The goal of of the Executive Order is to achieve environmental
justice through nondiscrimination in Federal programs, access to
public information on, and opportunity for public participation in,
matters relating to human health or the environment.
10/1/95 2.7
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OVERVIEW OF ADMINISTRATIVE REQUIREMENTS
TYPE OF RECIPIENT
STATE, LOCAL&
INDIAN TRIBES
UNIVERSITIES &
NONPROFITS
PROFIT MAKERS
STATE, LOCAL &
INDIAN TRIBES
UNIVERSITIES &
NONPROFITS
PROFIT MAKERS
STATE, LOCAL &
INDIAN TRIBES
UNIVERSITIES &
NONPROFITS
PROFIT MAKERS
STATE, LOCAL &
INDIAN TRIBES
UNIVERSITIES
NONPROFITS
PROFIT MAKERS
ACTIVITY
PROCUREMENT
ADMINISTRATION
AUDIT
COST PRINCIPLES
REGULATION/CIRCULAR
40CFRPART31/A-102
40CFRPART30/A-110
48CFRPART31/A-102
40CFRPART31/A-102
40CFRPART30/A-110
40 CFR PART 30
40CFRPART31/A-128
40CFRPART30/A-133
GOVERNMENT AUDITORS
40CFRPART31/A-87
40 CFR PART 30/A-21
40CFRPART30/A-122
48 CFR PART 31
VIEWGRAPH #5
TITLE: Overview of Administrative Requirements
KEY POINTS:
This slide is an overview of administrative requirements for
recipients by source of the administrative requirements and type of
recipient for each major area.
While the administrative requirements for assistance agreements
are basically the same for all types of recipients, there are
differences. This module will touch briefly on the source of the
requirements and the major provisions of each.
10/1/95
2.8
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OMB CIRCULARS/CFR
ADMINISTRATIVE 40 CFR
• A-102 Uniform Administrative Requirements for Part 31
Grants-ln-Ald to State and Local Governments
* A-110 Grants and Agreements with Institutions of Part 30
Higher Education. Hospitals, and Other
Non-Proflt Organizations
COST
• A-21 Cost Principles for Educational Institutions Part 30
• A-87 Cost Principles for State and Local Governments Part 31
• A-122 Cost Principles for Non-Proflt Organizations Part 30
AUDIT
• A-128 Audits of State and Local Governments Part 31
• A-133 Audits of Institutions of Higher Learning and Part 30
Other Non-Proflt Organizations
VIEWGRAPH #6
TITLE: OMB Circulars/CFR
KEY POINTS:
OMB Circulars are guidelines issued by the Office of Management and
Budget to 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.
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, revised November 29,1993, establishes
requirements for institutions of higher learning, hospitals, and other
non-profit organizations. This Circular is implemented in 40 CFR Part 30.
10/1/95 2.9
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VIEWGRAPH # 6 (continued)
TITLE: OMB Circulars/CFR
KEY POINTS:
COST PRINCIPLES
The cost principles determine allowable, unallowable, and costs
which are acceptable if approved by the Federal agency. The cost
principles which apply to Federal assistance are contained in OMB
Circulars A-21, A-87, and A-122 and in the Federal Acquisition Regulation.
Whether or not a cost is eligible for a specific project or program is
determined by the governing statutes and implementing program guidance
and policy for that project or program.
- OMB Circular A-21, revised October, 1991, provides guidelines for
educational institutions.
- OMB Circular A-87, revised May 4,1995, provides guidelines for State
and local governments.
- OMB Circular A-122, revised May 19,1987 provides guidelines for
non-profit organizations other than States, local governments, and
educational institutions.
- Cost principles for profit making entities are contained in the Federal
Acquisition Regulation (48 CFR Part 31).
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, and
Indian tribes. 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.
FEDERAL AUDITS
Federal auditors, whether EPA or contract auditors, will conduct an audit of
a profit maker receiving an assistance agreement.
EPA auditors may also conduct an audit of any other assistance recipient,
but are to rely, as much as possible, on audits conducted under A-128 and
A-133.
10/1/95 2.10
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TITLE 40 OF THE
CODE OF FEDERAL REGULATIONS
ji ;! PARTS; iG W^
PART 29
PART 30
PART 31
PART 32
PART 34
PART 35
PART 40
PART 45
PART 46
PART 47
Intergovernmental Review of EPA Programs and Activities
General Regulation for Assistance Programs For Other Than State
and Local Governments
Uniform Administrative Requirements For Grants and Cooperative
Agreements to State and Local Governments
Government-wide Debarment and Suspension (Nonprocurement) and
Government-wide Requirements for a Drua-Free Workplace
New Restrictions on Lobbying
State and Local Assistance
Research and Demonstration Grants
Training Assistance
Fellowships
Environmental Education Grants
All
Universities
Nonprofits
State, Locals
Indian tribes
All
All
Varies
All
All
All
All
VIEWGRAPH #7
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 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
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 viewgraphs.
10/1/95
2.11
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40 CFR PART 29
Provides Intergovernmental Review
Requirements
Applies to Most EPA Assistance
Programs
Implements Executive Order 12372
VIEWGRAPH #8
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.
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.
10/1/95 2.12
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VIEWGRAPH #8 (Continued)
TITLE: 40 CFR Part 29
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 Operator and Landfill
Operator training programs);
- Fellowships;
- Research & development, unless:
• public health is affected;
• an environmental impact statement is needed; or
• the proposal has a unique geographic focus and is directly
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:
Applicants in States that do not have an official State process 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).
10/1/95 2.13
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VIEWGRAPH #8 (Continued)
TITLE: 40CFRPart29
KEY POINTS:
The type of proposals subject to this requirement involve, among
other things, the construction of highways, wastewater treatment
facilities, sewers, airports, jails, mass transit, open-space land
projects, water development, or land conservation projects. Section
401 provides that to the maximum extent possible Federal financial .
assistance for development purposes should be consistent with
planning activities and decisions at State, regional, and local levels.
To satisfy these requirements, the applicant sends a copy of its
application to the areawide metropolitan, regional, or local planning
agency designated to perform planning for the geographic location of
the proposed project and allows them 60 days for review and
comment. If a project is proposed by a specialized unit of local
government, the same opportunity must be given to the general unit
of local government having jurisdiction over the project area. The
applicant must attach any comments that are received to the
application and submit them to the Federal funding agency, i.e.,
EPA.
10/1/95 2.14
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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,andA-133
VIEWGRAPH #9
TITLE: 40 CFR Part 30
KEY POINTS:
40 CFR Part 30 "Grants and Agreements with Institutions of Higher
Education, Hospitals, and Other Non-profit Organizations," (See
Appendix D) provides administrative requirements for all recipients
other than States, local governments, and Indian Tribes.
• 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."
Commercial organizations receiving assistance agreements must
comply with the administrative requirements in 40 CFR Part 30.
Foreign governments, organizations under the jurisdiction of foreign
governments, and international organizations are subject to the
requirements in Part 30, but the Award Official may waive some of
the requirements. All requirements waived will be stated in the
assistance agreement.
10/1/95
2.15
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40 CFR PART 31
• Provides Administrative
Requirements for State, Local,
and Indian Tribal Governments
• Implements OMB Circulars
A-87, A-102, and A-128
VIEWGRAPH#10
TITLE: 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 E.)
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."
10/1/95 2.16
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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#11
TITLE: 40 CFR Part 32
KEY POINTS:
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.
40 CFR Part 32, revised October 5,1994, 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.
10/1/95 2.17
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40 CFR PART 34
CANT USE FEDERAL FUNDS
TO LOBBY
CERTIFICATION REQUIREMENT
DISCLOSURE FORM
VIEWGRAPH #12
TITLE: 40 CFR Part 34 - Anti-lobbying
KEY POINTS:
40 CFR Part 34, issued October 23,1989, prohibits the use of
Federal funds to influence certain Federal contracting and
financial transactions.
Each applicant who requests or receives a Federal contract,
loan, grant or cooperative agreement exceeding $100,000 must
certify to that Agency that the applicant has not used, and
will not use Federal funds to pay someone to influence or
attempt to influence the Federal Agency or Member of
Congress for that award.
If the recipient uses non-Federal funds (regardless of dollar
amount) to lobby a Federal Agency of Member of Congress for a
specific grant or cooperative agreement, they must submit
an SF LLL, "Disclosure of Lobbying Activities" with the
application.
10/1/95 2.18
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40 CFR PART 35
• Provides
Program-Specific
Assistance
Requirements
• Contains 16
Subparts
VIEWGRAPH#13
TITLE: 40 CFR Part 35
KEY POINTS:
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, Fellowship programs, and
National Environmental Education Act grants.
The subparts of 40 CFR Part 35 which apply to construction grants are as
follows:
- Grants for Construction of Wastewater Treatment Work (Subpart C)
- 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 O).
- Financial Assistance for the National Estuary Program (Subpart P).
- General Assistance Grants to Indian Tribes (Subpart Q.)
Subparts B, F, G, L, and N are reserved for future use.
10/1/95 2.19
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40 CFR PARTS 40,45,46, and 47
• PART 40
Research and Demonstration
Grants
• PART 45
Training Assistance
• PART 46
Fellowships
• PART 47
Environmental Education Grants
VIEWGRAPH#14
TITLE: 40 CFR Parts 40,45, 46, and 47
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, 45,46, and 47
which are described below. (See Appendix H).
40 CFR Part 40, revised 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 in occupations involving
pollution abatement and control; and (5) bringing new people into the
environmental control field.
10/1/95 2.20
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VIEWGRAPH #14 (Continued)
TITLE: 40 CFR Parts 40,45,46, and 47
KEY POINTS:
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 also 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, issued March 1992, implements EPA's
requirements for awarding Environmental Education grants, These
grants are awarded from both Headquarters and the Regions. The
grants are available to local education agencies, colleges,
universities, State education or environmental agencies, not for
profit organizations, or noncommercial educational broadcasting
entities.
10/1/95 2.21
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EPA ORDERS, POLICIES &
GUIDANCE
• RECYCLED PAPER
• ASSISTANCE VS. ACQUISITION
• FUNDING ASSISTANCE AGREEMENTS
• CARRYOVER OF UNOBLIGATED BALANCES
• PERFORMANCE-BASED ASSISTANCE
• USE OF DISADVANTAGED BUSINESS
ENTERPRISES
• TIMELY AWARD OF ASSISTANCE
• POLLUTION PREVENTION GUIDANCE
VIEWGRAPH#15
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
Recycled Paper
EPA's policy on recycled paper is 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 I)
Acquisition vs Assistance
EPA's Order on the use of assistance agreements versus
acquisition (5700.1) is discussed in Module I. This Order
describes when it is proper to use an assistance agreement and
when a contract is required.
10/1/95 2.22
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VIEWGRAPH#15 (Continued)
TITLE: EPA Orders, Policies, and Guidance
KEY POINTS:
Funding Assistance Agreements
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 J for the 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.
EPA POLICIES
Carryover of Unobligated Balances
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 Appendix K.)
- 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.
10/1/95 2.23
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VIEWGRAPH#15 (Continued)
TITLE: EPA Orders, Policies, and
Guidance
KEY POINTS:
Performance-Based Assistance
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 L.) While the policy applies to
Continuing Environmental Program Grants, the guidelines
may be helpful to other programs.
Disadvantaged Business Enterprises
EPA's requirements on the use of disadvantaged business
enterprises (DBE) are contained in two EPA plans. (See
Appendix M) 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 2.6.
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 8% 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 30.44(b) (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).
10/1/95 2.24
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VIEWGRAPH #15 (Continued)
TITLE: EPA Orders, Policies, and Guidance
KEY POINTS:
Timely Award
The timely award policy ("Policy on the Timely Award of
Assistance Funds for Continuing 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
Pollution Prevention
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 O.) 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.
10/1/95 2.25
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Hierarchy
STATUTES
EXECUTIVE ORDERS
FEDERAL REGULATIONS
OMB CIRCULARS (implemented
through Federal regulations)
EPA ORDERS & POLICIES
EPA GUIDANCE
VIEWGRAPH#16
TITLE: HIERARCHY
KEY POINTS:
If there is a conflict between two or more documents, those
documents that have the force and effect of law take precedence
over those that do not.
The viewgraph lists in descending order which document has
precedence over the others.
A Federal statute carries the greatest amount of weight in this
scheme, followed by an Executive Order, and down through EPA
guidance.
10/1/95 2.26
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DOS AND DONTs
• INCLUDE THE DELEGATION OF AUTHORITY
NUMBER IN THE DECISION MEMORANDUM
• INCLUDE THE STATUTORY AUTHORITY IN THE
DECISION MEMORANDUM
DON'T
• RELY ON THE GMO TO KNOW EVERY
DELEGATION OF AUTHORITY
• RELY ON THE GMO TO KNOW EVERY
STATUTORY CITE
VIEWGRAPH#17
TITLE: Dos and Don'ts
KEY POINTS:
DO
Include the number of the approval Delegation of Authority in the
Decision Memorandum.
Include the statutory cite in the Decision Memorandum. This should
reference not only the Federal Statute, but the specific section of the
statute which authorizes EPA to make these awards.
DON'T
Rely on the GMO to identify your program's Delegation of Authority and
statutory authority.
10/1/95 2.27
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MODULE III
-------
ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE
PREAPPLICATION
APPLICATION
PHASE
-------
OVERVIEW
• PROGRAM GUIDANCE OR
SOLICITATION
• PRE-APPLICATION ASSISTANCE
• APPLICATION REVIEWS
VIEWGRAPH # 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 the administrative
evaluation 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.
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 is
helpful to keep a record of all discussions with the applicant in
case an issue arises later which was discussed during this
phase.
10/1/95 3.1
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GUIDANCE/SOLICITATION
• HEADQUARTERS GUIDANCE OR
SOLICITATION
• REGIONAL GUIDANCE OR
SOLICITATION
• DISTRIBUTION OF GUIDANCE OR
SOLICITATION
VIEWGRAPH #2
TITLE: Guidance/Solicitation
KEY POINTS:
The first step in awarding an assistance agreement is for the Program
to inform potential applicants through Agency guidance of the
availability of funding. For research grants, the solicitation serves
the same purpose as the guidance does for other programs. The
purpose of the guidance or solicitation is to inform applicants of the:
- Amount of possible funding;
- EPA (Headquarters/Regional) program priorities;
- Tasks/activities applicants must address in the workplan or
narrative;
- Application due date;
- Where to send the application;
- If the award is competed, the evaluation criteria and the relative
weight of each criteria;
- Statutory citation;
- Match (cost sharing) requirements, if applicable;
- Any special emphasis, e.g. the need to meet Disadvantaged
Business Enterprise requirements; and
- EPA Contact person.
To eliminate misunderstanding over what EPA will fund and what is
expected from the applicant, the guidance or solicitation must be in
writing.
10/1/95 3.2
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VIEWGRAPH #2 (Continued)
TITLE: Guidance/Solicitation
KEY POINTS:
The Program may distribute the guidance or solicitation by:
- Sending directly to the applicants, e.g., if the PO knows the
potential applicants which are eligible, such as continuing
environmental program grants;
- Publishing 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; or
- Distributing to potential applicants in a meeting /conference.
10/1/95 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 prospective applicants and
discuss the proposed work and budget before they submit an
application. This will help the prospective applicant develop the
proposal, or sharpen the focus of a proposal, and avoid delays
caused by submitting an incomplete application.
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 or the Program wants to "grease the skids" to
speed up the process.
Preapplication assistance may be formal, i.e, the prospective
applicant requests in writing or sends in an SF 424 "Application
For Federal Assistance," (see Appendix P) 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.
The receipt point for formal preapplications should be negotiated
between the Program office and the GMO.
Program and GMO Reviews
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 program goals and objectives. When
the application addresses areas the PO is not familiar with,
they must obtain assistance from other EPA staff with
expertise in the subject area, such as reviewing a Quality
Assurance Plan.
10/1/95 3.4
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VIEWGRAPH # 3 (Continued)
TITLE: Preapplication Assistance
KEY POINTS:
The applicant's 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.
After evaluating a formal 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 preapplication. 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.
Cautions
Release of information:
- If the Award is to be made based on competition. EPA employees
may not provide information 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.
- EPA employees should not prepare an application for an individual
or organization. It is permissible to help applicants by answering
questions, but the applicant should be preparing the application
except in unusual circumstances, e.g., language barrier.
10/1/95 3.5
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VIEWGRAPH #3 (Continued)
TITLE: Preapplication Assistance
KEY POINTS:
Benefits
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.
Timeframe for Review
The POs and GMOs should review preapplications
generally within 45 days of receipt.
10/1/95 3.6
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APPLICATION PHASE
• GMO RECEIVES APPLICATION
• APPLICATION REVIEWS
• REVIEW AND EVALUATE
APPLICATIONS IN 60-90 DAYS
• CBI/FOIA
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.
Application Receipt Point
The application should be sent to the GMO who will
assign an Assistance Identification Number (see next
viewgraph), 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).
If the PO receives an application, they are responsible
for sending the original to the GMO, who will assign the
Assistance Identification Number and enter the application
into GIGS. The GMO will send a copy of the application to
the PO.
Application Reviews
The programmatic and administrative 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.
10/1/95 3.7
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VIEWGRAPH # 4 (Continued)
TITLE: Application Phase
KEY POINTS:
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. 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.
Extramural (Non-EPA) Review. EPA supplements the 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 and 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.
A programmatic 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.
10/1/95 3.8
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VIEWGRAPH # 4 (Continued)
TITLE: Application Phase
KEY POINTS:
Review Timef rame
EPA's general goal is to complete its application review and
evaluation within 90 days after the GMO receives the
application, unless there is a statutory or program requirement to
review the application sooner, e.g., the Waste Water Treatment
Construction Grant program has a 60 day review requirement.
Applicants for Continuation/Continuing Environmental Program
grants should request assistance well before the 60 day
application due date to allow sufficient time for a thorough review.
The PO and GMO may discuss with applicants how to improve
applications. The application should not dwell on how the
project will benefit EPA, but specifically address why it
should be a grant or cooperative agreement and not a
contract.
Confidential Business Information/ FOIA Requests
A recipient may claim confidential information on the the
documents they submit to EPA. If the recipient asserts a claim of
confidentiality, they must mark their response "Confidential
Business Information" or with a similar disclaimer.
It is a good idea to ask applicants to identify Confidential
Business Information in the application. If the recipient claims
certain information is CBI, EPA cannot release that information
under the Freedom of Information Act. If EPA does not ask the
applicant to identify CBI in its application, and there is a FOIA
request, the EPA will have to go back to the recipient and ask
them to identify any CBI.
POs must make sure any information they furnish the public
is consistent with program objectives and guidance, as well
as releasable under the Freedom of Information Act (FOIA).
If you have any questions over whether the information is
releasable under FOIA, contact the Office of General
Counsel/Office of Regional Counsel.
10/1/95 3.9
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ASSISTANCE IDENTIFICATION NUMBER
PROGRAM CODE
r
SERIAL NUMBER
SEQUENCE NUMBER
AMENDMENT
DESIGNATOR
A1 000000 00 0
VIEWGRAPH #5
TITLE: Assistance Identification Number
KEY POINTS:
The EPA Assistance Identification Number consists of eleven
characters and uses both letters and numbers. Sequential
identification of these numbers is as follows:
Program Code: A two-character alpha-numeric code
identifies the assistance program.
Serial Number: A six-position number identifies a specific
assistance application or agreement.
Sequence Number: A two-position number identifies a fiscal
year or budget period in all programs other than Wastewater
Treatment Construction and State Revolving Fund projects,
where it identifies a specific project.
Preapplication/Amendment Designator: A one-position
code identifies a specific formal amendment to an assistance
agreement or amendment. Number "0-9" are used to indicate
no amendment through the ninth amendment and the alpha
codes "A-Z" indicate the tenth through thirty-sixth
amendment. An asterisk (*) identifies a preapplication.
10/1/95
3.10
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THE APPLICATION PACKAGE
Standard ij I lntargev«mm*ntal Ravltw Sign-off
Application B i
Form (SF 424) i T I Procurement System Certification, H applicable
B^getDetejTj
Project Narrative fc
I Certification Regarding Debarment and Suspeniton
Current Approved Indirect Cost Rat* Agre*m«nt
| AnH-Lobbylng CertHteatlori
I OualHy Aaaurance Protect Plan, II applicable
| Intended UM Plan, SRF only
| Health and Safety Plan. Sup»rfund only
Program Specific
Requirements § T | Community Rolallora Plan. Suptrtund only
| Enforc»m»nt L«tl»r, Sup«ftund only
VIEWGRAPH#6
TITLE: The Application Package
KEY POINTS:
The application consists of:
- The SF 424, "Application for Federal Assistance",
- Detailed budget,
- A Narrative/Workplan, and
- Certification attachments.
The application package may also contain program specific
requirements, such as the Intended Use Plan for the State Revolving
Fund program, or the Community Relations plan, Health and Safety
Plan, and Enforcement Letter for the Superfund program.
The following is a description of the contents of a "common"
application package.
10/1/95 3.11
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SF 424 - APPLICATION FOR FEDERAL
ASSISTANCE
FACESHEET
BUDGET INFORMATION
ASSURANCES
NARRATIVE/WORKPLAN
VIEWGRAPH # 7
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 been through a preapplication evaluation,
the GMO and PO may still have to work with the applicant to revise
the application further before it is approvable.
The PO is responsible for reviewing the application to ensure:
- 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 ask the applicant
questions if the application does not provide a clear
understanding of why the costs in the budget are necessary and
reasonable.
- 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 all information is complete and correct. This includes ensuring
all costs are allowable and that assistance is the appropriate funding
mechanism. The GMOs also ensure the application meets statutory,
regulatory, and legal requirements.
The SF 424 application (see Appendix P) is used for all EPA programs
except for the Wastewater Treatment Construction Grants program
(which uses EPA Form 5720-12), and the Fellowship programs (which
use EPA Form 5770-2). These last two forms were specifically
developed for those two programs.
10/1/95 3.12
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FACESHEET
GENERAL SUMMARY INFORMATION
SF424
Facesheet:
• General
Information
• Project
Summar
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. For Headquarters awards, the
applicant should write in Block 9 the name of the EPA
program person (usually the PO) who provided preapplication
assistance.
If the award of assistance involves verifying the recipient has
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 PO and GMO must review the most recent Financial
Status Report and supporting documentation to ensure the
applicant met the requirement.
10/1/95
3.13
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BUDGET INFORMATION
SF424-A
Budget
Information
$$
VIEWGRAPH # 9
SF 424-A Identifies Total Project Costs:
• Section A-Budget Summary
• Section B • Budget by Object Class
Category
• Section C • Non-Federal Resources
• Section D • Forecasted Cash Needs
• Section E • Budget Estimates of
Federal Funds Needed for Balance
of Project
• Section F- Other Budget Information
TITLE:
KEY POINTS:
SF 424 - Budget Information
The budget is the financial expression of the project or program and
includes both the Federal and non-Federal share.
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.
Budget Review Responsibilities
The narrative/workplan must justify the necessity for every item .
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 budget. There is no one way to determine the reasonableness
of any particular item. If the PO questions whether a particular item is
"reasonably" priced, they should ask other POs, call various suppliers, ask
the GMO for advice, or ask the applicant how they arrived at the cost.
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).
10/1/95
3.14
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VIEWGRAPH # 9 (Continued)
TITLE: SF 424 - Budget Information
KEY POINTS:
If the applicant requests funds to purchase equipment, 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 regarding disposition based on the PC's
recommendation.
Section A - Budget Information provides a summary of 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.
- 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.
- 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).
10/1/95 3.15
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VIEWGRAPH # 9 (Continued)
TITLE: 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 and that any
proposed contractors are not suspended or debarred. 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; and
- The proposed costs appear reasonable.
- The GMO will be reviewing costs for allowability and allocability.
- If the applicant is proposing to award a sole-source contract, they
must provide their reasoning so 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 will 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.)
10/1/95 3.16
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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. The amount of the
cost share, if any, will be determined by statute, 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.
10/1/95 3.17
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COST SHARING (MATCH)
Requirements Vary
With Program
Only Allowable
Costs Can Be Used
Cannot Use Federal
Funds As Match
May Use In-Kind
VIEWGRAPH#10
TITLE: Cost Sharing (Match)
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 (Toxic Substances Controj Act
§10 grants), or by regulation (Superfund Technical Assistance
Grants.)
Recipients can claim only allowable and eligible costs to meet
cost sharing requirements.
Recipients subject to OMB Circular A-110 (see Module 2) may
claim unrecovered indirect costs as part of their cost share, with
the prior approval of the EPA Award Official.
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,
or the Indian Self-Determination Act.
10/1/95 3.18
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VIEWGRAPH # 10 (Continued)
TITLE: Cost Sharing (Match)
KEY POINTS:
Sources of funds for recipient cost sharing are either:
- Third Party in-kind contributions e.g., facilities, equipment,
materials, professional services, volunteer staff time
provided by non-Federal public agencies, organizations, or
individuals; or
- Cash.
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.
10/1/95 3.19
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PROGRAM INCOME
WHAT IS INCLUDED
• HOW IT IS TO BE USED
VIEWGRAPH#11
TITLE: Program Income
KEYPOINTS:
What is Program Income?
"Program Income" is the gross income received by the
recipient or subrecipient:
- Directly generated by an assistance supported activity,
or
- Earned only as a result of the assistance agreement
during the project period.
• If authorized by regulation or the assistance agreement,
the recipient may deduct costs incident to the generation
of "program income."
"Program income" does not include interest earned on
assistance funds, rebates, credits, discounts, refunds,
etc., unless specifically made so in EPA regulations.
Income from royalties and license fees for copyrighted
materials, patents, and inventions developed by a
recipient or subrecipient is not "program income" unless
specifically identified as such in the assistance
agreement or EPA regulation.
• Taxes, special assessments, levies, fines, and other
such revenues raised by a recipient or subrecipient are
not program income unless the revenues are specifically
identified as program income in the assistance
agreement or EPA regulations.
10/1/95 3.20
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VIEWGRAPH#11 (Continued)
TITLE: Program Income
KEY POINTS:
Use of Program Income
Recipients must use program income for current costs
unless EPA regulations or the assistance agreement specify
another alternative use for the program income.
Further, program income which was not anticipated at the
time of award shall be used to reduce the Federal and
recipient contributions rather than increase the funds
committed to the project.
- Addition. When authorized, program income may be
added to the funds committed to the agreement. The
program income shall be used for the purposes and under
the conditions of the assistance agreement.
- Cost Sharing or matching. When authorized, program
income may be used to meet the cost sharing or matching
requirement of the assistance agreement.
Unless the terms of the agreement or EPA regulations
provide otherwise, there are no Federal requirements
governing disposition of program income earned after the
project period end date.
10/1/95 3.21
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CRITERIA FOR APPROVING COSTS
Costs Conform to OMB Cost
Principles
Costs Conform to Applicable
Regulations
Costs Conform to Terms of
Assistance Agreement
Costs Are Incurred During the
Project Period
Costs Are Eligible, Allowable,
Allocable and Reasonable
VIEWGRAPH#12
TITLE: Criteria for Approving Costs
KEY POINTS:
Recipients must maintain and report costs in accordance
with the regulation that governs the agreement, i.e.,
either 40 CFR 30.27 or 40 CFR 31.20.
Each recipient must follow the Federal cost principles
applicable to that type of organization. (See page 2.10
for a list of the cost principles.)
• 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.
The next few pages explain "eligible," "reasonable,"
"allowable," and "allocable" in detail.
10/1/95
3.22
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ELIGIBLE, REASONABLE, ALLOWABLE,
AND ALLOCABLE COSTS
• ELIGIBLE - STATUTORY BASIS
• REASONABLE - PRUDENT PERSON
THEORY
• ALLOWABLE • PERMITTED BY
REGULATION, CIRCULAR, ETC.
• ALLOCABLE - BENEFITS RECEIVED
VIEWGRAPH#13
TITLE: Eligible, Reasonable, Allowable, and Allocable Costs
KEY POINTS:
The PO is responsible for determining that costs are:
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);
• 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 at large, and the
Government.
- Significant deviations from the established practices of the
organization which may unjustifiably increase the award costs.
10/1/95 3.23
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VIEWGRAPH #13 (Continued)
TITLE: Eligible, Allowable, Allocable
KEY POINTS:
The GMO is responsible for determining that costs are:
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 (see definition of "eligible);
- 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.
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 like
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.
10/1/95 3.24
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PREAWARD COSTS
DEPENDS ON:
• RECIPIENT
• PROGRAM
VIEWGRAPH#14
TITLE: Preaward Costs
KEY POINTS:
STATE, LOCAL GOVERNMENTS, AND INDIAN TRIBES
EPA allows pre-award costs only in the following circumstances
and programs:
Programs
Construction Grants: The Award Official must specifically
approve preaward costs before they are allowable. (See 40
CFR 35.2118 for the limitations on 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.
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.
Superfund Awards: Except as permitted in §35.6285 (credits and
advanced match), the Award Official must sign the assistance
agreement before costs are incurred.
The recipient may incur costs between the date the Award
Official signs the assistance agreement and the date the
recipient signs the agreement, if the costs are identified in the
agreement and the recipient does not change the agreement.
10/1/95 3.25
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VIEWGRAPH #14 (Continued)
TITLE: Preaward Costs
KEY POINTS:
INSTITUTIONS OF HIGHER EDUCATION AND OTHER
NONPROFITS
Can incur preaward costs 90 calendar days prior to the
award without prior approval from EPA.
• Can incur preaward costs more than 90 calendar days prior
to award only with prior approval from the EPA Award
Official.
The applicant must include all preaward costs in it
application.
The applicant incurs such costs at its own risk, EPA is
not obligated to pay for any costs if:
- The applicant does not receive an award,
- The award is less than anticipated,
- The award is inadequate to cover preaward costs, or
- The costs do not conform to the cost principles.
Also, the Program must determine there are sufficient
programmatic reasons to incur the expenditure prior to
award, e.g., time constraints, weather factors.)
10/1/95 3.26
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CLASSIFICATION OF PROPERTY
Personal Real
Property Property
VIEWGRAPH#15
TITLE: Classification of Property
KEY POINTS:
Property can be "personal property," or "real property."
PERSONAL PROPERTY
Personal property can be tangible, Le, equipment and
supplies, intangible, or notes and debt instruments.
- Equipments defined as items with a useful life of more
than 1 year and an acquisition cost of $5,000 or more
per unit.
- Supplies are defined as tangible personal property other
than equipment and intangible property.
- Intangible property includes trademarks, copyrights,
rights in data, and patents.
- Notes and debt instruments include lease agreements,
stock, and other instruments of property ownership.
Whether a piece of property is "equipment" or a "supply"
makes a difference when the agreement is closed out and
at the time of disposition (see Module VI). It also makes a
difference because each piece of "equipment" must be
separately approved by the PO and itemized in the
application Workplan/Narrative, or as an attachment to
the budget page, whereas "supplies" do not have to
be itemized.
10/1/95 3.27
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VIEWGRAPH #15 (Continued)
TITLE: Classification of Property
KEY POINTS:
Tangible personal property where the Federal Agency has
statutory authority to vest the title to the recipient without
further obligation to the Federal Government is called
"exempt property." An example is given in the Federal
Grant and Cooperative Agreement Act for property
acquired under an assistance agreement to conduct basic
or applied research by a non-profit institution of higher
education or non-profit organization whose principle
purpose is conducting scientific research.
REAL PROPERTY
• Real property under all EPA assistance programs is
defined as land, including land improvements, structures
and appurtenances thereto, excluding movable machinery
and equipment.
10/1/95 3.28
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ACQUISITION/TITLE OF PROPERTY
• LISTED IN ASSISTANCE
AGREEMENT
• ACQUIRED DURING
BUDGET/PROJECT PERIOD
• RECIPIENT HAS TITLE
VIEWGRAPH#16
TITLE: Acquisition/Title of Property
KEY POINTS:
ACQUISITION
All recipients:
The purchase of property must be authorized in the
assistance agreement.
Property may be purchased only during the budget/project
period of the assistance agreements.
Superfund Recipients:
In addition to the above, to acquire equipment with CERCLA
funds, the recipient must conduct and document a cost
comparison analysis to determine the most cost effective
method for obtaining the equipment (e.g., leasing, using
contractor services, or purchasing the equipment with
CERCLA funds.)
Federally-owned property
• Recipients may use Federally-owned property.
TITLE
All recipients:
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 assistance
agreement) to transfer title to the Federal Government or
another entity within 120 days after the end of the project.
10/1/95 3.29
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VIEWGRAPH #16 (Continued)
TITLE: Acquisition/Title of Property
Non-profit institutions of higher education conducting basic or
applied research and non-profit organizations whose primary
purpose is the conduct of scientific research:
If EPA does not condition the assistance agreement to reserve
the right to transfer title within the 120 day time period, the
recipient has no further obligations or accountability to EPA.
Federally-owned property
• The title remains with the Federal government.
Supplies
The title to supplies also vests with the recipient.
EPA interest in the property:
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.
At time of disposal, EPA gets 90% of the proceeds from the
sale based on current fair market value or, if EPA gets the
property, EPA owes the recipient 10% of the proceeds from
the sale.
10/1/95 3.30
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ASSURANCES
Standard Form 424-B:
SF424-B
Outlines Federal Laws
Applicable
laws for Applicants
Assurance
of compliance
• Lists Requirements
Applicants Must
Comply With
VIEWGRAPH#17
TITLE: Assurances
KEY POINTS:
The purpose of the assurances in the SF 424B is to emphasize the
Federal laws and requirements 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
assistance 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 of the applicant.
10/1/95 3.31
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PROJECT NARRATIVE/
WORKPLAN
PROJECT NARRATIVE
L History
• Describes the
History of the
Problem, and
Proposed
Actions
• Indicates
Compliance with
Regulatory
Requirements
VIEWGRAPH#18
TITLE: Project Narrative/Workplan
KEY POINTS:
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, e.g.,
why the activity should be funded with an assistance relationship and
not a contract.
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.
10/1/95
3.32
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VIEWGRAPH # 18 (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.
For research awards, the workplan should contain a biographical
sketch(es) of the Key Person(s).
10/1/95 3.33
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TIPS FOR NEGOTIATING
WORKPLANS
• STRIVE FOR REALISTIC GOALS
. ADDRESS MAJOR OBJECTIVES
• USE DIPLOMACY
• COMPROMISE
• PAY ATTENTION TO DETAIL
VIEWGRAPH#19
TITLE: Tips for Negotiating Workplans
KEY POINTS:
The goal is to negotiate a workable document that is:
- Realistic and contains well defined commitments that foster
accountability.
- Reflects all activities to be conducted with total assistance
dollars (every dollar includes the Federal and recipient shares.)
Seven management principles to follow are:
- Set priorities and commitments.
- Set a realistic schedule.
- Ensure applicant structures their workplan according to key
program elements with specific outputs.
- Negotiate to improve the workplan.
- Involve other programs in developing the workplan, if appropriate.
- Plan for evaluation from the outset.
- Coordinate with the GMO staff during workplan development, as
needed.
The PO will, In most cases, be EPA's lead negotiator. The PO
also may often need to negotiate internally to establish their
program's officialposition in dealing with the applicant. To be
successful the PO should:
- Start the process early; provide guidance timely; if necessary,
convene a meeting with the applicant early in the process to
answer questions and influence the drafting of the workplan.
- Have accurate data about the applicant's past performance.
10/1/95 3.34
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VIEWGRAPH #19 (Continued)
TITLE: Tips for Negotiating Workplans
KEY POINTS:
- Realistically assess the applicant's capacity to meet
commitments. Understand their current workload and
ability and/or capability to take on new work.
- Identify areas of potential consensus and potential
disagreements early in the process.
- Focus on interests basic to achieving program objectives.
Make EPA's objectives clear to the applicant and work to
identify shared interests.
- Search for options to resolve conflicts.
- HAVE A PLAN. Know what role EPA personnel will have in
reviewing the draft and final workplan submittals.
Establish firm deadlines for negotiating the workplan and
stick to them.
Evaluation Plan. Introduce your plan for evaluating progress and
performance EARLY in your negotiating process. Define
consequences of inadequate and or nonperformance. Include
reporting plans and schedules and describe the contents
expected in the reports. Coordinate with and include the GMO
during the development of the evaluation plan.
10/1/95 3.35
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CERTIFICATIONS
SUSPENSION AND DEBARMENT
ANTI-LOBBYING
DRUG-FREE WORKPLACE
PROCUREMENT SYSTEM
CERTIFICATION
VIEWGRAPH #20
TITLE: Certifications
KEY POINTS:
The applicant must make the following certifications.
• 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 and the GMO should
ensure that the list has been checked before an award is
made. The GMO or the Headquarters/Regional Counsel's
office or your Program office will probably have the current
publication.
- Debarment requires a formal investigation, notification, a
hearing, and (if requested) an appeals process before the
EPA Debarment Official can debar an entity.
- 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 an entity.
10/1/95 3.36
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VIEWGRAPH #20 (continued)
TITLE: Certifications
KEY POINTS:
The Anti-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 applicants and
recipients to submit the Standard Form LLL. "Disclosure of
Lobbying Activities." 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 assistance agreement.
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.
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). The form does not apply to State
governments except under the Superfund program [see 40
CFR 35.6550(a)]. Local governments and Indian Tribal
governments may use the form to self-certify under the
self-certification provision in 40 CFR Part 31.
10/1/95 3.37
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QUALITY ASSURANCE/
QUALITY CONTROL
• MANAGEMENT SYSTEM
MANAGEMENT PLAN
PROJECT PLAN
VIEWGRAPH #21
TITLE: Quality Assurance/Quality Control
KEY POINTS:
If the project involves environmentally related measurements or data
generation, the applicant/recipient must develop and implement QA
practices. These practices, or quality management system, must
comply with the requirements of ANSI/ASQI E4, "Specifications and
Guidelines for Quality Systems for Environmental Data collection
and Environmental Technology Programs."
With the Application
All applications for financial assistance where the project involves
environmentally related measurements or data generation must
include a quality management plan to document the applicant's
quality assurance capabilities. The management plan describes the
quality management system in terms of the organizational structure,
functional responsibilities of management and staff, lines of
authority, and required interface for those planning, implementing
and assessing all activities conducted.
The Award Official must approve the quality management plan
before they make the award.
After Award
Once the award is made, the recipient must submit a quality
assurance project plan for EPA's review and approval. The project
plan is an organization's written procedures which delineate how it
produces quality data for a specific project or measurement method.
The recipient must not obtain or generate environmental data
until an EPA QA Officer approves the QA Project Plan.
10/1/95 3.38
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VIEWGRAPH #21 (Continued)
TITLE: Quality Assurance/Quality Control
KEY POINTS:
• It is the POs responsibility to obtain their designated
Quality Assurance Officer's concurrence on the QA
program/project plans.
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.
10/1/95 3.39
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APPLICATIONS INVOLVING
INTERNATIONAL ACTIVITIES
• ALL APPLICATIONS
THROUGH AA FOR IA
• STATE DEPARTMENT
REVIEW MAY BE NECESSARY
^* ^
VIEWGRAPH # 22
TITLE: International Activities
KEY POINTS:
All applications where all or part of the project is to be performed in a
foreign country by a US recipient, a foreign recipient, or an
international organization regardless of where it is located must be:
- Approved by the Assistant Administrator for International
Activities; and, if necessary
- 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.
Any agreement where there will be substantial foreign travel should go
through the OIA.
The "Fly America Act" requires that all government-financed foreign air
travel must be on U.S. air carriers certified under 49 U.S.C. §1371 to the
extent that service by such carriers is available. This applies to Federal
employees and their dependents, consultants, contractors, recipients, and
others traveling for the U.S. Government.
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 the Office of International Activities,
Washington, DC.
10/1/95 3.40
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PROJECT OFFICER
ROLES AND
RESPONSIBILITIES
• PROVIDE TECHNICAL EXPERTISE
• APPROVE BUDGET/WORKPLAN
• WORK WITH APPLICANT
• INITIAL DETERMINATION OF GRANT
VS CONTRACT
• DETERMINE GRANTS VS
COOPERATIVE AGREEMENT ISSUES
VIEWGRAPH #23
TITLE: Project Officer 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 maybe
beneficial.
Informing the prospective applicant that EPA does not
automatically pay for costs incurred before an award is made
(except in limited circumstances, see p. 3.23 and 3.24.)
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.
10/1/95 3.41
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VIEWGRAPH #23 (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 explaining 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 GMO) 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.
10/1/95 3.42
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GMO ROLES AND
RESPONSIBILITIES
• OFFICIAL RECEIPT POINT FOR
APPLICATIONS
• PROVIDE ADMINISTRATIVE EXPERTISE
• REVIEW APPLICATION FOR
ADMINISTRATIVE ISSUES
• COMMUNICATE ADMINISTRATIVE
ISSUES TO APPLICANT
VIEWGRAPH #24
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 application, and distributing a copy to the PO
for their programmatic review. (Preapplications may go directly to the
Program for review. The receipt point for formal pre-applications
should be negotiated between the Program and the GMO.)
- 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, i.e.,
procurement, property, administrative and financial (with the
FMO/SFO), 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.
10/1/95 3.43
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OTHER PLAYERS'
ROLES AND RESPONSIBILITIES
• APPLICANT
• FMO/SFO
• OGC/ORC
• MBE/WBE COORDINATOR
VIEWGRAPH #25
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/SFO 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 General 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.
10/1/95 3.44
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VIEWGRAPH #25 (Continued)
TITLE: 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 R for a list of the
Headquarters and Regional MBE Coordinators.
10/1/95 3.45
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MODULE IV
-------
ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE IV
AWARD
-------
THE ASSISTANCE AGREEMENT:
AWARD PHASE
RESPONSIBILITIES
PROGRAM APPROVAL VS THE
AWARD DECISION
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.
10/1/95 4.1
-------
OVERVIEW OF THE AWARD PHASE
Program Office/lab
Issues
Programmatic
Approval
Financial Management
Office (Regions)
Allowance Holder (HQ)
Commits Funds
Program Office
Prepared/approves
Funding
Recommendation/
Decision Memo
SRO Reviews Awards
Over Thresholds
GMO Prepares
Assistance
Agreement/Amendment
Award Official Executes
the
Agreement/Amendment
f
GAD notifies the
Congressional Affairs
Office
5 Workday Waiting
Period
Award mailed to
Applicant
VIEWGRAPH # 2
TITLE: Overview of the Award Phase
KEY POINTS:
The award phase of assistance administration consists of
nine stages, as illustrated.
The program office (Approval/Decision Official) approves an
application for award 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 GIAB obligate the funds.
The program office prepares and forwards its funding
recommendation package to the GMO.
• The Senior Resource Official must 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.
10/1/95
4.2
-------
VIEWGRAPH # 2 (Continued)
TITLE: Overview of the Award Phase
KEY POINTS:
The Allowance Holder is the person who has control over the
funds, generally the Office Director or the National Program
Manager.
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. During this 5 day period, the PO must not
tell the applicant they are getting an award.
10/1/95 4.3
-------
COMPONENTS OF
THE AWARD
Assistance
Application
Assistance
Agreement
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; and
(3) EPA regulations (by reference).
10/1/95
4.4
-------
CONTENTS OF FUNDING
RECOMMENDATION PACKAGE
DECISION MEMORANDUM
FUNDING ORDER
PROGRAMMATIC TERMS &
CONDITIONS
COMMFTMENT NOTICE
IN-HOUSE REVIEW
EXTRAMURAL REVIEWS
(OR PANEL REVIEW)
RESEARCH ONLY
ENVIRONMENTAL REVIEW,
ORD GRANTS ONLY
QUALITY ASSURANCE
REVIEWS, IF APPLICABLE
ADDITIONAL INFORMATION
NEGOTIATED WITH RECIPIENT
NEW AWARD
X
X
X
X
X
X
X
X
X
INCREMENTAL
FUNDING
N/A
X
X
X
N/A
N/A
N/A
N/A
X
SUPPLEMENTAL
FUNDING
X
X
X
X
X
N/A
N/A
X
X
CONTINUATION!
AWARD j
X
X
X
X
X
N/A
N/A
X
X
VIEWGRAPH#4
TITLE: Contents of Funding Recommendation Package
KEY POINTS:
Definitions
• New/Initial award: the initial award of a project.
Incremental Funding (Partial Funding): an amendment to an
initial award or continuation award to provide additional funds
to the recipient per the original application when the initial
award has not been fully funded.
Supplemental Funding: an amendment to an initial award or
continuation award, based on a written request from the
recipient, to provide additional funds over and above the
amount requested in their original application.
Continuation Award:the award of a subsequent budget
period within an approved project period. For projects over
two years, more than one budget period may be required.
The PO should consult appropriate regulations for limits
that apply to duration of budget and project periods.
10/1/95 4.5
-------
VIEWGRAPH #4 (Continued)
TITLE: Contents of the Funding Package
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 programmatic terms and
conditions. The program may provide this information in the
Decision Memorandum.
The Commitment Notice is used to reserve funds. EPA cannot
make an award unless funds are "committed" in the Integrated
Financial Management System (IFMS). The PO is responsible for
ensuring the Commitment Notice is filled out and is in the
Funding Package. The PO can get budget information from
their Budget office.
• For research grants, the Office of Research and Development has
special review procedures. Compliance with these extramural (or
panel) reviews must be addressed in the funding package.
The Decision Memorandum is the Program's recommendation for
award. This documentation must include:
- What actions the Program wants the GMO to take, e.g., transfer
funds among categories, make an award, approve equipment.
- 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;
10/1/95 4.6
-------
VIEWGRAPH # 4 (Continued)
TITLE: Contents of the Funding Package
KEY POINTS:
- 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 not the Federal government, see Module I, pages 1.6 -
1.8);
- 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.
- State that the award does not duplicate other EPA funded efforts,
or if it does, why it is necessary to fund this project.
- Justify using funds from two different appropriation accounts (split
funding/ mixing appropriations), e.g., funding a project with both
Research and Solid Waste funds. The Program must be able to
track funds by appropriation. If more than one appropriation
account is used, contact your Senior Budget Officer to ensure
the proper accounting data is used. Since this could be time
consuming, start this as soon as you know two or more
appropriations will be used.
- For Headquarters awards to fund a Conference, Workshop, or
Symposium, address:
1) Who is initiating the request?
2) How will it be advertised?
3) Whose logo will be on the agenda and materials?
10/1/95 4.7
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CONDITIONS IN THE
ASSISTANCE AGREEMENT
Terms and
Conditions
Special Conditions
VIEWGRAPH # 5
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
(e.g., the 40 CFR Parts 30 and 31 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%
DBE plan, or
- Are added to emphasize a requirement for a particular project,
recipient, or group of recipients, e.g., the need for an approved
indirect cost rate before the recipient can draw down on indirect
costs.
10/1/95
4.8
-------
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 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. (See Module II for examples of "substantial involvement.")
High Risk Applicants (Special Conditions)
In some cases, EPA may determine that an applicant is a "High Risk"
and should, therefore, be subject to certain "Special Conditions."
An applicant 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.
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.
10/1/95 4.9
-------
EXECUTION OF
THE ASSISTANCE AGREEMENT
Award Official
Signs
Agreement
Appropriate
Notifications are
Made
Agreement is
Issued to
Recipient
Recipient
Signs
Agreement
Countersigned
Agreement is
Returned 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 legal and fiscal obligations.
Immediately after the Award Official signs the agreement, the GMO
enters the signature date into the Grants Information Control System
(GIGS). This date is the award date.
Overnight, GIGS generates a report of all awards made the previous
day. The report is simultaneously delivered to the GAD and to the
Office of Congressional Liaison (OCL). GAD logs and conducts a
"quality control" on the data and notifies OCL of any corrections.
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 (5 workdays) for Congressional
notification may be waived pursuant to OCL procedures.
Once a recipient signs an agreement and sends it back to the GMO,
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.
10/1/95
4.10
-------
PROJECT OFFICER
ROLES AND
RESPONSIBILITIES
PREPARE FUNDING PACKAGE
OBTAIN PROGRAMMATIC
CONCURRENCES
ESTABLISH THE OFFICIAL
TECHNICAL 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 offficial technical'project file. See Appendix
Q). (The GMO will have the official assistance file and
Finance will have the official financial file.)
10/1/95 4.11
-------
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.
10/1/95 4.12
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OTHER PLAYERS'
ROLES AND
RESPONSIBILITIES
• APPLICANT/RECIPIENT
• FINANCIAL MANAGEMENT
• SENIOR RESOURCE OFFICIAL
• OGC/ORC
• MBE/WBE COORDINATOR
VIEWGRAPH # 9
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 (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 $1 million for project awards,
and $5 million for Continuing Environmental Program grants.
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.
10/1/95 4.13
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MODULE V
-------
ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE V
PROJECT ADMIN & MGT
-------
OVERVIEW
PERFORMANCE
REPORTS
TECHNICAL ASSISTANCE
MODIFICATION REQUESTS
DEVIATIONS/DISPUTES
NONCOMPLIANCE
VIEWGRAPH #1
TITLE: Overview
KEY POINTS:
This module discusses the general responsibilities of GMOs,
POs, and SFOs during project administration.
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), and provides
technical assistance if needed.
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 Project Officer
and SFO, and the recipient's project manager and
administrative staff with regard to the administrative aspects
of assistance.
10/1/95 5>1
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MONITORING RECIPIENT PERFORMANCE
On-Site Reviews
Technical Assistance
Reports
Communications
Audit
10/1/95
VIEWGRAPH # 2
TITLE: Monitoring Recipient Performance
KEY POINTS:
One of the POs' main responsibilities is to keep track of progress
on the project and ensure the recipient complies with the
programmatic requirements of the award.
To do this, the PO needs information. This information will come
directly from the recipient through reports, or, if resources permit,
from on-site reviews.
ON-SITE REVIEWS
Mid-year and end-of-year reviews are helpful to evaluate
recipient performance. These reviews are required under the
"Policy on Performance Based Assistance" for Continuing
Environmental Program Grants, and are strongly encouraged for
other assistance programs.
TECHNICAL ASSISTANCE REVIEWS
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,
following up on these changes, and gaining a better
understanding of specific regulations that govern the Recipient's
assistance agreement.
5.2
-------
VIEWGRAPH # 2 (Continued)
TITLE: Monitoring Recipient Performance
KEY POINTS:
REPORTS
• Financial Reports: The PO may receive financial information on
the project from:
SF269, "Financial Status Report" (FSR). The FSR provides
information on the total amount expended versus the total grant
award. It is valuable for continuation awards because it lets the
PO know if there are any funds to be "carried over," i.e., available
for the next award (see Appendix K for the Carryover Policy).
The FSR is required at the end of the award and is due 90 days
after the end of budget period. If the Program wants a FSR more
frequently, they should discuss it with the GMO.
The Integrated Financial Management System (IFMS). IFMS
gives POs information on the funds disbursed for specific
assistance agreements. A PO can use an IFMS report on draw
downs to compare the funds spent with the progress on the
project. This report can be obtained from the Service Finance
Office (or anyone else with access to IFMS).
Payment Requests:
Whether the PO receives the recipient's payment request for
approval will depend on the method of payment.
Under the reimbursement payment system, POs should review
the request and determine if payment should be made.
Under the ACH payment system, the PO and the GMO will not
see the payment request before it is made. The recipient sends
the request directly to the SFO.
Performance Reports: the Performance Report is perhaps the
POs1 best source of information.
Each Program Office determines what information they need
to adequately monitor the recipient's progress. The report
should require information on the rate of expenditure versus
progress on the project, actual accomplishments, and problems
encountered during the performance period which may interfere
with meeting program/project objectives.
10/1/95 5-3
-------
10/1/95
VIEWGRAPH # 2 (Continued)
TITLE: Monitoring Recipient Performance
KEY POINTS:
The PO should review each report to determine how the
project is progressing. If there appears to be a problem(s),
the PO should work to resolve it. Some solutions may mean
getting the Grants Specialist and the OGC/ORC involved.
The PO should never let a problem go unresolved. Also,
the PO should document how each problem was resolved.
This will come in handy if there is a question later on, e.g.,
during an audit.
The frequency of a Performance Report will vary with the
program and is usually required by regulation or program
policy. The PO should request the reports as often as
necessary to adequately monitor recipient performance.
However, the OMB Circulars prohibit requesting Performance
Reports more often than quarterly.
Tracking Receipt of Reports
The GMO is responsible for obtaining administrative reports
required by the agreement, and will follow up if the reports are
not received by the dates specified in the agreement.
Recipients may be told to send some reports directly to
Offices other than the GMO (e.g., MBE/WBE reports to the
MBE Coordinator).
The POs and others who receive a report should let the
GMO know when the reports are received or not received
on time. During closeout, the GMO will be asking the other
offices if all reports were received when requested and met
EPA requirements (see Module 6).
COMMUNICATIONS:
Keep in touch with the recipient. This is the best way to keep
aware of what is going on with the project. Although
telephone calls are not a total substitute for on-site visits they
may be all that can be done when resources do not permit
on-site reviews.
AUDIT
If an audit is conducted, the PO should take the opportunity tc
rectify/resolve problems by taking corrective actions as
necessary (See Module 7).
5.4
-------
Electronic
Transfer
PAYMENT
• METHODS
- Advance Payment
(EPA-ACH or
Treasury Check)
- Reimbursement
Payment (Treasury
Check)
• WITHHOLDING
PAYMENTS
VIEWGRAPH # 3
TITLE: Payment
KEY POINTS:
Payment Methods
There are two payment methods available
- Advance Payment; and
- Reimbursement.
(Recipients may be paid through a combination
Advance/Reimbursement, i.e., Working Capital Advance.)
Under these payment methods, recipients will receive payment
under one of two mechanisms:
- Electronic transfer of funds. This includes the Automated
Clearing House (ACH) mechanism for domestic entities only,
and FEDLINE for international entities.
- U.S. Treasury check.
POs should not make promises regarding how a recipient is
to be paid under their assistance agreement. Because each
recipient must comply with the U.S. treasury and Office of
Management and Budget cash management guidelines,
recipients should contact the appropriate EPA Service Finance
Office (SFO) directly for questions on how and when their
payments will be processed.
Payment methods are determined by the SFO, however, the
SFO, GMO, and program may have to get together to determine
the appropriate payment method/mechanism.
10/1/95 5-5
-------
VIEWGRAPH #3 (Continued)
TITLE: Payment
KEY POINTS:
ADVANCE PAYMENTS METHODS
Recipients are to be paid in advance provided they have
written procedures which limit the time between receiving
funds from the Federal Government and disbursing those
funds; and meet the financial management standards in 40
CFR Parts 30 and 31.
Cash advances are limited to actual, immediate cash
requirements.
REIMBURSEMENT PAYMENT METHOD
Reimbursement is the preferred when the recipient does not
meet the requirements for advance payment.
Under this method, the recipient asks for payment after it s
actual cash disbursements.
If the recipient is under a reimbursement payment system
(for other than construction grants), the recipient is to
request payments on the SF-270, Request for Advance or
Reimbursement.
- The PO should review the recipient's request for
payment to determine if 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.
• For Headquarters awards, the PO and GMO do not see
the payment request, and therefore, the PO must rely on
the progress reports or an IFMS report to determine if
progress on the project/program is consistent with the
recipient's requests for payment.
If a Wastewater Treatment Construction Grant recipient is
requesting a reimbursement, they must submit the request
for reimbursement on SF 271, "Outlay Report and Request
for Reimbursement for Construction Programs." For
Headquarters awards, the SFO performs this review and
the PO and GMO do not see the payment request.
10/1/95 5-6
-------
VIEWGRAPH # 3 (Continued)
TITLE: Payment
KEY POINTS:
The GMO reviews reimbursement payment requests for
compliance with the cost sharing requirements of the
agreement. For Headquarters awards the SFO ensures
compliance with the cost sharing requirements.
The SFO 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 request.)
Working Capital Advance
If a recipient cannot met the criteria for the advance
payment method and the EPA determines that the
recipient 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.
WITHHOLDING PAYMENTS
EPA shall not withhold payments for proper charges made
by recipient unless:
- A recipient fails to comply with the project objectives,
terms and conditions of the award, or Federal reporting
requirements; or
- A recipient is delinquent in a debt to the Federal
Government as defined in OMB Circular A-129.
10/1/95 5-7
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CHANGES REQUIRING PRIOR PO
APPROVAL OR FORMAL AMENDMENT
Type of Change
Requested
Change in $
Change in Scope
Approvals Required
by Cost Principles
Extend Award
Key Personnel
Transfer of Costs to
Different Activities
Some 3rd Party
Services
Indirect to Direct
State/Local/Indian
Formal
Amendment
X
X
X
X
X
X
X
N/A
Universities
PO
Approval
X
X
X
X
5/Nonprofits
Formal
Amendment
X
X
Varies
Varies
VIEWGRAPH#4
TITLE: Changes Requiring Prior PO Approval or
Formal Amendment
KEY POINTS:
Certain post-award changes cannot be made without a formal
amendment to the agreement. However, 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.
A recipient's written request for a change must be accompanied
by a narrative justification for the proposed revision, and must be
submitted to the PO.
Any change to add work/tasks/activities must meet the
principle purpose test of the Federal Grant and Cooperative
Agreement Act (See Module 1, page 1.7).
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.
10/1/95
5.8
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VIEWGRAPH # 4 (Continued)
TITLE: Changes Requiring Prior PO Approval or
Formal Amendment
KEY POINTS:
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.
Revisions to the objectives or scope of the project.
Inclusions of costs which require prior approval under the cost
principles, e.g., equipment. The EPA Award Official may waive
this requirement.
State, local government, and Indian Tribal Governments
Extensions to the period of availability of funds.
Changes in key project personnel,if key personnel were identified
in the agreement. For research projects, this means a change in
the recipient's project manager or principle investigator.
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 later 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.
Transfer of funds allotted for training allowances, i.e., from
direct payments to trainees to other expense categories.
Rebudgeting funds from construction to nonconstruction
activities, or vice versa.
10/1/95 5-9
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VIEWGRAPH #4 (Continued)
TITLE: Changes Requiring Prior PO Approval or
Formal Amendment
KEY POINTS:
Under nonconstruction projects, contracting out or
otherwise obtaining services of a third party to
perform activities central to the purpose of the
award not already approved in the
Workplan/narrative. this does not include the
procurement of equipment, supplies, and general
support services.
CHANGES WHICH REQUIRE ONLY PO APPROVAL
Universities of Higher Education and other
Non-Profits
The PO may approve the following:
- Rebudgeting funds for indirect costs to absorb
increases in direct costs.
- Key personnel
- Moving training funds to other categories.
- Subaward, transfer, or contracting out of any
work under the award, unless approved in the
award. Does not apply to the purchase of
supplies, material, equipment, or general
support services
EXCEPTIONS FOR RESEARCH AWARDS
For awards supporting research the prior approvals
are automatically waived unless:
- EPA regulations provided otherwise;
- The assistance agreement provides otherwise;
- Additional Federal funds are required; or
- The change involves a change in the approved
objectives or scope of the project.
10/1/95 5-10
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CHANGES NOT REQUIRING
PRIOR PO APPROVAL OR
FORMAL AMENDMENT
Minor Adjustments to
Methodology or Approach
Minor Adjustments to
Project Budget
Staff Changes
VIEWGRAPH # 5
TITLE: Changes Which Do Not Require Prior PO Approval or
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.
10/1/95 5'11
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VIEWGRAPH # 5
TITLE: Changes Which Do Not Require Prior PO
Approval or Formal Amendment (Continued)
KEY POINTS:
Universities and other nonprofit recipients may also:
Extend the award one-time for up to 12 months, unless
the:
- Terms and conditions of the award prohibit the extension;
- Extension requires additional Federal funds; or
- Extension involves any change in the approved
objectives or scope of the project.
For these extensions, the recipient must notify the Award
Official in writing with supporting reasons and revised
expiration date at least 10 days before the expiration date
specified in the award.
Also, the recipient cannot extend the award to merely use
up unobligated balances.
Carry forward any unobligated balance to subsequent
funding periods, provided the recipient notifies the Award
Official by means of the Financial Status Report.
10/1/95 5-12
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TRANSFERRING AN AWARD
Transfer By Award of
New Assistance
Agreement
Transfer By
Amendment
VIEWGRAPH # 6
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 (called a
"novation"). The PO should contact the GMO if this is to be
used.
- 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.
10/1/95
5.13
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DEVIATIONS
NEED:
• BASIC INFORMATION
• REGULATORY CITE
• CIRCUMSTANCES/JUSTIFICATIONS
• PREVIOUS DEVIATION?
VIEWGRAPH #7
TITLE: Deviations
KEY POINTS:
Recipients are required to comply with all EPA
requirements. In some cases, however, it may be
necessary to deviate from (waive) 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 not required by
statute or Executive Order.
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
for signature.
For deviations for Headquarters awards, the recipient
sends the request directly to PO who forwards the request
with a recommendation to the GMO. The GMO processes
and submits the request to the Director, GAD for signature.
Deviation requests should be submitted as soon as
the need for the deviation is known, NOT AFTER THE
FACT.
10/1/95 5-14
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VIEWGRAPH #7 (Continued)
TITLE: Deviations
KEY POINTS:
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 do, and any pertinent
background information, including a copy of the applicant's
or recipient's request.
- 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.
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 pre-award 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.
10/1/95 5-15
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DISPUTES
• Responsibility for
Disputes Resolution
• Some EPA Action
NOT Subject to Review
VIEWGRAPH # 8
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 formal 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 30);
- National Environmental Policy Act decision (40 CFR Part 6);
- Audit Resolution Board decisions (EPA Order 2750); and
- Debarments/suspensions (40 CFR Part 32).
For Headquarter awards, the disputee may request that the
appropriate Assistant Administrator review the Dispute
Decision Official's decision and render the Agency's final
decision. These requests must be sent directly to the
Assistant Administrator.
10/1/95 5<16
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VIEWGRAPH #8 (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.
10/1/95 5-17
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EPA RESPONSE TO
RECIPIENT PERFORMANCE
• NONCOMPLIANCE AND HIGH
RISK
• PERFORMANCE-BASED
ASSISTANCE POLICY
VIEWGRAPH #9
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.
Noncompliance and High Risk Recipients
To deal with noncompliance or high risk participants, Award
Officials may:
- Impose special conditions on the award,
- Find a person or organization to be non-responsible,
- 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.
10/1/95 5-18
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VIEWGRAPH #9 (Continued)
TITLE: EPA Response to Recipient Performance
KEY POINTS:
Performance Based Assistance
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 L for a copy of the policy.)
The principles and procedures in this policy can be used
and have been applied to other programs.
Internal Coordination
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 Counsel 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.
10/1/95 5-19
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PROJECT OFFICER
ROLES AND
RESPONSIBILITIES
• TECHNICAL EXPERTISE
• DAY-TO-DAY MANAGEMENT OF
THE AGREEMENT
• FOCAL POINT FOR PROGRAMMATIC
ISSUES
VIEWGRAPH4MO
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 work products 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 work products and inform the GMO
when they are received so that the GMO can keep track of
reports and work products in the grant.
Providing comments to the recipient on the progress reports
and other work products 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.
10/1/95 5-20
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VIEWGRAPH # 10 (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).
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.
he 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.
10/1/95 5-21
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GRANTS MANAGEMENT OFFICE
ROLES AND
RESPONSIBILITIES
• ADMINISTRATIVE EXPERTISE
• ASSURE ADMINISTRATIVE
REQUIREMENTS ARE MET
• FOCAL POINT FOR ADMINISTRATIVE
ISSUES
VIEWGRAPHtf 11
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 work products 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
work products 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.
10/1/95 5-22
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RECIPIENT
ROLES AND
RESPONSIBILITIES
• COMPLYING WITH ALL
REQUIREMENTS IN THE
AGREEMENT
VIEWGRAPH#12
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 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 contractors
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.
10/1/95 5-23
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OTHER OFFICE
ROLES AND
RESPONSIBILITIES
• FINANCIAL MANAGEMENT OFFICE
• OFFICE OF GENERAL COUNSEL
• MBE/WBE COORDINATORS
VIEWGRAPH4M3
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 in completed MBE/WBE reports (SF 334,
"MBE/WBE Utilization under Federal Grants, Cooperative
Agreements, and Other Federal Financial Assistance").
10/1/95 5-24
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MODULE VI
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ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE VI
CLOSEOUT
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PURPOSE OF CLOSEOUT
Proper Closeout Ensures the
Completion of All:
Technical Work
Human LMg«
Administrative Work
VIEWGRAPH #1
TITLE: Purpose of Closeout
KEY POINTS:
The closeout process is a systematic method of ensuring that all
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 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 unexpended funds are
deobligated.
• EPA issued a closeout policy for all EPA programs on August 27,
1992. (See Appendix R.)
10/1/95
6.1
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ROLES AND RESPONSIBILITIES
Category
Technical Issues
Financial Issues
Legal Issues
Institutional Issues
(Superfund Clean ups)
Property
Inventions
Recipient Role
• Submits Final Report or
Product(s)
• Submits Final FSR and/or
Final Payment Request
• Completes Cost Recovery
Requirements (Superfund)
• Provides Notification of
Settlements (Superfund)
• Provides Assurance that
Institutional Controls, if
Required, are in Place
• Requests Disposition
Instructions
• Reports Inventions
EPA Role
• PO Provides Comment to Recipients
• PO Notifies GMO of Acceptance or
Rejection
• FMO Settles Billings and Payments
• GMO & PO Review and Approve
Financial Status Report
• GMO Amends Agreement or Issues
Assistance Adjustment Notice
• GMO & FMO Deobligate balances
• GMO & PO Assure All Audit
Exceptions Are Resolved
• GMO & PO Resolve Any Disputes
• GMO Documents Closure in Files
• GMO, PO, & FMO Maintain Official
Records
• PO Disposition of Property
• GMO Provides Disposition
Instructions
• OGC Resolve Patent Interest
• GMO Provides Instructions
VIEWGRAPH #2
TITLE: Roles and Responsibilities
KEY POINTS:
This viewgraph provides an overview of the recipient's
and EPA's roles and responsibilities in the closeout
requirements for assistance agreements.
All assistance agreements are subject to audit.
However, an assistance agreement may be closed out
before an audit takes place. If this is the case, the GMO
should inform the recipient that while the assistance
agreement is being closed out:
- The award may be audited at a later date, and
- The recipient is responsible for maintaining the
records for the length of the record retention period for
that particular program.
10/1/95
6.2
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TIMING OF CLOSEOUT
AGREEMENT TIMING
PROJECT GRANTS
CONTINUATION/CONTINUING
ENVIRONMENTAL PROGRAMS
SUPERFUND
Pre-Remedial
Single Site
Multi-Site
Core Program
ALL
Project Complete
Previous Award Ends
Work Complete
Work Complete
Work Complete at Each
Site, Activity or All Sites
Work Complete
Project Complete,
Terminated or Annulled
VIEWGRAPH #3
TITLE: Timing of Closeout
KEY POINTS:
Formal closeout can occur only when all parties are
satisfied with the final product, all eligible costs have
been accepted, all repayments have been received,
all terms and conditions or Special 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. 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.
Closeout of Continuation and Continuing
Environmental Program grants begins on the date the
previous, (i.e., most recent) Continuation Agreement
expires.
10/1/95
6.3
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VIEWGRAPH # 3 (CONTINUED)
TITLE: TIMING OF CLOSEOUT
KEY POINTS:
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.
Superfund Multi-Site Cooperative Agreement
(MSCA) - is somewhat different from other CAs.
o Closeout of an individual site covered by the
MSCA occurs when all activities at that site are
completed or terminated.
o 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.
10/1/95 6.4
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INITIATING CLOSEOUT
GMOs:
• Obtain Status Report
• Send "Reminder
Letter"
• Update GICS
POs:
• Close out or Extend?
VIEWGRAPH#4
TITLE: Initiating Closeout
KEY POINTS:
Monthly, the GMO should obtain and review 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 are to
send a "Reminder Letter" to remind the recipient and
Project Officer of the closeout requirements. The GMOs will
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.
10/1/95
6.5
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DELIVERY OF PRODUCTS AND REPORTS
THE RECIPIENT MUST DELIVER:
Satisfactory Final
Product
VIEWGRAPH # 5
TITLE: Delivery of Products and Reports
KEY POINTS:
The PO must provide the GMO with written confirmation
that:
• Project is completed;
• Final report/product(s) were submitted and are
satisfactory and comply with Agency Peer and
Publication Review requirements.
- The PO must inform the GMO how property
purchased under the agreement, if any, should be
handled.
• Other reports:
- Invention: If the project resulted in any inventions being
produced, the recipient must report them to the Award
Official. The PO should be aware of any inventions,
and should remind the recipient to report inventions.
- Request for final payment: The PO should remind the
recipient to submit a final SF270, "Request for
Payment," or 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.
- MBE/WBE Reports- SF 334: The recipient must submit
a final report on their contracting with MBE/WBE firms.
10/1/95 6.6
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VIEWGRAPH #5 (Continued)
TITLE: Delivery of Products and Reports
KEY POINTS:
If the recipient used any Federally-owned property, the
recipient must ensure the proper disposal of this 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.
Recommended disposition of funds: remaining funds are
treated differently for Regional and Headquarters
administered awards. Regional POs must inform their 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 so the FMO can
establish an accounts receivable in IFMS. The assistance
agreement cannot be closed out until the debt is paid.
After receiving confirmation from the PO that all
deliverables were received and acceptable, 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.
Peer and Publications Review Requirements.
EPA encourages the independent publication of the results of
its assistance research in appropriate scientific journals as an
important method of recording and reporting scientific
information. Any journal article so published must contain a
disclaimer that even though it has been funded with EPA
funds, it has not been subjected to the Agency's peer and
policy review and does not reflect the views of EPA (See
Appendix S, page 7 for the exact wording of the disclaimer).
10/1/95 6.7
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VIEWGRAPH #5 (Continued)
TITLE: Delivery of Products and Reports
KEY POINTS:
The recipient should send a courtesy copy of the paper
to the EPA PO who is responsible for forwarding it to
the appropriate Office Director, Associate, Assistant, or
Regional Administrator, and the Science Advisor. EPA
Order 2200.4, "Review Process for Scientific, Informational,
and Educational Documents," (see Appendix S) identifies
which documents are exempt from this process (e.g.,
Congressional testimony; press releases; legal opinions;
Requests for Proposals, etc.) and which documents must
go through the process (all scientific, informational, or
educational publications designed for public distribution and
created by an EPA employee, contractor, recipient, or
consultant unless specifically exempted by the Order.)
The PO is responsible for insuring that adequate EPA
review consistent with the rights and data clauses of
EPA assistance agreements is conducted, including the
approvals by appropriate Associate, Assistant, or
Regional Administrators, the Science Advisor, and the
Office of Public Affairs, if necessary.
For all 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.
10/1/95 6.8
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DISPOSITION OF
PERSONAL PROPERTY
•STATE GOVERNMENTS
• LOCAL AND INDIAN TRIBAL
GOVERNMENTS
• UNIVERSITIES AND NONPROFITS
• RESEARCH ENTITIES
VIEWGRAPH #6
TITLE: Disposition of Personal Property
KEY POINTS:
STATE GOVERNMENTS
Equipment: A State will dispose of equipment acquired under an
assistance agreement in accordance with State laws and
procedures.
Supplies: When the award is terminated or completed, or the
supplies are no longer needed for any Federally sponsored
program or project, disposition will be as follows:
- If the aggregate fair market value of the unused supplies
total $5,000 or more, the recipient will compensate EPA for
its proportionate share of the fair market value based on the
cost share ratio in the agreement.
- If the aggregate fair market value is less than $5,000, the
recipient may keep the supplies and is not required to
reimburse EPA.
Local Governments and Indian Tribal Governments
• Equipment: When the original or replacement equipment
acquired under an assistance agreement is no longer needed for
the original project or program or for other activities currently or
previously supported by a Federal agency, disposition will be as
follows:
•\
- Equipment with a fair market value of less than $5,000 may
be retained , sold, or disposed of with no further obligation to
EPA.
- Equipment with a current per unit fair market value of more
than $5,000 may be retained or sold and EPA reimbursed for
its share of the fair market value based on the cost share ratio
in the agreement. EPA may waive reimbursement.
10/1/95 6.9
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VIEWGRAPH#6 (continued)
TITLE: Disposition of Personal Property
KEY POINTS:
Supplies: When the award is terminated or completed, or the
supplies are no longer needed for any Federally sponsored
program or project, disposition will be as follows:
- If the aggregate fair market value of the unused supplies total
$5,000 or more, the recipient will compensate EPA for its
proportionate share of the fair market value based on the cost
share ratio in the agreement.
- If the aggregate fair market value is less than $5,000, the
recipient may keep the supplies and is not required to
reimburse EPA.
10/1/95 6.10
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DISPOSITION OF REAL PROPERTY
• SAME FOR ALL RECIPIENTS
• THREE OPTIONS
VIEWGRAPH #7
TITLE: Real Property Disposition
KEY POINTS:
When real property is no longer needed for the originally authorized
purpose, the recipient must request disposition instructions from
EPA.
Real property must be disposed of using one of the following
options:
- Retain title and compensate EPA;
- Sell the property and compensate EPA; or
- Transfer title to EPA or a third party designated/approved by EPA.
The amount paid to EPA (or to the recipient, if transferred) is
computed by applying EPA's (or the recipient's) percentage
participation in the cost of the original purchase to the proceeds of
the sale after deducting any actual and reasonable selling and fix-up
expenses.
Sales procedures must provide for competition to the extent
practicable and result in the highest possible return.
10/1/95 6.11
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DISPOSITION OF
INTANGIBLE & FEDERALLY-OWNED
PROPERTY
INTANGIBLE
• SAME FOR ALL RECIPIENTS
• FEDERAL GOVERNMENT MAY USE
FEDERALLY-OWNED
• RECIPIENT SENDS LIST TO GMO
• GMO GIVES INSTRUCTIONS FOR
DISPOSITION
VIEWGRAPH #8
TITLE: Disposition of Intangible and Federally-Owned Property
KEY POINTS:
Intangible Property
The same disposition rules apply to all recipients.
Unless waived by EPA, the Federal Government retains a royalty
free, nonexclusive, and irrevocable license to:
- Obtain, reproduce, publish, or otherwise use the data first
produced under an assistance agreement.
- Authorize others to receive, reproduce, publish, or otherwise use
such data for Federal purposes.
Otherwise, the recipient has no obligation to EPA.
Federally-Owned Property
The same disposition rules apply to all recipients.
If the recipient used any Federally-owned property, the recipient
must ensure the property is disposed of before closeout can be
completed.
The recipient must notify the GMO that the property is available
for return to EPA and the GMO will issue disposition instructions to
the recipient.
10/1/95 6.12
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RECORD RETENTION REQUIREMENTS
• Generally 3 years
• Longer for Superfund, Construction
Grants, & State Revolving Fund
• Starts With Final Expenditure
Report
VIEWGRAPH #9
TITLE: Record Retention Requirements
KEY POINTS:
Record Retention Requirements
Record retention requirements apply to all supporting
documentation, including documentation of significant
actions and decisions, cost records, scopes of work,
correspondence, applications, pre-award reviews, and
funding decisions.
The record retention requirements begin with the date the
recipient submits the final expenditure report. For most
programs the expenditure report is the SF-269, Financial
Status Report," but for reimbursement programs, the
expenditure report is either the SF 270, "Request for
Advance or Reimbursement," or the SF 271, "Outlay
Report and Request for Reimbursement for Construction
Programs."
Record Retention Period
All Programs Except Superfund. the Wastewater Treatment
Construction Grants Program, and the State Revolving
Fund Program
Recipients must keep records for three (3) years after the
date they submitted the final SF 269, "Financial Status
Report (FSR)."
10/1/95 6.13
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VIEWGRAPH #9 (Continued)
TITLE: Record Retention Requirements (Continued)
KEY POINTS:
Superfund:
Site specific awards:
- 7 years after the date the recipient submits the final FSR (SF
269), if not used for cost recovery,
- 30 years after the date the recipient submits the final FSR
(SF 269), if used for cost recovery.
Technical Assistance Grants (TAG): 3 years after the date the
recipient submits the final FSR (SF 269).
Non-site specific awards: 7 years after the date the recipient
submits the final FSR (SF 269).
Wastewater Treatment Construction Grants
Recipients must keep records for twenty (20) years after the
date the recipient submits the final SF 271.
State Revolving Fund Grants
Recipients must keep records for twenty (20) years after the
date the recipient submits the final FSR (SF 269).
Start Date of Record Retention Period
The start date for Project grants (except Wastewater
Construction grants) is the date the recipient submits the final
FSR (SF 269). (The FSR is final only when there are zero (0)
dollars in the "Unliquidated Obligations" column.)
For all Continuation grants (including Continuing
Environmental Program grants), the start date begins with the
date the recipient submits its last FSR (SF 269) for the period
covered in the agreement.
For the State Revolving Fund grants, the start date is the
date the recipient submits the final FSR (SF 269).
For Wastewater Treatment Construction grants, the start
date is the date the recipient submits the final request for
payment SF 271.
Also, if a litigation, claim, negotiation, audit, or other action
involving the records was started before the end of the
retention period, the recipient must keep records until either
the completion of the action and resolution of all issues which
arise from it, or until the end of the established retention
period, whichever is later.
10/1/95 6.14
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PROJECT OFFICER
ROLES AND
RESPONSIBILITIES
CERTIFY ALL WORK PRODUCTS
SUBMITTED
RECOMMEND DISPOSITION OF
PROPERTY
RESPOND TO OIG QUESTIONS
VIEWGRAPH010
TITLE: Project Officer Responsibilities
KEY POINTS:
In this phase, the PO is responsible for:
Certifying to the GMO within 90 days of project completion,
that all project activities were satisfactorily completed and
all work products submitted as required in the agreement.
Providing assistance as necessary to recipients and the GMO
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.
10/1/95 6.15
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GRANTS MANAGEMENT OFFICE
ROLES AND
RESPONSIBILITIES
• INITIATE CLOSEOUT
• INFORM OIG OF PENDING
CLOSEOUT, IF REQUIRED
• DEOBLIGATE FUNDS
• RESPOND TO OIG QUESTIONS
VIEWGRAPH#11
TITLE: Grants Management Office Roles and
Responsibilities
KEY POINTS:
In this phase, the GMO is responsible for:
Initiating the closeout process by sending the recipient and
PO a reminder letter 90 days before the project period expires.
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 the
recipient complies with the recommendations.
10/1/95 6.16
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OTHER PLAYER'S
ROLES AND
RESPONSIBILITIES
• RECIPIENT
• SFO/FMO
VIEWGRAPH#12
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 Servicing Finance Office (SFO) is
responsible for:
Reviewing the Integrated Financial Management
System (IFMS) record 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.
10/1/95 6.17
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MODULE VII
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ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE VII
AUDIT
-------
AUDITS
THIS MODULE DESCRIBES:
• THE BASIC AUDIT PROCESS
THE P0fs ROLE IN THE AUDIT
PROCESS
VIEWGRAPH #1
TITLE: Audits
KEY POINTS:
The Inspector General Act authorizes the Inspector General
(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.
10/1/95 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
part 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 (EPA OIG).
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 or universities and nonprofits that
are performed in accordance with OMB Circular A-128 (for
States, local governments, and Indian tribes), or OMB
Circular A-133 (for universities and other nonprofits). The
cost of a Single Audit is an allowable cost. Applicants
should either include audit costs in their indirect cost
rate or, if the cost is not included in the indirect cost
rate, as a direct cost to the grant.
10/1/95
7.2
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VIEWGRAPH # 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 allowability 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 program
office, GMO, or Award Official when considered
necessary. These requests should be made on EPA Form
5700-29, "Assistance Audit Request." The PO may submit
the form directly to the appropriate Divisional Office of
the Assistant Inspector General of Audits (DIGA), but to
the extent possible, the POs should coordinate requests
for audits with the GMO. The OIG Hotline number is
1 -800-424-4000 for all non-Government locations outside the
Washington metropolitan local calling area; and
202-260-4977 from all Government locations in the
Washington metropolitan calling area.
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.
10/1/95 7.3
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AUDIT OFFICIALS
• Inspector General
• Agency Audit
Follow-up Official
• Audit Follow-up
Coordinator
• Disputes Decision
Official
• Action Official
VIEWGRAPH # 3
TITLE: Audit Officials
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. These individuals are designated
by the Regional Administrators or Assistant Administrators.
The Disputes Decision Official (DDO) is the individual
identified by the Award Official to be responsible for resolving
all action regarding recipients.
The Action Official is responsible for responding (on behalf of
the audited organization) to the draft and final reports and for
all actions required to deal with the specific OIG report. For
grants and cooperative agreements, it is the Disputes
Decision Official.
10/1/95
7.4
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THE AUDIT PROCESS
| Entrance Conference "|
t
| Advisement of Findings |
f
| Draft Report |
t
| Exit Conference |
t
| Final Report |
Audit Resolution
VIEWGRAPH #4
TITLE: The Audit Process
KEY POINTS:
Entrance Conference. 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. Logistical issues are addressed, such as access to records,
working space requirements, and who will be interviewed.
All personnel with extensive knowledge of the area being
audited should be at the entrance conference. The OIG will
ask for program and GMO contacts for the audit, and will provide a
list of key audit personnel.
Also, have the OIG state in writing the objectives of the audit.
• Advisement of findings. During the audit, the auditors should
provide the organization with feedback about preliminary findings
and developing issues. If any of these findings are inaccurate,
based on factual information, you should immediately discuss
your concerns with the lead auditor and explain your
interpretation of the situation. Conversely, if any of the
preliminary findings are accurate, you should immediately
begin to take corrective action. Further, significant or sensitive
findings should be brought to the attention of the organization's
senior management immediately.
10/1/95 7.5
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VIEWGRAPH # 4 (continued)
TITLE: The Audit Process
KEY POINTS:
Draft Report. A draft report is usually issued shortly after the audit is
completed. The report contains the auditor's findings and
documentation to support these findings. Agency management is
expected to provide a written response to the audit findings
contained in the draft report within 30 days, either concurring with
the findings or providing explanations for any disagreements with the
findings. Any planned or implemented corrective actions should be
documented in the response.
The PO's and GMO's goal should be to resolve the audit
finding(s). You should not concentrate solely on writing a response
to the report. As soon as a problem is identified, it is important to
start corrective actions. By starting corrective actions
immediately, you may be able to resolve the audit finding(s)
before the final audit report is issued and avoid having to
respond to the finding(s) in your response to the final audit
report.
• Exit Conference. At the exit conference, the auditors discuss the audit
findings with the organization to clarify any questions they may have
about the audit. If possible, auditors and management should try to
reach agreement on the audit results.
Final report. The final report contains the auditor's findings and
recommendations. It should reflect the pertinent information obtained
from the audit and from the discussions with Agency management
throughout the audit process.
Audit resolution. 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). If the
questioned costs are $100,000 or more, the Action Official must
obtain the concurrence of the EPA OIG on proposed corrective action.
If the questioned costs are less than $100,000, management does not
have to get OIG concurrence before issuing the decision.
Under the Inspector General Act Amendments, EPA management
must track audit follow-up actions until all corrective actions 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.
10/1/95 7.6
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SURVIVING AN AUDIT
• DOCUMENTATION
• COURTESY
• PREPARATION
• COMMUNICATION
VIEWGRAPH #5
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 PO must document in the official Project File all
decisions, communications, memos, etc. from the
beginning of the agreement (see Appendix Q). The
auditors will assume 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.
The following list of documents may be helpful to identify the
project management records needed by the auditors:
- Applications, agreements, amendments, contracts and
subcontracts;
- Accounting records, including disbursements of funds,
travel, records of in-kind contributions, etc.
- Copies of performance reports and any other reports or
products developed under the agreement.
- Copies of Financial Status Reports or any requests for
reimbursements.
10/1/95 7.7
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VIEWGRAPH #5 (Continued)
TITLE: Surviving an Audit
KEY POINTS:
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.
Preparation.
- Determine what auditors will look for.
- Cooperate & demonstrate steps already taken to
resolve issues or 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 issues; give
auditors all data they request.
- Advise auditors of matters which you believe they
should review during the audit.
10/1/95 7.8
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DOS AND DONTS
VIEWGRAPH #6
TITLE: Dos and Don'ts
KEY POINTS:
DO
• Cooperate with the auditors.
Question an auditor if you believe they
are wrong.
Point out factual errors.
DON'T
Hide or destroy information, documents,
or any records.
• Take an audit or audit findings lightly.
Confuse facts with opinion.
10/1/95 7.9
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MODULE VIII
-------
ASSISTANCE
PROJECT OFFICERS
TRAINING COURSE
MODULE VIII
INTERAGENCY AGREEMENTS
-------
DEFINITION OF AN IAG
AGREEMENT BETWEEN EPA AND A
FEDERAL AGENCY, STATE, OR
LOCALITY.
IAGS PROVIDE:
• GOODS OR SERVICES IN
EXCHANGE FOR FUNDS,
• MISSION SUPPORT OR
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.
There are 2 participants in lAGs:
- "Ordering Agency," which pays for the goods or services
under a "funds in" agreement, and
- "Servicing Agency," which provides the goods or services
under a "funds out" agreement.
• lAGs are not assistance agreements. They are used for
different purposes. However, the PO's monitoring
requirements are the same.
There is no application form. lAGs are prepared and
submitted to GAD on EPA Form 1610-1, "Interagency
Agreement/Amendment." (See Appendix T for a sample with
instructions and GAD's guidance for completion.)
lAGs are subject to the "Servicing Agency's" rules and
regulations and to any special conditions the "Ordering
Agency" places on the IAG, e.g., MBE/WBE requirements,
Superfund audit.
10/1/95 8.1
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VIEWGRAPH # 1 (Continued)
TITLE: Definition of an IAG
KEY POINTS:
EPA can provide funds directly to States and local
governments only under an assistance agreement.
THERE ARE FOUR (4) TYPES OF IAGS
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. (See
Appendix T for a sample IAG.)
lAGs where funds are exchanged involve either:
- One agency providing goods or services to another agency,
or
- Both agencies having a mutual need for the goods or
services and sharing in the costs incurred.
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's labs, (e.g., Lawrence Livermore) are
considered components of the Federal government and,
therefore, eligible to receive lAGs. (The District of Columbia is
not a Federal agency.)
"Policy Agreements or Memorandums of Understanding"
These are lAGs where no funds change hands. 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 oversee a cleanup at
a Federal facility.
Intergovernmental Agreements
These are agreements between a Federal agency and a State
or local government under which the State or local
government reimburses the Federal agency 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.
10/1/95 8.2
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VIEWGRAPH #1 (Continued)
TITLE: Definition of an IAG
KEY POINTS:
International Agreements.
These are agreements under which work will be
conducted for a foreign government or international
organization. EPA uses the EPA IAG form for these
agreements.
The Office of International Activities (OIA) must be involved
as soon as practicable after the need for international
agreements is known.
• The OIA must approve every international agreement.
The OIA is responsible for obtaining State Department and
the Trade Development Agency's approval when the IAG
includes international activities. OIA must also obtain the
Office of General Counsel's approval.
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. However,
EPA can use one of our Cooperation Authorities to join with
other Federal agencies to provide goods or services to
foreign governments through contracts or assistance
agreements as long as both EPA and the other agency
have responsibility/authority for the proposed project. For
example, EPA provided waste water treatment equipment
for Poland by transferring the funds to the Corps of
Engineers which did the purchasing and accepted delivery
of the equipment in Poland.
EPA can accept funds directly from foreign governments
and organizations to provide services. These "foreign"
agreements are authorized by the Foreign Assistance Act
and must be approved by the Trade Development Agency.
10/1/95 8.3
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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 Economy Act is the general authority under which Federal
agencies exchange goods and services and 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 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 the Economy Act, both Federal agencies must be
inherently responsible for conducting the proposed activities
and authorized to use their appropriation for the work. Under
these lAGs, a Federal Agency may provide the services or goods
with its own staff or through agency contracts.
The Economy Act is to be cited as the authority for an IAG
only if:
- The IAG involves one agency "providing goods or services" to
another agency. That is, the performing agency has no need for
the goods and services and would not have bought the goods or
done the work but for the request of the funding agency.
- The amount of the IAG equals the total estimated cost of the
goods and services, including all direct and indirect costs.
(Indirect costs may be included only if the providing agency has
an indirect cost rate. At this time EPA does not.)
- None of the funds will be used for a grant or cooperative
agreement.
10/1/95 8.4
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VIEWGRAPH # 2
TITLE: Authority (Continued)
KEY POINTS:
- The ordering agency will be able to perform the service or
obligate the funds within the period of fund availability. If the
ordering agency will be using a contractor to carry out the
work, the contract or task order must be awarded within the
period of availability (i.e., before the end of the contract or
project period.)
- The Approval Official has determined the requested services
cannot be provided as conveniently or cheaply by a
commercial enterprise. (This determination is not necessary if
the servicing agency will use a contractor to provide the goods
or services.)
- The Approval Official has determined the costs of the goods or
services are reasonable.
- The Ordering Agency must also determine the work does not
conflict with any other agency's authority or responsibility.
If the other agency cites the Economy Act, and the PO is unsure
the activities are eligible under the requirements of the Act, the
PO should contact OGC/ORC.
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 ordering agency will use any of the funds to
award a grant or cooperative agreement, the EPA Form 1610-1
must identify EPA's statutory authority to "cooperate" with the
other agency.
One or more of EPA's cooperation authorities must be listed as
the authority when the project is a joint effort of the involved
agencies. Cooperation authorities should be cited if the following
statements are true:
- The project is directly related to the needs and interest of both
agencies.
- Both agencies are committing resources to the project,
whether in the form of grant/cooperative agreement funds,
salaries, equipment, travel, or contract services.
10/1/95 8.5
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VIEWGRAPH #2 (Continued)
TITLE: Authority
KEY POINTS:
- The work is eligible under one or more of EPA's
cooperation authorities.
- If any of the funds will be used for a grant or cooperative
agreement, both of the following conditions must be met:
(1) The relationship between the recipient and the
ordering agency must be one of assistance.
(2) Both agencies must have legal authority to award the
grant or cooperative agreement.
Current EPA cooperation authorities include:
- Clean Water Act, §104(b)(2);
- Clean Air Act, §103(b)(2);
- RCRA, §8001;
- TSCA, §10(d) and §26 (funds out only);
- FIFRA,§10,§20,and§22;
- CERCLA, §105(4), and §115 (together with EO 12316);
and
- Marine Protection, Research, and Sanctuaries Act, §203.
• The Safe Drinking Water Act does not have cooperation
authority for lAGs, but projects involving drinking water
protection can be authorized under one or more of the
statutes listed above, except CERCLA.
INTERGOVERNMENTAL COOPERATION ACT
The Intergovernmental Cooperation Act is the general
authority which allows State and local governments to
obtain goods/services from the Federal government. It
authorizes, in part, an Intergovernmental Agreement
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.
10/1/95 8.6
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VIEWGRAPH #2 (Continued)
TITLE: Authority
KEY POINTS:
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 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.) For example, 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.
OTHER AUTHORITIES
Many other agencies have IAG authorities similar to EPA's
cooperation authorities. EPA can generally accept the
other agency's citation as authority for the IAG (e.g., the
Brooks Act for computer services with the General Service
Administration). The PO should contact OGC/ORC or GAD
as soon as they are aware of such circumstances.
INTERNATIONAL AUTHORITIES
• The authority to use either funds-in or funds-out
international lAGs with other Federal agencies is either the
Economy Act or EPA's cooperation authorities and
§102(2)(F) of the National Environmental Policy Act.
• The authority for funds-in agreements with foreign
governments or international organizations (not technically
lAGs, but use the IAG form) is §607 of the Foreign
Assistance Act (22 U.S.C. 2357).
10/1/95 8.7
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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. The"lnteragency Agreement Policy
and Procedures 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 appropriations law. For example, EPA can
not use an IAG to augment EPA's appropriations. We must
use funds only for the purpose they were appropriated and
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 IAG EPA-wide guidance is developed by the Grants
Administration Division. Program offices may develop
office-specific procedures where appropriate.
GAD draft guidance for preparing an IAG Decision
Memorandum and several other memoranda which update IAG
policy are included in Appendix T.
10/1/95 8.8
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AVAILABILITY OF FUNDS
• APPROPRIATION UNDER
THE ECONOMY ACT
PROJECT PERIOD FOR
COOPERATION PROVISIONS
VIEWGRAPH#4
TITLE: Availability of Funds
KEY POINTS:
ECONOMY ACT IAGS
lAGs which cite the Economy Act for authority are subject to
the limits of availability established for each appropriation
(e.g., Superfund, ACC, Research, etc.) from which the
funds come.
- If the funds are used for personnel, travel, or other
expenses (e.g., supplies), the funds expire when the
appropriation expires or when the project period
ends, whichever comes first. This is true even if the
planned work is not complete.
- If the funds are obligated to a contract, they are
available for expenditure until the contract or the
project period ends, whichever comes first.
COOPERATION PROVISION IAGS
Funds for lAGs which cite the cooperation provisions of
EPA's statutes for authority are available until the project
period ends. This means all funds used for activities in the
approved workplan (e.g., personnel, travel, and other
expenses, as well as funds used for contracts and grants
and cooperative agreements) can be spent even after the
appropriation(s) expires.
10/1/95 8.9
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DECISION MEMORANDUM
• REQUIRED
• MUST ADDRESS SPECIFIC
AREAS
VIEWGRAPH # 5
TITLE: Decision Memorandum
KEY POINTS:
A Decision Memorandum is required with every IAG.
The Decision Memorandum must be signed by the Approval
Official (generally the Allowance Holder) or their designee.
Contents of the Decision Memorandum
Summarizes EPA's objectives to be met through the
proposed IAG and certifies 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.
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.
10/1/95 8.10
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VIEWGRAPH # 5
TITLE: Decision Memorandum
KEY POINTS:
If IAG funds will be used for a grant or cooperative
agreement, the funding package must include a
statement from the EPA PO that the principle purpose of
the work is to support or stimulate the recipient to
accomplish a public purpose and not for the direct use
and benefit of the Federal government. For a funds-out
agreement, the funding package must include a similar
statement from the other agency's PO. The Decision
Memorandum must cite both EPA's and the other
agency's grant making authority.
For lAGs with other Federal agencies which involve
international work and for funds-in agreements with
foreign governments or international organizations, the
Decision Memorandum mist include a statement the
project has been reviewed and approved by Office of
General Counsel/Office of Regional Counsel and the
Office of International Activities,(OIA). OIA will obtain
necessary clearance from the US Trade and
Development Agency for agreements with foreign
governments and international organizations.)
10/1/95 8.11
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CINCINNATI FINANCIAL
MANAGEMENT CENTER
• RECORDS OBLIGATIONS
• PROCESSES PAYMENT REQUESTS
• DEOBLIGATES UNUSED
FUNDS
VIEWGRAPH#6
TITLE: Cincinnati Financial Management Center
KEY POINTS:
The Cincinnati Financial Management Center (CFMC) is the
Servicing Financial Management Office for all lAGs.
Funds-Out IAGS: CFMC records obligations in the
Integrated Financial Management System (IFMS). CFMC
will not obligate funds until the other agency accepts
the IAG and returns a signed copy of the forms to GAD.
Because GAD provides copies of the signed IAG to CFMC,
the IAG specialists will call at the end of the year to enlist
your aid in getting documents returned from other agencies.
If the other Agency does not accept an IAG before the end
of the Fiscal Year, the process must be started again. Also,
if the proposed IAG is using expiring appropriations,
the funds will be lost unless the IAG is signed by both
Agencies before the end of the Fiscal Year.
Funds-ln IAGS: CFMC establishes accounts and assigns
account numbers for other agencies' funds.
CFMC and GMOs work together to close out lAGs and
deobligate unused funds.
10/1/95 8.12
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PAYMENT/BILLING
TWO PAYMENT SYSTEMS
BILLING SYSTEM
INDIRECT COSTS
YIEWGRAPH #7
TITLE: Payment/Billing
KEY POINTS:
Payments
Payments under lAGs are made under one of the following
systems. EPA may use either system, depending upon the
other Agency's payment system.
Reimbursement Reimbursement is the most frequently used
method of payment. Under this method, the billing agency
(i.e., Servicing Agency) submits an itemized bill to the
Cincinnati Financial Management Center (CFMC) on a SF
1080/1081, or the On-Line Payment and Collection system
(OPAC).
SF 1080/1081 billing system: Agencies not using the
OPAC billing system use an SF 1080 or SF 1081 to
request payment. (The Department of Defense uses a SF
1080, and other Agencies use the SF1081.) When CFMC
receives a payment request, they will send the EPA PO
an IAG Invoice Approval Form (EPA Form 2550-21). The
PO must sign and return to CFMC the EPA Form 2550-21
(IAG Invoice Approval) before CFMC will release a
payment (through a Treasury check).
OPAC billing system: The OPAC is an on-line system
maintained by the Department of Treasury that allows
agencies to obtain funds as soon as they are needed.
Treasury immediately transfers payments under this system
to the Servicing Agency. CFMC charges the bill to the
appropriate IAG and sends the PO an EPA Form 2550-21
to approve the request. If there is a problem with the
bill, EPA has 90 days to charge back to the account.
10/1/95 8.13
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VIEWGRAPH #7 (Continued)
TITLE: Payment/Billing
KEY POINTS:
Advance. Agencies with Working Capital funds may request
payment in advance. In this case, the Servicing Agency
may bill for the entire amount of the IAG as soon as the
obligation is recorded in IFMS. It must then submit quarterly
cost reports to CFMC. POs should assure they receive
copies of these reports from CFMC.
Billing
After EPA accepts funds-in lAGs, EPA must bill the Ordering
Agency as EPA incurs costs. POs must assure that all
charges to the project under a funds-in IAG are charged
to the IAG account. POs must ensure that each funding
document (e.g., travel order, contract, assistance
agreement, and personnel charge) reflects the
appropriate account number from the IAG.
EPA will bill the other Agency in accordance with the terms
of the IAG, but at least quarterly.
POs must prepare a Report of Reimbursable Services
Rendered (EPA Form 2550-8) to allow EPA to bill the
Ordering Agency. When completed, the PO sends the
Form to CFMC.
Indirect Costs
To claim indirect costs, a Federal Agency must have an
approved indirect cost rate.
Because EPA does not have an approved indirect cost rate,
we cannot claim indirect costs under an IAG.
10/1/95 8.14
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EPA REQUIREMENTS
• ASSISTANCE VS ACQUISITION
• TRAVEL
• MBE/WBE
• SUPERFUND COST RECOVERY
AND AUDIT
• INDIRECT COST
VIEWGRAPH # 8
TITLE: EPA Requirements
KEY POINTS:
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 the Office of Small and
Disadvantaged Business Utilization.
• lAGs which include Superfund monies must include a
condition on record keeping and cost recovery. Also, all
Superfund expenditures by other agencies must be audited by
their Office of Inspector General annually.
• If an IAG budget includes indirect costs, the IAG must include
an indirect cost condition.
10/1/95 8.15
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PROJECT OFFICER
RESPONSIBILITIES
• WORK CONSISTENT WITH EPA'S MISSION
• NEGOTIATE SCOPE OF WORK, FUNDING
AND BUDGET
• OBTAIN NECESSARY APPROVALS
• PREPARE FUNDING PACKAGE
• ASSURE PERFORMANCE
• REVIEW AND APPROVE PAYMENT REQUESTS
• CLOSE OUT AGREEMENTS
VIEWGRAPH # 9
TITLE: Project Officer Responsibilities
KEY POINTS:
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 Program Office must assign a PO
to negotiate the work EPA and the other agency will perform.
Both agency's POs should negotiate the estimated cost the IAG.
The estimate must reflect all substantial costs necessary to
carry out the project, e.g., personnel, equipment, extramural
agreements, and travel.
After the scope of work is determined, the PO must prepare a
Decision Memorandum.
The Decision Memorandum must be signed by the Approval Official
(the individual in the program office delegated the responsibility for
approving the office's use of funds -- generally the Allowance
Holder.)
If the IAG includes international activities, the PO must obtain
the approval of the Office of International Activities.
For funds-out lAGs, the program office must prepare a Commitment
Notice which approves funds for the IAG. GMO staff will verify
(prevalidate) the commitment in the IFMS Automated Document
Control Register (ADCR) before award.
10/1/95 8.16
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VIEWGRAPH # 9 (Continued)
TITLE: Project Officer Responsibilities
KEY POINTS:
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 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 I A G 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. POs should also
report poor performance (in writing) to the GMO.
10/1/95 8.17
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GMO RESPONSIBILITIES
• PREVALIDATE COMMITMENT
• PREPARE AWARD
• SIGN IAG AND DISTRIBUTE
• MONITOR PROJECT TO
ASSURE TIMELY
COMPLETION AND CLOSEOUT
VIEWGRAPH#10
TITLE: GMO Responsibilities
KEY POINTS:
In reviewing funding packages, the GMO will:
- Assure that all required information is included;
- Proper authorities are cited; and
- Prevalidate the commitment in the IFMS Automated Document
Control Register (ADCR) before award.
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.
The GMO will ensure that information on lAGs is included in the
Grants Information and Control System (GIGS). GMOs can provide
reports on lAGs in many forms. If a PO wants a report, they should
contact their GMO.
The GMO staff will prepare a transmittal letter and submit the
documents to the Award Official for signature, send the IAG to the
other Agency for signature, and distribute copies (e.g., PO, Budget,
other Agencies, Cincinnati).
- In Headquarters, the Award Officials are the Chiefs of the Grants
Operations Branches, GAD.
- In the Regions, the Award Officials are the Regional Administrators
or their designees.
The GMO staff maintains the official IAG file, and the PO maintains
files which document their project management activities.
When lAGs are completedf the GMO will work with the PO to
assure that the IAG is closed out in a timely manner.
10/1/95 8.18
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APPENDIX A
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APPENDIX A
FEDERAL GRANT AND COOPERATIVE
AGREEMENT ACT
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PUBLIC LAW 95-224—FEB. 3, 1978
92 STAT. 3
Public Law 95-224
95th Congress
An Act
To distinguish Federal grant and cooperative agreement relationships from Feb. 3. 1978
Federal procurement relationships, and for other purposes. [H.R. 7691]
Be it enacted by the Senate and House of Representatives of the
United State* of America in Congress assembled, That this Act be Federal Grant
cited as 'he "Federal Grant and Cooperative Agreement Act of "<* Cooperative
. Agreement Act of
1977.
FINDINGS AND PURPOSE 41 usc
SEC. 2. (a) The Congress
(1) there is a need to distinguish Federal assistance relation-
ships from Federal procurement relationships and thereby to
standardize usage and clarify the meaning of the legal instru-
ments which reflect such relationships;
(2) uncertainty as to the meaning of such terms as "contract",
"grant", and "cooperative agreement" and the relationships they
reflect causes operational inconsistencies, confusion, inefficiency,
and waste for recipients of awards as well as for executive agen-
cies; and
(3) the Commission on Government Procurement has docu-
mented these findings and concluded that a reduction of the exist-
ing inconsistencies, confusion, inefficiency, and waste is feasible
and necessary through legislative action.
(b) The purposes of this Act are—-
(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 better understanding of Federal spending and help elimi-
nate unnecessary administrative requirements on recipients of
Federal awards;
(2) to establish Government-wide criteria for selection of appro-
priate legal instruments to achieve uniformity in the use by the
executive agencies of such instruments, a clear definition of the
relationships thev reflect, and a better understanding of the
responsibilities of the parties;
(3) to promote increased discipline in the selection and use of
types of contract, grant agreement, and cooperative agreements
and to maximize competition in the award of contracts and
encourage competition, where deemed appropriate, in the award
of grants and cooperative agreements; ana
(4) to require a study of the relationship between the Federal
Government and grantees and other recipients in Federal assist-
ance programs and the feasibility of developing a comprehensive
system of guideline for the use of grant and cooperative agree-
ments, and other forms of Federal assistance in carrying out such
programs.
41 USC 501.
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92 STAT. 4 PUBLIC LAW 95-224—FEB. 3, 1978
DEFINITIONS
41 USC 502. SEC, 3. As used in this Act, the term—
(1) "State government" means any of the several States of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, any territory or possession of the United States, any
agency or instrumentality of & State, and any multi-State,
regional, or interstate entity which has governmental functions;
(2) "local government" means any unit of government within
a State, a county, municipality, city, town, township, local public
authority, special district, intrastate district, council of govern-
ments, sponsor group representative organization, other inter-
state government entity, or any other instrumentality of a local
government;
(3) "other recipient" means any person or recipient other than
a State or local government who is authorized to receive Federal
assistance or procurement contracts and includes any charitable
or educational institution;
(4) "executive agency" means any. executive department as
defined in section 101 of title 5, United States Code, a military
department as defined in section 102 of title 5, United States Code,
an independent establishment as defined in section 104 of title 5,
United States Code (except that it shall not include the General
Accounting Office), a wholly owned Government corporation;
and
(5) "grant or cooperative agreement" does not include any
agreement under which only direct Federal cash assistance
to individuals, a subsidy, a loan, a loan guarantee, or insurance is
provided.
USE OF CONTRACTS
41 USC 503. SEC. 4. Each executive agency shall use a type of procurement con-
tract as the legal instrument reflecting a relationship between the
Federal Government and a State- or local government or other
recipient—
fi) 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 us® of a type of procurement contract is
appropriate.
USE OF GRANT AGREEMENTS
41 USC 504. Ssc. 5. Each executive agjency shall use a type of grant agreement as
th® legal instrument reflecting a relationship between the Federal Gov-
ernment and a State or local government or other recipient whenever—
Trangfers. (l) 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 pub-
lic purpose of support or stimulation authorized by Federal
statute, rather than acquisition, by purchase, lease, or barter, of
Sroperty or services for the direct benefit or use of the Federal
overnment; and
(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.
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PUBLIC LAW 95-224—FEB. 3, 1978
92 STAT. 5
USE OF COOPERATIVE AGREEMENTS
SEC. 6. Each executive agency shall use a type of cooperative agree- 41 USC 505.
ment as the legal instrument reflecting a relationship between the Fed-
eral Government and a State or local government or other recipient
whenever—
(1) the principal purpose of the relationship is the transfer of Transfer*.
money, property, services, or anything of value to the State or
local government or other recipient to accomplish a public pur-
pose 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 rse of the Federal Govern-
ment; and
(2) substantial involvement is anticipated between the execu-
tive agency, acting for the Federal Government, and the State or
local government or other recipient during performance of the
contemplated activity.
AUTHORIZATIONS
SEC. 7. (a) Notwithstanding any other provision of law, each execu-
tive agency authorized by law to enter into contracts, grant or coopera-
tive agreements, or similar arrangements is authorized and directed to
enter into and use types of contracts, grant agreements, or cooperative
agreements as required by this Act
(b) The authority to make contracts, grants, and cooperative agree-
ments for the conduct of basic or applied scientific research at non-
profit institutions of higher education, or at nonprofit organizations
whose primary purpose is the conduct of scientific research shall
include discretionary authority, when it is deemed by the head of the
executive agency to be in furtherance of the objectives of the agency,
to vest in such institutions or organizations, without further obliga-
tion to the Government, or on such other terms and conditions as
deemed appropriate, title to equipment or other tangible personal
property purchased with such funds.
STUDY OP FEDERAL ASSISTANCE PROGRAMS
SEC. 8. The Director of the Office of Management and Budget, in
cooperation with the executive agencies, shall undertake a study to
develop a better understanding of alternative moans of implementing
Federal assistance programs, and to determine the feasibility of devel-
oping a comprehensive system of guidance for Federal assistance
programs. Such study shall include a thorough consideration of the
findings and recommendations of the Commission on Government
Procurement relating to the feasibility of developing such a system.
The Director shall consult with and to the extent practicable, involve
representatives of the executive agencies, the Congress, the General
Accounting Office, and State and local governments, other recipients
and other interested members of the public. The result of the study
shall be reported to the Committee on Government Operations of the
House of Representatives and the Committee on Governmental Affairs
of the Senate at the earliest practicable date, but in no event later than
two years after the date of enactment of this Act. The report on the
study shall include ( 1 ) detailed descriptions of the alternative means
of implementing Federal assistance programs and of the circumstances
thp. use of each a D Dears to be most desirable, (2) detailed
Contracts, grant
or cooperative
agreements.
41 USC 506.
Scientific
research.
41 USC 507.
Contents.
Consultation.
Report to
congressional
committees.
n
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92 STAT. 6
41 USC 508.
Repeal; effective
date.
41 USC 501 note.
41 USC 509.
Excepted
transactions.
41 USC 501 note.
Expiration date.
PUBLIC LAW 95-224-FEB. 3, 1978
descriptions of the basic characteristics and an outline of such compre-
hensive system of guidance for Federal assistance programs, the devel-
opment of which may be determined feasible, and (3) recommendations
concerning arrangements to proceed with the full development of such
comprehensive system of guidance and for such administrative or
statutory changes, including changes in the provisions of sections 3
through 7 of this Act, as may be deemed appropriate on the basis of the
findings of the study.
GUIDELINES
SEC. 9. The Director of the Office of Management and Budget is
authorized to issue supplementary interpretative guidelines to promote
consistent and efficient use of contract, grants agreement, and coopera-
tive agreements as defined in this Act.
REPEALS AND SAVINGS PROVISIONS
SEC. 10. (a) The Act entitled "An Act to authorize the expenditure
of funds through grants for support of scientific research, and for other
purposes", approved September 6, 1958 (72 Stat. 1793; 42 U.S.C. 1891
and 1892), is repealed, effective one year after the date of enactment of
this Act.
(b) Nothing in this Act shall be construed to render 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 establishment of a single
relationship between the Federal Government and a State or local
government or other recipient on a jointly funded project, involving
funds from more than one program or appropriation where different
relationships would otherwise be appropriate for different components
of the project.
(d) The Director of the Office of Management and Budget may
except individual transactions or programs of any executive agency
from the application of the provisions of this Act. This authority shall
expire «^ne year after receipt by the Congress of the study provided for
in section 8 of this Act.
Approved February 3, 1978.
LEGISLATIVE HISTORY:
HOUSE REPORT No. 95-481 (Comm. on Government Operations).
SENATE REPORT No. 95-449 accompanying S. 431 (Comm. on Governmental Affairs).
CONGRESSIONAL RECORD:
Vol. 123 (1977): Sept 27, considered and passed House.
Oct. 1, considered and passed Senate, amended, in lieu of S.
431.
Vnl 19d nQ7R\- Tan. 10 HOM<»*« »«»r*»<»rl to Senate amendment.
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APPENDIX B
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APPENDIX B
EPA ORDER 5700.1, "POLICY FOR
DISTINGUISHING BETWEEN ASSISTANCE
AND ACQUISITION"
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&EPA
Classification No.: 5700.1
Approval Date: 3/22/94
POLICY
FOR DISTINGUISHING BETWEEN
ASSISTANCE AND ACQUISITION
1. PURPOSE AND 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 and laboratories. This policy expands on the
December 2, 1992 memorandum from the Assistant Administrator for
Administration and Resources Management on "When to Use Contracts
or Cooperative Agreements, and Grants" and the EPA Assistance
Administration Manual, Chapter 1.
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 (GAD)
Grants Policy and Procedures Branch regarding the contents.
2. BACKGROUND. Various 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 seq..) established
government-wide 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
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EPA ORDER 57XX XXX
XXXXXX
and assistance relationships. Specifically, Congress was concerned
that agencies were misusing 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 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.
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3. POLICY. EPA offices and laboratories 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 or laboratory'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
and laboratories 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 and laboratories 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 or
laboratory determines that specific public needs can be satisfied
best by using the procurement process). Offices and laboratories
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.
4. 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 subseguent Redelegations. The Award Official
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for grants and cooperative agreements at Headquarters is the Branch
Chief, Grants Operations Branch, Grants Administration Division,
Office of Grants and Debarment, Office of Administration and
Resources Management.
c. Decision Memorandum. An EPA office or laboratory'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. Grants Management Offices (GMO). 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.
e. 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.)
5. IMPLEMENTATION PROCEDURES: ROLES AND RESPONSIBILITIES
a. Approval Official Responsibilities. Each EPA approval
official must determine whether a proposed relationship is one of
acquisition or assistance. In making this determination, each EPA
office and laboratory will use the criteria set forth in Section VI
of this policy. In those limited occasions where the approval
official has the responsibility of overseeing an award originating
in another office, then the approval official's responsibility is
limited to ensuring that the originating office states it has
determined an assistance relationship exists based on the criteria
set forth in this policy.
Offices and laboratories 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 or laboratory 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.
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(3) In most instances, offices and laboratories 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
or laboratory and decide whether to concur. The GMO will make this
decision in a timely manner 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
or laboratory 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 and laboratories determine the appropriate use of
assistance funds and to ensure high guality application packages
are produced.
c. Award Official Responsibilities.
(1) The Award Official ensures all technical, legal, and
administrative evaluations have been made and that the proposed
agreement is awardable. If a proposed agreement is awardable, the
Award Official is responsible for making the official offer to the
designated recipient by signing the award agreement.
6. DISTINGUISHING ACQUISITION AND ASSISTANCE RELATIONSHIPS.
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.
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The decision to use a contract or an assistance agreement must
be based solely on the principal purpose of the relationship. If
EPA's principal purpose is acquiring property or services from a
recipient for direct Agency (or government) benefit or use, an
acquisition relationship exists requiring the use of a contract.
If EPA is funding a recipient to support or stimulate
activities that are not principally 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.
b. Identifying Principal Purpose of Relationship
(1) Direct Benefit or Use - In applying the principal
purpose test, offices and laboratories 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 EPA expects to derive some
incidental use or benefit from funded activities. Such incidental
use or benefit does not preclude an award of assistance when the
principal purpose is public support or stimulation. For such cases,
an assistance vehicle may be still 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.
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(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 or laboratory 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 to use one instrument or
the other. A non-profit organization does not automatically
qualify for an assistance relationship. Similarly, a profit-making
organization does not automatically reflect an 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 well 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 waste water treatment plants;
(3) State and local government cleanup of hazardous
waste sites;
(4) Environmental education projects;
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(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 or laboratory
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 or laboratory 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 officials who implement EPA programs. An
assistance agreement may 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 that are also partners of EPA in
implementing EPA efforts.
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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
should be made solely by EPA after 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 indicate
that EPA does not directly use the State's information.
EPA may not treat an association to which it awards
assistance as it would a contractor. Thus, an EPA office or
laboratory may not direct an association in arranging the
association's conference or in providing other services for EPA's
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 recipient or its contractor.
Examples of activities that MUST be funded through a contract
(if not performed 'in-house' by EPA) include:
(a) Evaluation of performance of EPA efforts,
projects, or grantee activity when the evaluation is required by
or is for the direct use of the Agency;
(b) Surveys, studies, and research which gather
specific information desired by EPA for its own use or for
dissemination to the public as EPA materials;
(c) Training projects where EPA directs the
selection of the trainers or trainees, or the content of the
curriculum;
(d) Design or development of items to meet a direct
EPA need;
(e) Conferences sponsored or initiated by EPA
primarily to meet a specific EPA need or obtain information for use
by EPA;
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(f) Support the work of EPA Federal Advisory
Committee Act (FACA) Committees, as appropriate;
(g) Provide technical, analytical, and application
review services/advice for the direct benefit or use of EPA; such
as information used to set guidelines;
(h) Evaluate or improve the internal operations of
EPA;
(i) Provide support to EPA, with the statutory
exception of the Senior Environmental Employee Program;
(j) Produce specific information that will be
directly incorporated by EPA into technical, policy or regulatory
decisions;
(k) Develop computer models (i.e. software)
specifically for EPA use;
(1) Produce data for input into internal Agency
computer data bases;
(m) Help (as allowed under EPA Order 1900.2)
prepare required EPA reports to Congress;
(n) Help (as allowed under EPA Order 1900.2)
prepare EPA guidance documents or manuals;
(o) Operate EPA facilities;
(p) Organize training or other conferences
principally for federal employee benefit;
(q) Help perform policy analyses (as allowed under
EPA Order 1900.2) for EPA offices;
(r) Provide logistic or other support to EPA
employees carrying out technology transfer activities;
7. SELECTING BETWEEN A GRANT OR COOPERATIVE AGREEMENT.
After an office or laboratory 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 or laboratory must base this
decision on the extent and nature of the Agency's involvement in
the activities to be supported under the agreement.
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a. Grant Agreements. EPA shall use a grant agreement
whenever an assistance agreement is appropriate and the office or
laboratory 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 or laboratory anticipates substantial involvement with the
recipient during performance of the contemplated activity.
(1) 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 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).
(2) Anticipated substantial involvement during
prformance 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.
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8. 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.
9. IN-KIND ASSISTANCE. in addition to transferring money to an
authorized assistance recipient, EPA offices and laboratories may
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 and laboratories should provide the following
documentation in their files when providing in-kind assistance:
a. a savings of cost or time is expected;
b. all charges are to the grants object class series; and
c. 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.
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10. FAILURE TO COMPLY. In certain circumstances, it may become
apparent that an individual office, laboratory, 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 or laboratory, 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. GAD will seeJc to
ensure that future funding decisions by the involved office or
laboratory are consistent with the FGCAA. It is not EPA policy to
terminate, annul, or require ratification for these awards unless
there were or will be serious irregularities, e.g. conflict of
interest or intentional misconduct.
Jonathan fc.^Cannon
MAR 22 1994
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APPENDIX A
ACQUISITION AND ASSISTANCE CASE STUDIES
(These case studies do not depict actual EPA situations.
However, they do illustrate commonly raised circumstances
regarding acquisition and assistance.)
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CASE STUDY #1
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FACTS:
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:
ANSWER A:
the
QUESTION B:
ANSWER B:
May the office use an assistance agreement to fund
this conference?
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,
principal purpose of the agreement is to provide
information to the regulated parties.
May the agreement pay for travel expenses of n o n -
federal speakers and other participants in the
conference?
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.
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CASE STUDY #1 (continued)
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QUESTION C:
ANSWER C:
QUESTION D:
ANSWER D:
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-21?
Yes, if there is no statutory prohibition to do so.
Can this State recipient pay travel and other
conference costs for state and other non-federal
participants at this conference?
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.
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CASE STUDY #2
FACTS:
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.
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CASE STUDY #3
FACTS:
1. An EPA office wants to fund 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.
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 and this
training session would be feasible even if no federal
participants 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 because the
training would not be feasible and practicable.
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
any time at least 51 percent of the audience is non-
federal.
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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 conference". 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: May 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 Agency
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.
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CASE STUDY #5
FACTS:
1. EPA wants to award a cooperative agreement for research on the
impacts of a treatment standard that the Agency is
considering. Before issuing a regulation proposing use of the
standard, EPA believes it needs more information to explain
the proposal adequately for public comment.
2. The laboratory 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.
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CASE STUDY #6
FACTS:
1. An EPA laboratory is planning to issue a request for
applications from universities and others for a cooperative
research effort and has written a clear and precise
description of the research and how it is to be carried out.
2. All sampling activities will be carried out according to
established protocols, which describe in detail how the
samples are to be taken and what chemicals are to be tested
for in the samples. Recipient personnel will have to be
trained in the use of the protocol by Laboratory staff.
3. Analysis of the resulting data (and any changes to the
sampling protocols) will be carried out by EPA scientists.
However, the recipient may propose additional uses for the
data.
4. The recipient will be directed to "complete the processing of
the ... analytical chemistry samples and transmit the
information to EPA in computerized format".
QUESTION: A.
ANSWER: A.
QUESTION B.
ANSWER B.
Is a cooperative agreement the appropriate award
instrument for this activity?
No. The activity described above is not assistance.
From the information provided, the Laboratory's
principal purpose is to acquire sampling and
analyses support for the direct benefit and use of
EPA. Since the sampling and analysis protocol is
already developed, there is no evidence that the
award would stimulate or support the recipient in
carrying out a public purpose.
What is the appropriate award instrument for this
activity?
The appropriate award instrument for this activity
is a contract. The principal purpose of the activity
described above fulfills an Agency need and further
provides the laboratory with sampling and analytical
services for the direct benefit and use of EPA.
21
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EPA ORDER
57XX XXX
XXXXXX
CASE STUDY #7
FACTS:
1. An EPA laboratory has submitted to Headquarters an assistance
package to conduct cooperative research regarding wood burning
stoves.
2. The recipient will monitor emissions from the stove flues,
analyze the data, and submit periodic reports to the EPA
Project Officer. For emission levels detected outside of
acceptable variances, the recipient will work jointly with EPA
to modify the protocol and test the changes.
3. Bench and pilot studies plus the protocol have already been
published. This research is an opportunity to prove the
protocol in the field and will have a long-term, national
impact on air quality, as the technology finds its ways into
the manufacturing sector.
4. For purposes of this case study, assume that there is
statutory authority and delegated approval authority for this
award.
QUESTION: Is the planned activity described above an appropriate
use of a cooperative agreement?
ANSWER: Yes. Although EPA will receive some benefit from the
field research, the principal purpose of the above
mentioned activity fulfills a public purpose of
stimulation and support. This work is not merely a
sampling and data collection activity. Even if the
protocol survives the field tests intact, the principal
purpose of this activity stimulates and supports research
regarding wood burning stoves and satisfies a public
purpose. This activity meets the criteria for selecting
assistance as the appropriate award instrument. Further,
the statement , of work indicates joint operational
collaboration and meets the criteria for"substantial
involvement" by EPA and demonstrates the appropriate use
of a cooperative agreement in this instance.
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APPENDIX C
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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
24 1992
MEMORANDUM
SUBJECT: EPA Involvement in Grantee Personnel and Contractor
Under Grant/ and Cooperative Agreements
FROM: /Sallyanne Carper, 'Acting Deputy Assistant Administrator
and Acquisition
, Deputy Assistant Administrator
Research and Development
TO: 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 aware of similar
prohibitions in dealing with assistance recipients.
Under an assistance agreement, EPA transfers money,
property, services or anything else of va£ue 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.
EPA's Code of Conduct states that EPA employees must not use
their Government positions to "coerce, or appear to coerce,
anyone tc 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 person" (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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-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 Gary Katz
Harvey Pippen Clarence Mahan
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APPENDIX D
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APPENDIX D
40 CFR PART 30, "GRANTS AND
AGREEMENTS WITH INSTITUTIONS OF
HIGHER EDUCATION, HOSPITALS, AND
OTHER NON-PROFIT ORGANIZATIONS
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ENVIRONMENTAL PROTECTION AGENCY
RIN 2030-AA32
40 CFR Parts 30, 33
Grants and Agreements with Institutions of Higher Education,
Hospitals, and Other Non-Profit Organizations
AGENCY: Environmental Protection Agency
ACTION: Interim Final Rule, Request for Comments
SUMMARY: This interim final rule revises 40 CFR Part 30 and
deletes Part 33 to incorporate the changes established by revised
Office of Management and Budget (OMB) Circular A-110, "Uniform
Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals and Other Non-Profit
Institutions," published by OMB on November 29, 1993 (58 FR 62992) .
DATES: This interim final rule is effective (insert date of
publication). Written comments must be submitted on or before
(insert date 60 days after publication).
ADDRESS: Written comments should be sent to: Richard Mitchell,
Grants Policy and Procedures Branch (3903F) United States,
Environmental Protection Agency, 401 M Street SW, Washington, D.C.
20460 (202) 260-6077. Inquiries may also be submitted via
electronic mail (e-mail) to: mitchell.richard@epamail.epa.gov.
Electronic inquiries must be submitted as an ASCII file avoiding
the use of special characters and any form of encryption.
Inquiries will also be accepted on discs in WordPerfect in 5.1 file
format or ASCII file format. No Confidential Business Information
should be submitted through e-mail.
FOR FURTHER INFORMATION CONTACT: Richard Mitchell, Grants Policy
and Procedures Branch (3903F), United States Environmental
Protection Agency, 401 M Street SW, Washington, D.C. 20460, (202)
260-6077.
SUPPLEMENTARY INFORMATION: On November 29, 1993, OMB issued a
revised Circular A-110, entitled "Uniform Administrative
Requirements for Grants and Agreements With Institutions of Higher
Education, Hospitals and Other Non-Profit Organizations". The
Circular provides standards for obtaining consistency and
uniformity among Federal agencies in the administration of grants
and agreements with institutions of higher education, hospitals,
and other non-profit organizations.
OMB initially issued Circular A-110 in 1976 and, except for a
minor revision in February 1987, the Circular contained its
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original provisions until the revised Circular was published in
1993. To update the Circular, OMB established an interagency
review task force. The task force solicited suggestions for
changes to the Circular from university groups, non-profit
organizations and other interested parties and compared, for
consistency, the provisions of similar provisions applied to State
and local governments. The revised Circular reflects the results
of these efforts.
In addition, OMB published a notice in the Federal Register
(57 FR 39018) on August 27, 1992, requesting comments on proposed
revisions to Circular A-110. Interested parties were invited to
submit comments. OMB received over 200 comments from Federal
agencies, non-profit organizations, professional organizations and
others. All comments were considered in developing the final
revision.
OMB directed Federal agencies responsible for awarding and
administering grants and other agreements with institutions of
higher learning, hospitals, and other non-profit organizations to
adopt the language as it appears in the Circular unless different
provisions are required by Federal statute or are approved by OMB.
This rule does not apply to grants, contracts, or other
agreements between the Federal Government and units of State or
local governments covered by OMB Circular A-102, "Grants and
Cooperative Agreements with State and Local Governments," and EPA's
regulation at 40 CFR Part 31. In addition, subawards and contracts
to State or local governments are not covered by this rule.
However, the rule applies to subawards made by State and local
governments to organizations covered by this rule. The provisions
of the rule may be applied to commercial organizations, foreign
governments, organizations under the jurisdiction of foreign
governments, and international organizations.
The circular inadvertently misstates the applicability of the
statute commonly known as the BYRD Anti-Lobbying Amendment , 31
U.S.C. 1352. The statute applies to organizations which apply or
bid for an award exceeding $100,000, not $100,000 or more. We have
made this correction in Appendix A.
Two other changes have been made to Appendix A because of
recent changes brought about by the Federal Acquisition
Streamlining Act of 1994. The threshold for the requirement to
include a provision for compliance with the Copeland "Anti-Kickback
Act" (18 U.S.C. 874) was raised from $2,000 to $100,000.'
The threshold for the requirement to include the provision for
compliance with sections 102 and 107 of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-333) was raised to
$100,000.
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The Environmental Protection Agency (EPA) is promulgating the
Circular (with the changes discussed below) as an EPA regulation at
40 CFR Part 30. This regulation will supersede the existing
regulations at both 40 CFR Part 30 and 40 CFR Part 33.
This rule adopts all of the OMB Circular provisions except for
the following EPA-specific changes to the text:
1. 30.18 Hotel and motel fire safety. The Hotel and Motel
Fire Safety Act of 1990 (P. L. 101-391) requires the
General Services Administration (GSA) to limit its
lodging directories and lodging expense per diem surveys
to hotels and motels that meet the law's fire protection
and control guidelines. The Act establishes a number of
fire safety standards which must be met for hotels and
motels to be so listed by GSA. Further, beginning
October 1, 1994, Federal funds may not be used to sponsor
a conference, meeting, or training seminar held in a
hotel or motel which does not meet these standards. If
necessary, the head of the Federal agency may waive this
prohibition in the public interest.
2. 30.54 Quality assurance. A new section on quality
assurance will be added to ensure that environmentally
related measurements or data generation by recipients are
performed in a manner designed to meet EPA's standards.
This section will require recipients to develop
procedures and standards to produce information of high
quality and to minimize the potential for loss of data.
3. Except in the definitions, certain generic terms in the
Circular are being changed, if appropriate, to reflect
EPA's terminology and usage, e.g., the term "Federal
awarding agency" and "Federal Government" and similar
terms will be changed to "EPA." In appropriate cases the
term "Federal awarding agency" has been changed to "EPA
award official." Other minor editing has been done as
well. None of the editing of this type alters the
provisions of the Circular.
4. In certain cases the Circular includes indefinite
language such as "The Federal government may require.
EPA is changing such wording to "shall or will" to
reflect EPA's policies or procedures, where appropriate.
5. At §30.23 EPA is adding language stipulating that EPA
will not require cost sharing or matching unless required
by statute, regulation, Executive Order, or official
Agency policy.
6. At §30.25(c) the wording is being changed to specify the
office/official (i.e., the award official or the
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responsible technical program office) from whom written
approvals are to be obtained.
7. At §30.25(e) EPA is changing the language to provide that
recipients may incur pre-award costs 90 days before award
and more than 90 days before award with approval of the
award official.
8. At §30.27(b) EPA is adding language limiting the salary
rate of consultants to the maximum daily rate for level
4 of the Executive Schedule. This is a requirement of
EPA's appropriation act.
9. 30.44 Procurement procedures. EPA is adding language to
ensure that if the contractor awards contracts, the
recipient must ensure that the contractor take the same
five steps as the recipient is required to take to
utilize small businesses, minority-owned firms and
women's business enterprises, whenever possible. This
additional language is needed to meet the requirements of
EPA's 1991 Appropriations Act, P.L. 101-507. That
statute requires EPA for that fiscal year and for each
one thereafter, to the fullest extent possible, to ensure
at least 8% of federal funding for prime and subcontracts
awarded in support of authorized programs be made
available to business concerns owned or controlled by
socially and economically disadvantaged individuals
within the meaning of sections 8(a)(5) and (6) of the
Small Business Act, including women and Historically
Black colleges and universities.
Public Participation
The policy of the Agency is, whenever practicable, to afford
the public an opportunity to participate in the rulemaking process.
Accordingly, interested persons may submit written comments,
suggestions, or objections regarding the interim final rule to the
location identified in this preamble
Regulatory Impact Analysis
EPA has determined that this interim final rule will not have
a significant economic impact on a substantial number of small
entities because it does not effect the amount of funds provided in
the covered programs, but rather modifies and updates
administrative and procedural requirements. Therefore, a
regulatory flexibility analysis has not been prepared pursuant
to the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. In keeping
with the requirements of 44 U.S.C. 3504(h), the information
collection requirements contained in this rule have been approved
by OMB as Standard Forms. The Agency has determined that this rule
does not have sufficient federalism implications to warrant the
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preparation of a Federalism Assessment pursuant to Executive Order
12612. In addition, the Agency has determined that implementation
of this action will not have any significant impact on the quality
of the human environment pursuant to the National Environmental
Policy Act.
Except for the few EPA-specific additions detailed above, EPA
is adopting the full text of the Circular. The Agency has
submitted the rule to OMB for review.
Paperwork Reduction Act
This rule does not contain a collection of information subject
to the Paperwork Reduction Act of 1980 (44 U,.S.C. 3501 et seq.).
Unfunded Mandates Reform Act
Under section 202 of the Unfunded Mandates Reform Act of 1995
(the UMRA), P.L. 104-4, EPA generally must prepare a written
statement, including a cost-benefit analysis, for rules with
"Federal mandates" that may result in expenditures by State, local,
and tribal governments in the aggregate, or to the private sector,
of $100 million in any one year. When such a statement is required
for EPA rules, under section 205 of the UMRA EPA must identify and
consider alternatives, including the least costly, most cost-
effective or least burdensome alternative that achieves the
objectives of the rule. EPA must select that alternative, unless
the Administrator explains in the final rule why it was not
selected or it is inconsistent with law. Before EPA establishes
regulatory requirements that may significantly or uniquely affect
small governments, including tribal governments, it must develop
under section 203 of the UMRA a small government agency plan. The
plan must provide for notifying potentially affected small
governments, giving them meaningful and timely input in the
development of EPA regulatory proposals with significant Federal
intergovernmental mandates, and informing, educating, and advising
them on compliance with the regulatory requirements.
Today's interim final rule contains no Federal mandates
(within the meaning of the UMRA) for State, local, or tribal
governments or the private sector. The UMRA excludes from the
definitions of "Federal intergovernmental mandate" and "Federal
private sector mandate" duties that arise from conditions of
federal assistance. This interim final rule prescribes as
conditions of federal assistance administrative requirements
governing EPA grants to institutions of higher education,
hospitals, and other non-profit organizations. Thus, it is not
subject to the requirements of sections 202 and 205 of the UMRA.
In addition, EPA has determined that this interim final rule
contains no regulatory requirements that might significantly or
uniquely affect small governments. Accordingly, it is not subject
to the requirements of section 203 of the UMRA.
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List of Subjects in 40 CFR Part 30
Accounting, Administrative practice and procedures, grant
programs, Grants Administration, Reporting and Recordkeeping
requirements.
(Date)
Carol Browner
Administrator
Billing code: 6560-50-M
1. For the reasons set forth in the preamble, Title 40, Part
30 of the Code of Federal Regulations is revised as set forth
below:
Part 30 - Grants and Agreements with Institutions of Higher
Education, Hospitals, and Other Non-Profit Organizations
SUBPART A - GENERAL
30.1 Purpose.
30.2 Definitions.
3O.3 Effect: on other issuances.
30.4 Deviations.
30.5 Subawards.
SUBPART B - PRE-AWARD REQUIREMENTS
30.10 Purpose.
30.11 Pre-award policies.
30.12 Forms for applying for Federal assistance.
30.13 Debarment and suspension.
30.14 Special award conditions.
30.15 Metric system of measurement.
30.16 Resource Conservation and Recovery Act.
30.17 Certifications and representations.
30.18 Hotel and motel fire safety.
SUBPART C - POST-AWARD REQUIREMENTS
Financial and Program Management
30.20 Purpose of financial and program management.
30.21 Standards for financial management systems.
30.22 Payment.
30.23 Cost sharing or matching.
30.24 Program income.
30.25 Revision of budget and program plans.
30.26 Non-Federal audits.
30.27 Allowable costs.
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30.28 Period of availability of funds.
Property Standards
30.30 Purpose of property standards.
30.31 Insurance coverage.
30.32 Real property.
30.33 Federally-owned and exempt property.
30.34 Equipment.
30.35 Supplies and other expendable property.
30.36 Intangible property.
30.37 Property trust relationship.
Procurement Standards
30.40 Purpose of procurement standards.
30.41 Recipient responsibilities.
30.42 Codes of conduct.
30.43 Competition.
30.44 Procurement procedures.
30.45 Cost and price analysis.
30.46 Procurement records.
30.47 Contract administration.
30.48 Contract provisions.
Reports and Records
30.50 Purpose of reports and records.
30.51 Monitoring and reporting program performance.
30.52 Financial reporting.
30.53 Retention and access requirements for records.
30.54 Quality assurance
Termination and Enforcement
30.60 Purpose of termination and enforcement.
30.61 Termination.
30.62 Enforcement.
30.63 Disputes.
SUBPART D - AFTER-THE-AWARD REQUIREMENTS
30.70 Purpose.
30.71 Closeout procedures.
30.72 Subsequent adjustments and continuing responsibilities.
30.73 Collection of amounts due.
APPENDIX A - CONTRACT PROVISIONS
Authority: 33 U.S.C. 1251 et seq.; 42 U.S.C. 7401 et seq.; 42
U.S.C. 6901 et seq.; 42 U.S.C. 241, 242b, 243, 246, 300f, 300J-1,
300J-2, 300J-3, 42 U.S.C. 1857 et seq.; 7 U.S.C. 135 et seq.;
15 U.S.C. 2601 et seq.; 42 U.S.C. 9601 et seq.
SUBPART A - General
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30.1 Purpose.
This Subpart establishes uniform administrative requirements
for Federal grants and agreements awarded to institutions of
higher education, hospitals, and other non-profit organizations.
The Environmental Protection Agency (EPA) may not impose
additional or inconsistent requirements, except as provided in
Sections 30.4, and 30.14 or unless specifically required by
Federal statute or executive order. Non-profit organizations
that implement Federal programs for the States are also subject
to State requirements.
30.2 Definitions.
(a) Accrued expenditures means the charges incurred by the
recipient during a given period requiring the provision of funds
for: (1) goods and other tangible property received; (2) services
performed by employees, contractors, subrecipients, and other
payees; and, (3) other amounts becoming owed under programs for
which no current services or performance is required.
(b) Accrued income means the sum of: (1) earnings during a
given period from (i) services performed by the recipient, and
(ii) goods and other tangible property delivered to purchasers,
and (2) amounts becoming owed to the recipient for which no
current services or performance is required by the recipient.
(c) Acquisition cost of equipment means the net invoice
price of the equipment, including the cost of modifications,
attachments, accessories, or auxiliary apparatus 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 insurance,
shall be included or excluded from the unit acquisition cost in
accordance with the recipient's regular accounting practices.
(d) Advance means a payment made by Treasury check or other
appropriate payment mechanism to a recipient upon its request
either before outlays are made by the recipient or through the
use of predetermined payment schedules.
(e) Award means financial assistance that provides support
or stimulation to accomplish a public purpose. Awards include
grants and other agreements in the form of money or property in
lieu of money, by the Federal Government to an eligible
recipient. The term does not include: technical assistance,
which provides services instead of money; other assistance in the
form of loans, loan guarantees, interest subsidies, or insurance;
direct payments of any kind to individuals; and, contracts which
are required to be entered into and administered under
procurement laws and regulations.
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(f) Cash contributions means the recipient's cash outlay,
including the outlay of money contributed to the recipient by
third parties.
(g) Closeout means the process by which a Federal awarding
agency determines that all applicable administrative actions and
all required work of the award have been completed by the
recipient and Federal awarding agency.
(h) Contract means a procurement contract under an award or
subaward, and a procurement subcontract under a recipient's or
subrecipient's contract.
(i) Cost sharing or matching means that portion of project
or program costs not borne by the Federal Government.
(j) Date of completion means the date on which all work
under an award is completed or the date on the award document, or
any supplement or amendment thereto, on which Federal sponsorship
ends.
(k) Disallowed costs means those charges to an award that
the Federal awarding agency determines to be unallowable, in
accordance with the applicable Federal cost principles or other
terms and conditions contained in the award.
(1) Equipment means tangible nonexpendable personal
property including exempt property charged directly to the award
having a useful life of more than one year and an acquisition
cost of $5000 or more per unit. However, consistent with
recipient policy, lower limits may be established.
(m) Excess property means property under the control of any
Federal awarding agency that, as determined by the head thereof,
is no longer required for its needs or the discharge of its
responsibilities.
(n) Exempt property means tangible personal property
acquired in whole or in part with Federal funds, where the
Federal awarding agency has statutory authority to vest title in
the recipient without further obligation to the Federal
Government. An example of exempt property authority is contained
in the Federal Grant and Cooperative Agreement Act (31 U.S.C.
6306), for property acquired under an award to conduct basic or
applied research by a non-profit institution of higher education
or non-profit organization whose principal purpose is conducting
scientific research.
(o) Federal awarding agency means the Federal agency that
provides an award to the recipient.
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(p) Federal funds authorized means the total amount of
Federal funds obligated by the Federal Government for use by the
recipient. This amount may include any authorized carryover of
unobligated funds from prior funding periods when permitted by
agency regulations or agency implementing instructions.
(q) Federal share of real property, equipment, or supplies
means that percentage of the property's acquisition costs and any
improvement expenditures paid with Federal funds.
(r) Funding period means the period of time when Federal
funding is available for obligation by the recipient.
(s) Intangible property and debt instruments means, but is
not limited to, trademarks, copyrights, patents and patent
applications and such property as loans, notes and other debt
instruments, lease agreements, stock and other instruments of
property ownership, whether considered tangible or intangible.
(t) Obligations means the amounts of orders placed,
contracts and grants awarded, services received and similar
transactions during a given period that require payment by the
recipient during the same or a future period.
(u) Outlays or expenditures means charges made to the
project or program. They may be reported on a cash or accrual
basis. For reports prepared on a cash basis, outlays are the sum
of cash disbursements for direct charges for goods and services,
the amount of indirect expense charged, the value of third party
in-kind contributions applied and the amount of cash advances and
payments made to subrecipients. For reports prepared on an
accrual basis, outlays are the sum of cash disbursements for
direct charges for goods and services, the amount of indirect
expense incurred, the value of in-kind contributions applied, and
the net increase (or decrease) in the amounts owed by the
recipient for goods and other property received, for services
performed by employees, contractors, subrecipients and other
payees and other amounts becoming owed under programs for which
no current services or performance are required.
(v) Personal property means property of any kind except
real property. It may be tangible, having physical existence, or
intangible, having no physical existence, such as copyrights,
patents, or securities.
(w) Prior approval means written approval by an authorized
official evidencing prior consent.
(x) Program income means gross income earned by the
recipient that is directly generated by a supported activity or
earned as a result of the award (see exclusions in paragraphs
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30.24 (e) and (h)). Program income includes, but is not limited
to, income from fees for services performed, the use or rental of
real or personal property acquired under federally-funded
projects, the sale of commodities or items fabricated under an
award, license fees and royalties on patents and copyrights, and
interest on loans made with award funds. Interest earned on
advances of Federal funds is not program income. Except as
otherwise provided in Federal awarding agency regulations or the
terms and conditions of the award, program income does not
include the receipt of principal on loans, rebates, credits,
discounts, etc., or interest earned on any of them.
(y) Project costs means all allowable costs, as set forth
in the applicable Federal cost principles, incurred by a
recipient and the value of the contributions made by third
parties in accomplishing the objectives of the award during the
project period.
(z) Project period means the period established in the
award document during which Federal sponsorship begins and ends.
(aa) Property means, unless otherwise stated, real property,
equipment, intangible property and debt instruments.
(bb) Real property means land, including land improvements,
structures and appurtenances thereto, but excludes movable
machinery and equipment.
(cc) Recipient means an organization receiving financial
assistance directly from Federal awarding agencies to carry out a
project or program. The term includes public and private
institutions of higher education, public and private hospitals,
and other quasi-public and private non-profit organizations such
as, but not limited to, community action agencies, research
institutes, educational associations, and health centers. The
term may include commercial organizations, foreign or
international organizations (such as agencies of the United
Nations) which are recipients, subrecipients, or contractors or
subcontractors of recipients or subrecipients at the discretion
of the Federal awarding agency. The term does not include
government-owned contractor-operated facilities or research
centers providing continued support for mission-oriented, large-
scale programs that are government-owned or controlled, or are
designated as federally-funded research and development centers.
(dd) Research and development means all research activities,
both basic and applied, and all development activities that are
supported at universities, colleges, and other non-profit
institutions. "Research" is defined as a systematic study
directed toward fuller scientific knowledge or understanding of
the subject studied. "Development" is the systematic use of
knowledge and understanding gained from research directed toward
11
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the production of useful materials, devices, systems, or methods,
including design and development of prototypes and processes.
The term research also includes activities involving the training
of individuals in research techniques where such activities
utilize the same facilities as other research and development
activities and where such activities are not included in the
instruction function.
(ee) Small award means a grant or cooperative agreement not
exceeding the small purchase threshold fixed at 41 U.S.C. 403(11)
(currently $100,000).
(ff) Subaward means an award of financial assistance in the
form of money, or property in lieu of money, made under an award
by a recipient to an eligible subrecipient or by a subrecipient
to a lower tier subrecipient. The term includes financial
assistance when provided by any legal agreement, even if the
agreement is called a contract, but does not include procurement
of goods and services nor does it include any form of assistance
which is excluded from the definition of "award" in paragraph
(e).
(gg) Subrecipient means the legal entity to which a subaward
is made and which is accountable to the recipient for the use of
the funds provided. The term may include foreign or
international organizations (such as agencies of the United
Nations) at the discretion of the Federal awarding agency.
(hh) Supplies means all personal property excluding
equipment, intangible property, and debt instruments as defined
in this section, and inventions of a contractor conceived or
first actually reduced to practice in the performance of work
under a funding agreement ("subject inventions"), as defined in
37 CFR part 401, "Rights to Inventions Made by Nonprofit
Organizations and Small Business Firms Under Government Grants,
Contracts, and Cooperative Agreements."
(ii) Suspension means an action by a Federal awarding agency
that temporarily withdraws Federal sponsorship under an award,
pending corrective action by the recipient or pending a decision
to terminate the award by the Federal awarding agency.
Suspension of an award is a separate action from suspension under
Federal agency regulations implementing E.O.s 12549 and 12689,
"Debarment and Suspension."
(jj) Termination means the cancellation of Federal
sponsorship, in whole or in part, under an agreement at any time
prior to the date of completion.
(kk) Third party in-kind contributions means the value of
non-cash contributions provided by non-Federal third parties.
Third party in-kind contributions may be in the form of real
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property, equipment, supplies and other expendable property, and
the value of goods and services directly benefiting and
specifically identifiable to the project or program.
(11) Unliquidated obligations, for financial reports
prepared on a cash basis, means the amount of obligations
incurred by the recipient that have not been paid. For reports
prepared on an accrued expenditure basis, they represent the
amount of obligations incurred by the recipient for which an
outlay has not been recorded.
(mm) Unobligated balance means the portion of the funds
authorized by the Federal awarding agency that has not been
obligated by the recipient and is determined by deducting the
cumulative obligations from the cumulative funds authorized.
(nn) Unrecovered indirect cost means the difference between
the amount awarded and the amount which could have been awarded
under the recipient's approved negotiated indirect cost rate.
(oo) Working capital advance means a procedure where by
funds are advanced to the recipient to cover its estimated
disbursement needs for a given initial period.
30.3 Effect on other issuances.
For awards subject to this Circular, all administrative
requirements of codified program regulations, program manuals,
handbooks and other nonregulatory materials which are
inconsistent with the requirements of this Circular shall be
superseded, except to the extent they are required by statute, or
authorized in accordance with the deviations provision in Section
30.4.
30.4 Deviations.
The Office of Management and Budget (OMB) may grant
exceptions for classes of grants or recipients subject to the
requirements of this Circular when exceptions are not prohibited
by statute. However, in the interest of maximum uniformity,
exceptions from the requirements of this Circular shall be
permitted only in unusual circumstances. EPA may apply more
restrictive requirements to a class of recipients when approved
by OMB. EPA may apply less restrictive requirements when
awarding small awards, except for those requirements which are
statutory. Exceptions on a case-by-case basis may also be made
by EPA.
30.5 Subawards.
Unless sections of this Circular specifically exclude
subrecipients from coverage, the provisions of this Circular
shall be applied to subrecipients performing work under awards if
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such subrecipients are institutions of higher education,
hospitals or other non-profit organizations. State and local
government subrecipients are subject to the provisions of
regulations implementing the grants management common rule,
"Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments," published at 53 FR
8034 (3/11/88).
SUBPART B - Pre-Award Requirements
30.10 Purpose.
Sections 30.11 through 30.18 prescribes forms and
instructions and other pre-award matters to be used in applying
for Federal awards.
30.11 Pre-award policies.
(a) Use of Grants and Cooperative Agreements, and
Contracts. In each instance, EPA shall decide on the appropriate
award instrument (i.e., grant, cooperative agreement, or
contract). The Federal Grant and Cooperative Agreement Act (31
U.S.C. 6301-08) governs the use of grants, cooperative agreements
and contracts. A grant or cooperative agreement shall be used
only when the principal purpose of a transaction is to accomplish
a public purpose of support or stimulation authorized by Federal
statute. The statutory criterion for choosing between grants and
cooperative agreements is that for the latter, "substantial
involvement is expected between the executive agency and the
State, local government, or other recipient when carrying out the
activity contemplated in the agreement." Contracts shall be used
when the principal purpose is acquisition of property or services
for the direct benefit or use of the Federal Government.
(b) Public Notice and Priority Setting. EPA shall notify
the public of its intended funding priorities for discretionary
grant programs, unless funding priorities are established by
Federal statute.
(c) By submitting an application to EPA, the applicant
grants EPA permission to share the application with technical
reviewers both within and outside the Agency.
30.12 Forms for applying for Federal assistance.
(a) EPA shall comply with the applicable report clearance
requirements of 5 CFR part 1320, "Controlling Paperwork Burdens
on the Public," with regard to all forms used by EPA in place of
or as a supplement to the Standard Form 424 (SF-424) series.
(b) Applicants shall use the SF-424 series or those forms
and instructions prescribed by EPA.
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(c) For Federal programs covered by E.O. 12372,
"Intergovernmental Review of Federal Programs," the applicant
shall complete the appropriate sections of the SF-424
(Application for Federal Assistance) indicating whether the
application was subject to review by the State Single Point of
Contact (SPOC). The name and address of the SPOC for a
particular State can be obtained from EPA or the Catalog of
Federal Domestic Assistance. The SPOC shall advise the applicant
whether the program for which application is made has been
selected by that State for review.
(d) If the SF-424 form is not used EPA should indicate
whether the application is subject to review by the State under
E.O. 12372.
30.13 Debarment and suspension.
EPA and recipients shall comply with the nonprocurement
debarment and suspension common rule implementing E.O.s 12549 and
12689, "Debarment and Suspension." This common rule restricts
subawards and contracts with certain parties that are debarred,
suspended or otherwise excluded from or ineligible for
participation in Federal assistance programs or activities.
30.14 Special award conditions.
If an applicant or recipient: (a) has a history of poor
performance, (b) is not financially stable, (c) has a management
system that does not meet the standards prescribed in this
Circular, (d) has not conformed to the terms and conditions of a
previous award, or (e) is not otherwise responsible, EPA may
impose additional requirements as needed, provided that such
applicant or recipient is notified in writing as to: the nature
of the additional requirements, the reason why the additional
requirements are being imposed, the nature of the corrective
action needed, the time allowed for completing the corrective
actions, and the method for requesting reconsideration of the
additional requirements imposed. Any special conditions shall be
promptly removed once the conditions that prompted them have been
corrected.
30.15 Metric system of measurement.
The Metric Conversion Act, as amended by the Omnibus Trade
and Competitiveness Act (15 U.S.C. 205) declares that the metric
system is the preferred measurement system for U.S. trade and
commerce. The Act requires each Federal agency to establish a
date or dates in consultation with the Secretary of Commerce,
when the metric system of measurement will be used in the
agency's procurements, grants, and other business-related
activities. Metric implementation may take longer where the use
of the system is initially impractical or likely to cause
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significant inefficiencies in the accomplishment of federally-
funded activities. EPA shall follow the provisions of E.G.
12770, "Metric Usage in Federal Government Programs."
30.16 Resource Conservation and Recovery Act (RCRA) (Pub.
L. 94-580 codified at 42 U.S.C. 6962). Under the Act, any State
agency or agency of a political subdivision of a State which is
using appropriated Federal funds must comply with Section 6002.
Section 6002 requires that preference be given in procurement
programs to the purchase of specific products containing recycled
materials identified in guidelines developed by EPA (40 CFR parts
247-254). Accordingly, State and local institutions of higher
education, hospitals, and non-profit organizations that receive
direct Federal awards or other Federal funds shall give
preference in their procurement programs funded with Federal
funds to the purchase of recycled products pursuant to EPA's
guidelines. Further, pursuant to Executive Order 12873 (dated
October 20, 1993) recipients are to print documents/reports
prepared under an EPA award of assistance double sided on
recycled paper. This requirement does not apply to Standard
Forms. These forms are printed on recycled paper as available
trough the General Services Administration.
30.17 Certifications and representations.
Unless prohibited by statute or codified regulation, EPA
will allow recipients to submit certifications and
representations required by statute, executive order, or
regulation on an annual basis, if the recipients have ongoing and
continuing relationships with the agency. Annual certifications
and representations shall be signed by responsible officials with
the authority to ensure recipients' compliance with the pertinent
requirements.
30.18 Hotel and motel fire safety.
The Hotel and Motel Fire Safety Act of 1990 (P. L. 101-391)
establishes a number of fire safety standards which must be met
for hotels and motels. The law provides further that Federal
funds may not be used to sponsor a conference, meeting, or
training seminar held in a hotel or motel which does not meet the
law's fire protection and control guidelines. If necessary, the
head of the Federal agency may waive this prohibition in the
public interest.
SUBPART C - Post-Award Requirements
Financial and Program Management
30.20 Purpose of financial and program management.
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Sections 30.21 through 30.28 prescribe standards for
financial management systems, methods for making payments and
rules for: satisfying cost sharing and matching requirements,
accounting for program income, budget revision approvals, making
audits, determining allowability of cost, and establishing fund
availability.
30.21 Standards for financial management systems.
(a) EPA shall require recipients to relate financial data
to performance data and develop unit cost information whenever
practical.
(b) Recipients' financial management systems shall provide
for the following.
(1) Accurate, current and complete disclosure of the
financial results of each federally-sponsored project or program
in accordance with the reporting requirements set forth in
Section 30.52. If EPA requires reporting on an accrual basis
from a recipient that maintains its records on other than an
accrual basis, the recipient shall not be required to establish
an accrual accounting system. These recipients may develop such
accrual data for its reports on the basis of an analysis of the
documentation on hand.
(2) Records that identify adequately the source and
application of funds for federally-sponsored activities. These
records shall contain information pertaining to Federal awards,
authorizations, obligations, unobligated balances, assets,
outlays, income and interest.
(3) Effective control over and accountability for all
funds, property and other assets. Recipients shall adequately
safeguard all such assets and assure they are used solely for
authorized purposes.
(4) Comparison of outlays with budget amounts for each
award. Whenever appropriate, financial information should be
related to performance and unit cost data.
(5) Written procedures to minimize the time elapsing
between the transfer of funds to the recipient from the U.S.
Treasury and the issuance or redemption of checks, warrants or
payments by other means for program purposes by the recipient.
To the extent that the provisions of the Cash Management
Improvement Act (CMIA) (Pub. L. 101-453) govern, payment methods
of State agencies, instrumentalities, and fiscal agents shall be
consistent with CMIA Treasury-State Agreements or the CMIA
default procedures codified at 31 CFR part 205, "Withdrawal of
Cash from the Treasury for Advances under Federal Grant and Other
Programs."
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(6) Written procedures for determining the reasonableness,
allocability and allowability of costs in accordance with the
provisions of the applicable Federal cost principles and the
terms and conditions of the award.
(7) Accounting records including cost accounting records
that are supported by source documentation.
(c) Where the EPA guarantees or insures the repayment of
money borrowed by the recipient, the recipient shall provide
adequate bonding and insurance if the bonding and insurance
requirements of the recipient are not deemed adequate to protect
the interest of the Federal Government.
(d) Recipients shall obtain adequate fidelity bond coverage
where coverage to protect the Federal Government's interest is
insufficient.
(e) Where bonds are required in the situations described
above, the bonds shall be obtained from companies holding
certificates of authority as acceptable sureties, as prescribed
in 31 CFR part 223, "Surety Companies Doing Business with the
United States."
30.22 Payment.
(a) Payment methods shall minimize the time elapsing
between the transfer of funds from the United States Treasury and
the issuance or redemption of checks, warrants, or payment by
other means by the recipients. Payment methods of State agencies
or instrumentalities shall be consistent with Treasury-State CMIA
agreements or default procedures codified at 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they
maintain or demonstrate the willingness to maintain: (1) written
procedures that minimize the time elapsing between the transfer
of funds and disbursement by the recipient, and (2) financial
management systems that meet the standards for fund control and
accountability as established in Section 30.21. Cash advances to
a recipient organization shall be limited to the minimum amounts
needed and be timed to be in accordance with the actual,
immediate cash requirements of the recipient organization in
carrying out the purpose of the approved program or project. The
timing and amount of cash advances shall be as close as is
administratively feasible to the actual disbursements by the
recipient organization for direct program or project costs and
the proportionate share of any allowable indirect costs.
(c) Whenever possible, advances shall be consolidated to
cover anticipated cash needs for all awards made by the EPA to
the recipient.
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(1) Advance payment mechanisms include, but are not limited
to, Treasury check and electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part
205.
(3) Recipients shall be authorized to submit requests for
advances and reimbursements at least monthly when electronic fund
transfers are not used.
(d) Requests for Treasury check advance payment shall be
submitted on SF-270, "Request for Advance or Reimbursement," or
other forms as may be authorized by OMB. This form is not to be
used when Treasury check advance payments are made to the
recipient automatically through the use of a predetermined
payment schedule or if precluded by special instructions for
electronic funds transfer.
(e) Reimbursement is the preferred method when the
requirements in paragraph (b) cannot be met. EPA may also use
this method on any construction agreement, or if the major
portion of the construction project is accomplished through
private market financing or Federal loans, and the Federal
assistance constitutes a minor portion of the project.
(1) When the reimbursement method is used, EPA shall make
payment within 30 days after receipt of the billing, unless the
billing is improper.
(2) Recipients shall be authorized to submit request for
reimbursement at least monthly when electronic funds transfers
are not used.
(f) If a recipient cannot meet the criteria for advance
payments and EPA has determined that reimbursement is not
feasible because the recipient lacks sufficient working capital,
EPA may provide cash on a working capital advance basis. Under
this procedure, EPA shall advance cash to the recipient to cover
its estimated disbursement needs for an initial period generally
geared to the awardee's disbursing cycle. Thereafter, EPA shall
reimburse the recipient for its actual cash disbursements. The
working capital advance method of payment shall not be used for
recipients unwilling or unable to provide timely advances to
their subrecipient to meet the subrecipient's actual cash
disbursements.
(g) To the extent available, recipients shall disburse
funds available from repayments to and interest earned on a
revolving fund, program income, rebates, refunds, contract
settlements, audit recoveries and interest earned on such funds
before requesting additional cash payments.
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(h) Unless otherwise required by statute, EPA shall not
withhold payments for proper charges made by recipients at any
time during the project period unless (1) or (2) apply.
(1) A recipient has failed to comply with the project
objectives, the terms and conditions of the award, or Federal
reporting requirements.
(2) The recipient or subrecipient is delinquent in a debt
to the United States as defined in OMB Circular A-129, "Managing
Federal Credit Programs." Under such conditions, EPA may, upon
reasonable notice, inform the recipient that payments shall not
be made for obligations incurred after a specified date until the
conditions are corrected or the indebtedness to the Federal
Government is liquidated.
(i) Standards governing the use of banks and other
institutions as depositories of funds advanced under awards are
as follows.
(1) Except for situations described in paragraph (i)(2),
EPA shall not require separate depository accounts for funds
provided to a recipient or establish any eligibility requirements
for depositories for funds provided to a recipient. However,
recipients must be able to account for the receipt, obligation
and expenditure of funds.
(2) Advances of Federal funds shall be deposited and
maintained in insured accounts whenever possible.
(j) Consistent with the national goal of expanding the
opportunities for women-owned and minority-owned business
enterprises, recipients shall be encouraged to use women- owned
and minority-owned banks (a bank which is owned at least 50
percent by women or minority group members).
(k) Recipients shall maintain advances of Federal funds in
interest bearing accounts, unless (1), (2) or (3) apply.
(1) The recipient receives less than $120,000 in Federal
awards per year.
(2) The best reasonably available interest bearing account
would not be expected to earn interest in excess of $250 per year
on Federal cash balances.
(3) The depository would require an average or minimum
balance so high that it would not be feasible within the expected
Federal and non-Federal cash resources.
(1) For those entities where CMIA and its implementing
regulations do not apply, interest earned on Federal advances
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deposited in interest bearing accounts shall be remitted annually
to Department of Health and Human Services, Payment Management
System, P.O. Box 6021, Rockville, MD 20852. Interest amounts up
to $250 per year may be retained by the recipient for
administrative expense. State universities and hospitals shall
comply with CMIA, as it pertains to interest. If an entity
subject to CMIA uses its own funds to pay pre-award costs for
discretionary awards without prior written approval from EPA, it
waives its right to recover the interest under CMIA. In keeping
with Electronic Funds Transfer rules, (31 CFR Part 206), interest
should be remitted to the HHS Payment Management System through
an electronic medium such as the FEDWIRE Deposit system.
Recipients which do not have this capability should use a check.
(m) Except as noted elsewhere in this Circular, only the
following forms shall be authorized for the recipients in
requesting advances and reimbursements. EPA shall not require
more than an original and two copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. EPA
shall adopt the SF-270 as a standard form for all nonconstruction
programs when electronic funds transfer or predetermined advance
methods are not used. However, EPA has the option of using this
form for construction programs in lieu of the SF-271, "Outlay
Report and Request for Reimbursement for Construction Programs."
(2) SF-271, Outlay Report and Request for Reimbursement for
Construction Programs. EPA shall adopt the SF-271 as the
standard form to be used for requesting reimbursement for
construction programs. However, the SF-270 may be substituted
when EPA determines that it provides adequate information to meet
its needs.
30.23 Cost sharing or matching.
EPA shall not require cost sharing or matching unless
required by statute, regulation, Executive Order, or official
Agency policy.
(a) All contributions, including cash and third party in-
kind, shall be accepted as part of the recipient's cost sharing
or matching when such contributions meet all of the following
criteria.
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other
federally-assisted project or program.
(3) Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
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(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another
award, except where authorized by Federal statute to be used for
cost sharing or matching.
(6) Are identified in the approved budget.
(7) Conform to other provisions of this Circular, as
applicable.
(b) Unrecovered indirect costs may be included as part of
cost sharing or matching only with the prior approval of the EPA
Award Official.
(c) Values for recipient contributions of services and
property shall be established in accordance with the applicable
cost principles. If, after consultation with Agency property
management personnel, the EPA Award Official authorizes
recipients to donate buildings or land for construction or
facilities acquisition projects or long-term use, the value of
the donated property for cost sharing or matching shall be the
lesser of (1) or (2).
(1) The certified value of the remaining life of the
property recorded in the recipient's accounting records at the
time of donation.
(2) The current fair market value. However, when there is
sufficient justification, the EPA Award Official may approve the
use of the current fair market value of the donated property,
even if it exceeds the certified value at the time of donation to
the project.
(d) Volunteer services furnished by professional and
technical personnel, consultants, and other skilled and unskilled
labor may be counted as cost sharing or matching if the service
is an integral and necessary part of an approved project or
program. Rates for volunteer services shall be consistent with
those paid for similar work in the recipient's organization. In
those instances in which the required skills are not found in the
recipient organization, rates shall be consistent with those paid
for similar work in the labor market in which the recipient
competes for the kind of services involved. In either case, paid
fringe benefits that are reasonable, allowable, and allocable may
be included in the valuation.
(e) When an employer other than the recipient furnishes the
services of an employee, these services shall be valued at the
employee's regular rate of pay (plus an amount of fringe benefits
that are reasonable, allowable, and allocable, but exclusive of
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overhead costs), provided these services are in the same skill
for which the employee is normally paid.
(f) Donated supplies may include such items as expendable
equipment, office supplies, laboratory supplies or workshop and
classroom supplies. Value assessed to donated supplies included
in the cost sharing or matching share shall be reasonable and
shall not exceed the fair market value of the property at the
time of the donation.
(g) The method used for determining cost sharing or
matching for donated equipment, buildings and land for which
title passes to the recipient may differ according to the purpose
of the award, if (1) or (2) apply.
(1) If the purpose of the award is to assist the recipient
in the acquisition of equipment, buildings or land, the total
value of the donated property may be claimed as cost sharing or
matching.
(2) If the purpose of the award is to support activities
that require the use of equipment, buildings or land, normally
only depreciation or use charges for equipment and buildings may
be made. However, the full value of equipment or other capital
assets and fair rental charges for land may be allowed, provided
that the EPA technical program office, after consultation with
EPA property management personnel, has approved the charges.
(h) The value of donated property shall be determined in
accordance with the usual accounting policies of the recipient,
with the following qualifications.
(1) The value of donated land and buildings shall not
exceed its fair market value at the time of donation to the
recipient as established by an independent appraiser (e.g.,
certified real property appraiser or General Services
Administration representative) and certified by a responsible
official of the recipient.
(2) The value of donated equipment shall not exceed the
fair market value of equipment of the same age and condition at
the time of donation.
(3) The value of donated space shall not exceed the fair
rental value of comparable space as established by an independent
appraisal of comparable space and facilities in a privately-owned
building in the same locality.
(4) The value of loaned equipment shall not exceed its fair
rental value.
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(5) The following requirements pertain to the recipient's
supporting records for in-kind contributions from third parties.
(i) Volunteer services shall be documented and, to the
extent feasible, supported by the same methods used by the
recipient for its own employees.
(ii) The basis for determining the valuation for personal
service, material, equipment, buildings and land shall be
documented.
30.24 Program income.
(a) EPA shall apply the standards set forth in this section
in requiring recipient organizations to account for program
income related to projects financed in whole or in part with
Federal funds.
(b) Except as provided in paragraph (h) below, program
income earned during the project period shall be retained by the
recipient and, in accordance with EPA regulations or the terms
and conditions of the award, shall be used in one or more of the
ways listed in the following.
(i) Added to funds committed to the project by EPA and
recipient and used to further eligible project or program
objectives.
(2) Used to finance the non-Federal share of the project or
program.
(3) Deducted from the total project or program allowable
cost in determining the net allowable costs on which the Federal
share of costs is based.
(c) When EPA authorizes the disposition of program income
as described in paragraphs (b)(1) or (b)(2), program income in
excess of any limits stipulated shall be used in accordance with
paragraph (b)(3).
(d) In the event that the EPA does not specify in its
regulations or the terms and conditions of the award how program
income is to be used, paragraph (b)(3) shall apply automatically
to all projects or programs except research. For awards that
support research, paragraph (b)(1) shall apply automatically
unless EPA indicates in the terms and conditions another
alternative on the award or the recipient is subject to special
award conditions, as indicated in Section 30.14.
(e) Unless EPA regulations or the terms and conditions of
the award provide otherwise, recipients shall have no obligation
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to the Federal Government regarding program income earned after
the end of the project period.
(f) If authorized by EPA regulations or the terms and
conditions of the award, costs incident to the generation of
program income may be deducted from gross income to determine
program income, provided these costs have not been charged to the
award.
(g) Proceeds from the sale of property shall be handled in
accordance with the requirements of the Property Standards (See
Sections 30.30 through 30.37).
(h) Unless EPA regulations or the terms and condition of
the award provide otherwise, recipients shall have no obligation
to the Federal Government with respect to program income earned
from license fees and royalties for copyrighted material,
patents, patent applications, trademarks, and inventions produced
under an award. However, Patent and Trademark Amendments (35
U.S.C. 18) apply to inventions made under an experimental,
developmental, or research award.
30.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the
project or program as approved during the award process. The
budget shall include both the Federal and non-Federal share. It
shall be related to performance for program evaluation purposes
whenever appropriate.
(b) Recipients are required to report deviations from
budget and program plans, and request prior approvals for budget
and program plan revisions, in accordance with this section.
(c) For nonconstruction awards, unless EPA regulations
provide otherwise, recipients shall request prior written
approvals from:
(1) the EPA Award Official for the following:
(i) Change in the scope or the objective of the project or
program (even if there is no associated budget revision requiring
prior written approval).
(ii) The need for additional Federal funding.
(iii) The inclusion of costs that require prior approval
in accordance with OMB Circular A-21, "Cost Principles for
Institutions of Higher Education," OMB Circular A-122, "Cost
Principles for Non-Profit Organizations," or 45 CFR Part 74
Appendix E, "Principles for Determining Costs Applicable to
Research and Development under Grants and Contracts with
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Hospitals," or 48 CFR Part 31, "Contract Cost Principles and
Procedures," as applicable.
(2) The technical program office for the following:
(i) Change in a key person specified in the application or
award document.
(ii) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
(iii) The transfer of amounts budgeted for indirect
costs to absorb increases in direct costs, or vice versa.
(iv) The transfer of funds allotted for training allowances
(direct payment to trainees) to other categories of expense.
(v) Unless described in the application and funded in the
approved award, the subaward, transfer or contracting out of any
work under an award. This provision does not apply to the
purchase of supplies, material, equipment or general support
services.
(d) No other prior approval requirements for specific items
may be imposed unless a deviation has been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1)(i)
and (ii), the EPA Award Official may waive cost-related and
administrative prior written approvals required by this
regulation and OMB Cost Principles. For awards that support
research, these prior approval requirements are automatically
waived unless EPA provides otherwise in the award or agency
regulations.
(f) Recipients are authorized without prior approval or a
waiver to:
(1) Incur pre-award costs 90 calendar days prior to award.
(i) Pre-award costs incurred more than 90 calendar days
prior to award require the prior approval of the EPA Award
Official.
(ii) The applicant must include all pre-award costs in its
application.
(iii) The applicant incurs such costs at its own risk
(i.e., EPA is under no obligation to reimburse such costs if for
any reason the recipient does not receive an award or if the
award is less than anticipated and inadequate to cover such
costs).
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(iv) EPA will only allow pre-award costs without approval if
there are sufficient programmatic reasons for incurring the
expenditures prior to the award (e.g., time constraints, weather
factors, etc.), they are in conformance with the appropriate cost
principles, and any procurement complies with the requirements of
this rule.
(2) Extend the expiration date of the award one time for up
to 12 months.
(i) A one-time extension may not be initiated if:
(A) the terms and conditions of the award prohibit the
extension,
(B) the extension requires additional Federal funds, or
(C) the extension involves any change in the approved
objectives or scope of the project.
(ii) For one-time extensions, the recipient must notify the
EPA Award Official in writing with the supporting reasons and
revised expiration date at least 10 days before the expiration
date specified in the award.
(iii) This one-time extension may not be exercised
merely for the purpose of using unobligated balances.
(3) Carry forward unobligated balances to subsequent
funding periods providing the recipient notifies the EPA Award
Official by means of the Financial Status Report.
(g) The EPA technical program office may, at its option,
restrict the transfer of funds among direct cost categories or
programs, functions and activities for awards in which the
Federal share of the project exceeds $100,000 and the cumulative
amount of such transfers exceeds or is expected to exceed 10
percent of the total budget as last approved by EPA. Except as
provided for at §30.25(c),for awards in which the Federal share
is less than $100,000 -there are no restrictions on transfers of
funds among direct cost categories. EPA shall not permit a
transfer that would cause any Federal appropriation or part
thereof to be used for purposes other than those consistent with
the original intent of the appropriation.
(h) All other changes to nonconstruction budgets, except
for the changes described in paragraph (j), do not require prior
approval.
(i) For construction awards, recipients shall request prior
written approval promptly from EPA for budget revisions whenever
(1), (2) or (3) apply.
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(1) The revision results from changes in the scope or the
objective of the project or program.
(2) The need arises for additional Federal funds to
complete the project.
(3) A revision is desired which involves specific costs for
which prior written approval requirements may be imposed
consistent with applicable OMB cost principles listed in Section
30.27.
(j) No other prior approval requirements for specific items
may be imposed unless a deviation has been approved by OMB.
(k) When EPA makes an award that provides support for both
construction and nonconstruction work, EPA may require the
recipient to request prior approval before making any fund or
budget transfers between the two types of work supported.
(1) For both construction and nonconstruction awards, EPA
shall require recipients to notify the agency in writing promptly
whenever the amount of Federal authorized funds is expected to
exceed the needs of the recipient for the project period by more
than $5000 or five percent of the Federal award, whichever is
greater. This notification shall not be required if an
application for additional funding is submitted for a
continuation award.
(m) When requesting approval for budget revisions,
recipients shall use the budget forms that were used in the
application unless the EPA indicates that a letter clearly
describing the details of the request will suffice.
(n) Within 30 calendar days from the date of receipt of the
request for budget revisions, EPA shall review the request and
notify the recipient whether the budget revisions have been
approved. If the revision is still under consideration at the
end of 30 calendar days, EPA shall inform the recipient in
writing of the date when the recipient may expect the decision.
30.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of
higher education or other non-profit organizations shall be
subject to the audit requirements contained in OMB Circular A-
133, "Audits of Institutions of Higher Education and Other Non-
profit Institutions."
(b) State and local governments shall be subject to the
audit requirements contained in the Single Audit Act (31 U.S.C.
7501-7) and EPA regulations implementing OMB Circular A-128,
"Audits of State and Local Governments."
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(c) Hospitals not covered by the audit provisions of OMB
Circular A-133 shall be subject to the audit requirements of EPA.
(d) Commercial organizations shall be subject to the audit
requirements of EPA or the prime recipient as incorporated into
the award document.
30.27 Allowable costs.
(a) For each kind of recipient, there is a set of Federal
principles for determining allowable costs. Allowability of
costs shall be determined in accordance with the cost principles
applicable to the entity incurring the costs. Thus, allowability
of costs incurred by State, local or federally-recognized Indian
tribal governments is determined in accordance with the
provisions of OMB Circular A-87, "Cost Principles for State and
Local Governments." The allowability of costs incurred by non-
profit organizations is determined in accordance with the
provisions of OMB Circular A-122, "Cost Principles for Non-Profit
Organizations." The allowability of costs incurred by
institutions of higher education is determined in accordance with
the provisions of OMB Circular A-21, "Cost Principles for
Educational Institutions." The allowability of costs incurred by
hospitals is determined in accordance with the provisions of
Appendix E of 45 CFR part 74, "Principles for Determining Costs
Applicable to Research and Development Under Grants and Contracts
with Hospitals." The allowability of costs incurred by
commercial organizations and those non-profit organizations
listed in Attachment C to Circular A-122 is determined in
accordance with the provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31.
(b) EPA will limit its participation in the salary rate
(excluding overhead) paid to individual consultants retained by
recipients or by a recipient's contractors or subcontractors to
the maximum daily rate for level 4 of the Executive Schedule
unless a greater amount is authorized by law. (Recipient's may,
however, pay consultants more than this amount.) This limitation
applies to consultation services of designated individuals with
specialized skills who are paid at a daily or hourly rate. This
rate does not include transportation and subsistence costs for
travel performed; recipients will pay these in accordance with
their normal travel reimbursement practices. Contracts with
firms for services which are awarded using the procurement
requirements in this part are not affected by this limitation.
30.28 Period of availability of funds.
Where a funding period is specified, a recipient may charge
to the grant only allowable costs resulting from obligations
incurred during the funding period and any pre-award costs
authorized by EPA.
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Property Standards
30.30 Purpose of property standards.
30.31 through 30.37 set forth uniform standards governing
management and disposition of property furnished by the Federal
Government whose cost was charged to a project supported by a
Federal award. EPA shall require recipients to observe these
standards under awards and shall not impose additional
requirements, unless specifically required by Federal statute.
The recipient may use its own property management standards and
procedures provided it observes the provisions of Sections 30.31
through 30.37.
30.31 Insurance coverage.
Recipients shall, at a minimum, provide the equivalent
insurance coverage for real property and equipment acquired with
Federal funds as provided to property owned by the recipient.
Federally-owned property need not be insured unless required by
the terms and conditions of the award.
30.32 Real property.
EPA shall prescribe requirements for recipients concerning
the use and disposition of real property acquired in whole or in
part under awards. Unless otherwise provided by statute, such
requirements, at a minimum, shall contain the following.
(a) Title to real property shall vest in the recipient
subject to the condition that the recipient shall use the real
property for the authorized purpose of the project as long as it
is needed and shall not encumber the property without approval of
EPA.
(b) The recipient shall obtain written approval by EPA for
the use of real property in other federally-sponsored projects
when the recipient determines that the property is no longer
needed for the purpose of the original project. Use in other
projects shall be limited to those under federally-sponsored
projects (i.e., awards) or programs that have purposes consistent
with those authorized for support by EPA.
(c) When the real property is no longer needed as provided
in paragraphs (a) and (b), the recipient shall request
disposition instructions from EPA or its successor Federal
awarding agency. EPA shall observe one or more of the following
disposition instructions.
(1) The recipient may be permitted to retain title without
further obligation to the Federal Government after it compensates
the Federal Government for that percentage of the current fair
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market value of the property attributable to the Federal
participation in the project.
(2) The recipient may be directed to sell the property
under guidelines provided by EPA and pay the Federal Government
for that percentage of the current fair market value of the
property attributable to the Federal participation in the project
(after deducting actual and reasonable selling and fix-up
expenses, if any, from the sales proceeds). When the recipient
is authorized or required to sell the property, proper sales
procedures shall be established that provide for competition to
the extent practicable and result in the highest possible return.
(3) The recipient may be directed to transfer title to the
property to the Federal Government or to an eligible third party
provided that, in such cases, the recipient shall be entitled to
compensation for its attributable percentage of the current fair
market value of the property.
30.33 Federally-owned and exempt property.
(a) Federally-owned property.
(1) Title to federally-owned property remains vested in the
Federal Government. Recipients shall submit annually an
inventory listing of federally-owned property in their custody to
EPA's property management staff. Upon completion of the award or
when the property is no longer needed, the recipient shall report
the property to EPA's property management staff for further
utilization.
(2) If EPA has no further need for the property, it shall
be declared excess and reported to the General Services
Administration, unless EPA has statutory authority to dispose of
the property by alternative methods (e.g., the authority provided
by the Federal Technology Transfer Act (15 U.S.C. 3710 (I)) to
donate research equipment to educational and non-profit
organizations in accordance with E.O. 12821, "Improving
Mathematics and Science Education in Support of the National
Education Goals.11) Appropriate instructions shall be issued to
the recipient by EPA's property management staff.
(b) Exempt property. When statutory authority exists, EPA
has the option to vest title to property acquired with Federal
funds in the recipient without further obligation to the Federal
Government and under conditions EPA considers appropriate. Such
property is "exempt property." Should EPA not establish
conditions, title to exempt property upon acquisition shall vest
in the recipient without further obligation to the Federal
Government.
30.34 Equipment.
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(a) Title to equipment acquired by a recipient with Federal
funds shall vest in the recipient, subject to conditions of this
section.
(b) The recipient shall not use equipment acquired with
Federal funds to provide services to non-Federal outside
organizations for a fee that is less than private companies
charge for equivalent services, unless specifically authorized by
Federal statute, for as long as the Federal Government retains an
interest in the equipment.
(c) The recipient shall use the equipment in the project or
program for which it was acquired as long as needed, whether or
not the project or program continues to be supported by Federal
funds and shall not encumber the property without approval of
EPA. When no longer needed for the original project or program,
the recipient shall use the equipment in connection with its
other federally-sponsored activities, in the following order of
priority: (i) Activities sponsored by EPA, then (ii) activities
sponsored by other Federal awarding agencies.
(d) During the time that equipment is used on the project
or program for which it was acquired, the recipient shall make it
available for use on other projects or programs if such other use
will not interfere with the work on the project or program for
which the equipment was originally acquired. First preference
for such other use shall be given to other projects or programs
sponsored by EPA; second preference shall be given to projects or
programs sponsored by other Federal awarding agencies. If the
equipment is owned by the Federal Government, use on other
activities not sponsored by the Federal Government shall be
permissible if authorized by EPA. User charges shall be treated
as program income.
(e) When acquiring replacement equipment, the recipient may
use the equipment to be replaced as trade-in or sell the
equipment and use the proceeds to offset the costs of the
replacement equipment subject to the approval of EPA.
(f) The recipient's property management standards for
equipment acquired with Federal funds and federally-owned
equipment shall include all of the following.
(1) Equipment records shall be maintained accurately and
shall include the following information.
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal
stock number, national stock number, or other identification
number.
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(iii) Source of the equipment, including the award
number.
(iv) Whether title vests in the recipient or the Federal
Government.
(v) Acquisition date (or date received, if the equipment
was furnished by the Federal Government) and cost.
(vi) Information from which one can calculate the percentage
of Federal participation in the cost of the equipment (not
applicable to equipment furnished by the Federal Government).
(vii) Location and condition of the equipment and the
date the information was reported.
(viii) Unit acquisition cost.
(ix) ultimate disposition data, including date of disposal
and sales price or the method used to determine current fair
market value where a recipient compensates EPA for its share.
(2) Equipment owned by the Federal Government shall be
identified to indicate Federal ownership.
(3) A physical inventory of equipment shall be taken and
the results reconciled with the equipment records at least once
every two years. Any differences between quantities determined
by the physical inspection and those shown in the accounting
records shall be investigated to determine the causes of the
difference. The recipient shall, in connection with the
inventory, verify the existence, current utilization, and
continued need for the equipment.
(4) A control system shall be in effect to insure adequate
safeguards to prevent loss, damage, or theft of the equipment.
Any loss, damage, or theft of equipment shall be investigated and
fully documented; if the equipment was owned by the Federal
Government, the recipient shall promptly notify EPA.
(5) Adequate maintenance procedures shall be implemented to
keep the equipment in good condition.
(6) Where the recipient is authorized or required to sell
the equipment, proper sales procedures shall be established which
provide for competition to the extent practicable and result in
the highest possible return.
(g) When the recipient no longer needs the equipment, the
equipment may be used for other activities in accordance with the
following standards. For equipment with a current per unit fair
market value of $5000 or more, the recipient may retain the
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equipment for other uses provided that compensation is made to
the original Federal awarding agency or its successor. The
amount of compensation shall be computed by applying the
percentage of Federal participation in the cost of the original
project or program to the current fair market value of the
equipment. If the recipient has no need for the equipment, the
recipient shall request disposition instructions from EPA. EPA
shall determine whether the equipment can be used to meet the
agency's requirements. If no requirement exists within that
agency, the availability of the equipment shall be reported to
the General Services Administration by EPA to determine whether a
requirement for the equipment exists in other Federal agencies.
EPA shall issue instructions to the recipient no later than 120
calendar days after the recipient's request and the following
procedures shall govern.
(1) If so instructed or if disposition instructions are not
issued within 120 calendar days after the recipient's request,
the recipient shall sell the equipment and reimburse EPA an
amount computed by applying to the sales proceeds the percentage
of Federal participation in the cost of the original project or
program. However, the recipient shall be permitted to deduct and
retain from the Federal share $500 or ten percent of the
proceeds, whichever is less, for the recipient's selling and
handling expenses.
(2) If the recipient is instructed to ship the equipment
elsewhere, the recipient shall be reimbursed by the Federal
Government by an amount which is computed by applying the
percentage of the recipient's participation in the cost of the
original project or program to the current fair market value of
the equipment, plus any reasonable shipping or interim storage
costs incurred.
(3) If the recipient is instructed to otherwise dispose of
the equipment, the recipient shall be reimbursed by EPA for such
costs incurred in its disposition.
(4) EPA may reserve the right to transfer the title to the
Federal Government or to a third party named by the Federal
Government when such third party is otherwise eligible under
existing statutes. Such transfer shall be subject to the
following standards.
(i) The equipment shall be appropriately identified in the
award or otherwise made known to the recipient in writing.
(ii) EPA shall issue disposition instructions within 120
calendar days after receipt of a final inventory. The final
inventory shall list all equipment acquired with grant funds and
federally-owned equipment. If EPA fails to issue disposition
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instructions within the 120 calendar day period, the recipient
shall apply the standards of this section, as appropriate.
(iii) When EPA exercises its right to take title, the
equipment shall be subject to the provisions for federally-owned
equipment.
30.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property shall
vest in the recipient upon acquisition. If there is a residual
inventory of unused supplies exceeding $5000 in total aggregate
value upon termination or completion of the project or program
and the supplies are not needed for any other federally-sponsored
project or program, the recipient shall retain the supplies for
use on non-Federal sponsored activities or sell them, but shall,
in either case, compensate the Federal Government for its share.
The amount of compensation shall be computed in the same manner
as for equipment.
(b) The recipient shall not use supplies acquired with
Federal funds to provide services to non-Federal outside
organizations for a fee that is less than private companies
charge for equivalent services, unless specifically authorized by
Federal statute as long as the Federal Government retains an
interest in the supplies.
30.36 Intangible property.
(a) The recipient may copyright any work that is subject to
copyright and was developed, or for which ownership was
purchased, under an award. EPA reserves a royalty-free,
nonexclusive and irrevocable right to reproduce, publish, or
otherwise use the work for Federal purposes, and to authorize
others to do so.
(b) Recipients are subject to applicable regulations
governing patents and inventions, including government-wide
regulations issued by the Department of Commerce at 37 CFR part
401, "Rights to Inventions Made by Nonprofit Organizations and
Small Business Firms Under Government Grants, Contracts and
Cooperative Agreements."
(c) Unless waived by EPA, the Federal Government has the
right to (1) and (2).
(1) Obtain, reproduce, publish or otherwise use the data
first produced under an award.
(2) Authorize others to receive, reproduce, publish, or
otherwise use such data for Federal purposes.
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(d) Title to intangible property and debt instruments
acquired under an award or subaward vests upon acquisition in the
recipient. The recipient shall use that property for the
originally-authorized purpose, and the recipient shall not
encumber the property without approval of EPA. When no longer
needed for the originally authorized purpose, disposition of the
intangible property shall occur in accordance with the provisions
of paragraph 30.34(g).
30.37 Property trust relationship.
Real property, equipment, intangible property and debt
instruments that are acquired or improved with Federal funds
shall be held in trust by the recipient as trustee for the
beneficiaries of the project or program under which the property
was acquired or improved. Agencies may require recipients to
record liens or other appropriate notices of record to indicate
that personal or real property has been acquired or improved with
Federal funds and that use and disposition conditions apply to
the property.
Procurement Standards
30.40 Purpose of procurement standards.
Sections 30.41 through 30.48 set forth standards for use by
recipients in establishing procedures for the procurement of
supplies and other expendable property, equipment, real property
and other services with Federal funds. These standards are
furnished to ensure that such materials and services are obtained
in an effective manner and in compliance with the provisions of
applicable Federal statutes and executive orders. No additional
procurement standards or requirements shall be imposed by EPA
upon recipients, unless specifically required by Federal statute
or executive order or approved by OMB.
30.41 Recipient responsibilities.
The standards contained in this section do not relieve the
recipient of the contractual responsibilities arising under its
contract(s). The recipient is the responsible authority, without
recourse to EPA, regarding the settlement and satisfaction of all
contractual and administrative issues arising out of procurements
entered into in support of an award or other agreement. This
includes disputes, claims, protests of award, source evaluation
or other matters of a contractual nature. Matters concerning
violation of statute are to be referred to such Federal, State or
local authority as may have proper jurisdiction.
30.42 Codes of conduct.
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The recipient shall maintain written standards of conduct
governing the performance of its employees engaged in the award
and administration of contracts. No employee, officer, or agent
shall participate in the selection, award, or administration of a
contract supported by Federal funds if a real or apparent
conflict of interest would be involved. Such a conflict would
arise when the employee, officer, or agent, any member of his or
her immediate family, his or her partner, or an organization
which employs or is about to employ any of the parties indicated
herein, has a financial or other interest in the firm selected
for an award. The officers, employees, and agents of the
recipient shall neither solicit nor accept gratuities, favors, or
anything of monetary value from contractors, or parties to
subagreements. However, recipients may set standards for
situations in which the financial interest is not substantial or
the gift is an unsolicited item of nominal value. The standards
of conduct shall provide for disciplinary actions to be applied
for violations of such standards by officers, employees, or
agents of the recipient.
30.43 Competition.
All procurement transactions shall be conducted in a manner
to provide, to the maximum extent practical, open and free
competition. The recipient shall be alert to organizational
conflicts of interest as well as noncompetitive practices among
contractors that may restrict or eliminate competition or
otherwise restrain trade. In order to ensure objective
contractor performance and eliminate unfair competitive
advantage, contractors that develop or draft specifications,
requirements, statements of work, invitations for bids and/or
requests for proposals shall be excluded from competing for such
procurements. Awards shall be made to the bidder or offerer
whose bid or offer is responsive to the solicitation and is most
advantageous to the recipient, price, quality and other factors
considered. Solicitations shall clearly set forth all
requirements that the bidder or offerer shall fulfill in order
for the bid or offer to be evaluated by the recipient. Any and
all bids or offers may be rejected when it is in the recipient's
interest to do so.
30.44 Procurement procedures.
(a) All recipients shall establish written procurement
procedures. These procedures shall provide for, at a minimum,
that (1), (2) and (3) apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is made of lease and
purchase alternatives to determine which would be the most
economical and practical procurement for the Federal Government.
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(3) Solicitations for goods and services provide for all of
the following.
(i) A clear and accurate description of the technical
requirements for the material, product or service to be procured.
In competitive procurements, such a description shall not contain
features which unduly restrict competition.
(ii) Requirements which the bidder/offerer must fulfill and
all other factors to be used in evaluating bids or proposals.
(iii) A description, whenever practicable, of technical
requirements in terms of functions to be performed or performance
required, including the range of acceptable characteristics or.
minimum acceptable standards.
(iv) The specific features of "brand name or equal"
descriptions that bidders are required to meet when such items
are included in the solicitation.
(v) The acceptance, to the extent practicable and
economically feasible, of products and services dimensioned in
the metric system of measurement.
(vi) Preference, to the extent practicable and economically
feasible, for products and services that conserve natural
resources and protect the environment and are energy efficient.
(b) Positive efforts shall be made by recipients to utilize
small businesses, minority-owned firms, and women's business
enterprises, whenever possible. Recipients of Federal awards
shall take all of the following steps to further this goal.
(1) Ensure that small businesses, minority-owned firms, and
women's business enterprises are used to the fullest extent
practicable.
(2) Make information on forthcoming opportunities available
and arrange time frames for purchases and contracts to encourage
and facilitate participation by small businesses, minority-owned
firms, and women's business enterprises.
(3) Consider in the contract process whether firms
competing for larger contracts intend to subcontract with small
businesses, minority-owned firms, and women's business
enterprises.
(4) Encourage contracting with consortiums of small
businesses, minority-owned firms and women's business enterprises
when a contract is too large for one of these firms to handle
individually.
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(5) Use the services and assistance, as appropriate, of
such organizations as the Small Business Administration and the
Department of Commerce's Minority Business Development Agency in
the solicitation and utilization of small businesses, minority-
owned firms and women's business enterprises.
(6) If the contractor awards contracts, requiring the
contractor to take steps in paragraphs (b)(l)-(5) of this
section.
(c) The type of procuring instruments used (e.g., fixed
price contracts, cost reimbursable contracts, purchase orders,
and incentive contracts) shall be determined by the recipient but
shall be appropriate for the particular procurement and for
promoting the best interest of the program or project involved.
The "cost-plus-a-percentage-of-cost" or "percentage of
construction cost" methods of contracting shall not be used.
(d) Contracts shall be made only with responsible
contractors who possess the potential ability to perform
successfully under the terms and conditions of the proposed
procurement. Consideration shall be given to such matters as
contractor integrity, record of past performance, financial and
technical resources or accessibility to other necessary
resources. In certain circumstances, contracts with certain
parties are restricted by agencies' implementation of E.O.s 12549
and 12689, "Debarment and Suspension."
(e) Recipients shall, on request, make available for EPA,
pre-award review and procurement documents, such as request for
proposals or invitations for bids, independent cost estimates,
etc., when any of the following conditions apply.
(1) A recipient's procurement procedures or operation fails
to comply with the procurement standards in EPA's implementation
of this Circular.
(2) The procurement is expected to exceed the small
purchase threshold fixed at 41 U.S.C. 403 (11) (currently
$100,000) and is to be awarded without competition or only one
bid or offer is received in response to a solicitation.
(3) The procurement, which is expected to exceed the small
purchase threshold, specifies a "brand name" product.
(4) The proposed award over the small purchase threshold is
to be awarded to other than the apparent low bidder under a
sealed bid procurement.
(5) A proposed contract modification changes the scope of a
contract or increases the contract amount by more than the amount
of the small purchase threshold.
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30.45 Cost and price analysis.
Some form of cost or price analysis shall be made and
documented in the procurement files in connection with every
procurement action. Price analysis may be accomplished in
various ways, including the comparison of price quotations
submitted, market prices and similar indicia, together with
discounts. Cost analysis is the review and evaluation of each
element of cost to determine reasonableness, allocability and
allowability.
30.46 Procurement records.
Procurement records and files for purchases in excess of the
small purchase threshold shall include the following at a
minimum: (a) basis for contractor selection, (b) justification
for lack of competition when competitive bids or offers are not
obtained, and (c) basis for award cost or price.
30.47 Contract administration.
A system for contract administration shall be maintained to
ensure contractor conformance with the terms, conditions and
specifications of the contract and to ensure adequate and timely
follow up of all purchases. Recipients shall evaluate contractor
performance and document, as appropriate, whether contractors
have met the terms, conditions and specifications of the
contract.
30.48 Contract provisions.
The recipient shall include, in addition to provisions to
define a sound and complete agreement, the following provisions
in all contracts. The following provisions shall also be applied
to subcontracts.
(a) Contracts in excess of the small purchase threshold
shall contain contractual provisions or conditions that allow for
administrative, contractual, or legal remedies in instances in
which a contractor violates or breaches the contract terms, and
provide for such remedial actions as may be appropriate.
(b) All contracts in excess of the small purchase threshold
shall contain suitable provisions for termination by the
recipient, including the manner by which termination shall be
effected and the basis for settlement. In addition, such
contracts shall describe conditions under which the contract may
be terminated for default as well as conditions where the
contract may be terminated because of circumstances beyond the
control of the contractor.
(c) Except as otherwise required by statute, an award that
requires the contracting (or subcontracting) for construction or
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facility improvements shall provide for the recipient to follow
its own requirements relating to bid guarantees, performance
bonds, and payment bonds unless the construction contract or
subcontract exceeds $100,000. For those contracts or
subcontracts exceeding $100,000, EPA may accept the bonding
policy and requirements of the recipient, provided EPA has made a
determination that the Federal Government's interest is
adequately protected. If such a determination has not been made,
the minimum requirements shall be as follows.
(1) A bid guarantee from each bidder equivalent to five
percent of the bid price. The "bid guarantee" shall consist of a
firm commitment such as a bid bond, certified check, or other
negotiable instrument accompanying a bid as assurance that the
bidder shall, 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 contract to assure payment as required by
statute of all persons supplying labor and material in the
execution of the work provided for in the contract.
(4) Where bonds are required in the situations described
herein, the bonds shall be obtained from companies holding
certificates of authority as acceptable sureties pursuant to 31
CFR part 223, "Surety Companies Doing Business with the United
States."
(d) All negotiated contracts (except those for less than
the small purchase threshold) awarded by recipients shall include
a provision to the effect that the recipient, EPA, the
Comptroller General of the United States, or any of their duly
authorized representatives, shall have access to any books,
documents, papers and records of the contractor which are
directly pertinent to a specific program for the purpose of
making audits, examinations, excerpts and transcriptions.
(e) All contracts, including small purchases, awarded by
recipients and their contractors shall contain the procurement
provisions of Appendix A to this Circular, as applicable.
Reports and Records
30.50 Purpose of reports and records.
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Sections 30.51 through 30.53 set forth the procedures for
monitoring and reporting on the recipient's financial and program
performance and the necessary standard reporting forms. They
also set forth record retention requirements.
30.51 Monitoring and reporting program performance.
(a) Recipients are responsible for managing and monitoring
each project, program, subaward, function or activity supported
by the award. Recipients shall monitor subawards to ensure
subrecipients have met the audit requirements as delineated in
Section 30.26.
(b) EPA shall prescribe the frequency with which the
performance reports shall be submitted. Except as provided in
paragraph 30.51(f), performance reports shall not be required
more frequently than quarterly or, less frequently than annually.
Annual reports shall be due 90 calendar days after the grant
year; quarterly or semi-annual reports shall be due 30 days after
the reporting period. EPA may require annual reports before the
anniversary dates of multiple year awards in lieu of these
requirements. The final performance reports are due 90 calendar
days after the expiration or termination of the award.
(c) If inappropriate, a final technical or performance
report shall not be required after completion of the project.
(d) When required, performance reports shall generally
contain, for each award, brief information on each of the
following.
(1) A comparison of actual accomplishments with the goals
and objectives established for the period, the findings of the
investigator, or both. Whenever appropriate and the output of
programs or projects can be readily quantified, such quantitative
data should be related to cost data for computation of unit
costs.
(2) Reasons why established goals were not met, if
appropriate.
(3) Other pertinent information including, when
appropriate, analysis and explanation of cost overruns or high
unit costs.
(e) Recipients shall not be required to submit more than
the original and two copies of performance reports.
(f) Recipients shall immediately notify EPA of developments
that have a significant impact on the award-supported activities.
Also, notification shall be given in the case of problems,
delays, or adverse conditions which materially impair the ability
42
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to meet the objectives of the award. This notification shall
include a statement of the action taken or contemplated, and any
assistance needed to resolve the situation.
(g) EPA may make site visits, as needed.
(h) EPA shall comply with clearance requirements of 5 CFR
part 1320 when requesting performance data from recipients.
30.52 Financial reporting.
(a) The following forms or such other forms as may be
approved by OMB are authorized for obtaining financial
information from recipients.
(1) SF-269 or SF-269A, Financial Status Report.
(i) EPA shall require recipients to use the SF-269 or SF-
269A to report the status of funds for all nonconstruction
projects or programs. However, EPA has the option of not
requiring the SF-269 or SF-269A when the SF-270, Request for
Advance or Reimbursement, or SF-272, Report of Federal Cash
Transactions, is determined to provide adequate information to
meet its needs, except that a final SF-269 or SF-269A shall be
required at the completion of the project when the SF-270 is used
only for advances.
(ii) EPA shall prescribe whether the report shall be on a
cash or accrual basis. If EPA requires accrual information and
the recipient's accounting records are not normally kept on the
accrual basis, the recipient shall not be required to convert its
accounting system, but shall develop such accrual information
through best estimates based on an analysis of the documentation
on hand.
(iii) EPA shall determine the frequency of the Financial
Status Report for each project or program, considering the size
and complexity of the particular project or program. However,
the report shall not be required more frequently than quarterly
or less frequently than annually. A final report shall be
required at the completion of the agreement.
(iv) EPA shall require recipients to submit the SF-269 or
SF-269A (an original and no more than two copies) no later than
30 days after the end of each specified reporting period for
quarterly and semi-annual reports, and 90 calendar days for
annual and final reports. Extensions of reporting due dates may
be approved by EPA upon request of the recipient.
(2) SF-272, Report of Federal Cash Transactions.
43
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(i) When funds are advanced to recipients EPA shall require
each recipient to submit the SF-272 and, when necessary, its
continuation sheet, SF-272A. EPA shall use this report to
monitor cash advanced to recipients and to obtain disbursement
information for each agreement with the recipients.
(ii) EPA may require forecasts of Federal cash requirements
in the "Remarks" section of the report.
(iii) When practical and deemed necessary, EPA may
require recipients to report in the "Remarks" section the amount
of cash advances received in excess of three days. Recipients
shall provide short narrative explanations of actions taken to
reduce the excess balances.
(iv) Recipients shall be required to submit not more than
the original and two copies of the SF-272 15 calendar days
following the end of each quarter. EPA may require a monthly
report from those recipients receiving advances totaling $1
million or more per year.
(v) EPA may waive the requirement for submission of the SF-
272 for any one of the following reasons: (l) When monthly
advances do not exceed $25,000 per recipient, provided that such
advances are monitored through other forms contained in this
section; (2) If, in EPA's opinion, the recipient's accounting
controls are adequate to minimize excessive Federal advances; or,
(3) When the electronic payment mechanisms provide adequate data.
(b) When EPA needs additional information or more frequent
reports, the following shall be observed.
(1) When additional information is needed to comply with
legislative requirements, EPA shall issue instructions to require
recipients to submit such information under the "Remarks" section
of the reports.
(2) When EPA determines that a recipient's accounting
system does not meet the standards in Section 30.21, additional
pertinent information to further monitor awards may be obtained
upon written notice to the recipient until such time as the
system is brought up to standard. EPA, in obtaining this
information, shall comply with report clearance requirements of 5
CFR part 1320.
(3) EPA may shade out any line item on any report if not
necessary.
(4) EPA may accept the identical information from the
recipients in machine readable format or computer printouts or
electronic outputs in lieu of prescribed formats.
44
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(5) EPA may provide computer or electronic outputs to
recipients when such expedites or contributes to the accuracy of
reporting.
30.53 Retention and access requirements for records.
(a) This section sets forth requirements for record
retention and access to records for awards to recipients. EPA
shall not impose any other record retention or access
requirements upon recipients.
(b) Financial records, supporting documents, statistical
records, and all other records pertinent to an award shall be
retained for a period of three years from the date of submission
of the final expenditure report or, for awards that are renewed
quarterly or annually, from the date of the submission of the
quarterly or annual financial report, as authorized by EPA. The
only exceptions are the following.
(1) If any litigation, claim, or audit is started before
the expiration of the 3-year period, the records shall be
retained until all litigation, claims or audit findings involving
the records have been resolved and final action taken.
(2) Records for real property and equipment acquired with
Federal funds shall be retained for 3 years after final
disposition.
(3) When records are transferred to or maintained by EPA,
the 3-year retention requirement is not applicable to the
recipient.
(4) Indirect cost rate proposals, cost allocations plans,
etc. as specified in paragraph 30.53(g).
(c) Copies of original records may be substituted for the
original records if authorized by EPA.
(d) EPA shall request transfer of certain records to its
custody from recipients when it determines that the records
possess long term retention value. However, in order to avoid
duplicate recordkeeping, EPA may make arrangements for recipients
to retain any records that are continuously needed for joint use.
(e) EPA, the Inspector General, Comptroller General of the
United States, or any of their duly authorized representatives,
have the right of timely and unrestricted access to any books,
documents, papers, or other records of recipients that are
pertinent to the awards, in order to make audits, examinations,
excerpts, transcripts and copies of such documents. This right
also includes timely and reasonable access to a recipient's
personnel for the purpose of interview and discussion related to
45
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such documents. The rights of access in this paragraph are not
limited to the required retention period, but shall last as long
as records are retained.
(f) Unless required by statute, EPA shall not place
restrictions on recipients that limit public access to the
records of recipients that are pertinent to an award, except when
it can be demonstrated that such records shall be kept
confidential and would have been exempted from disclosure
pursuant to the Freedom of information Act (5 U.S.C. 552) if the
records had belonged to EPA.
(g) Indirect cost rate proposals, cost allocations plans,
etc. Paragraphs (g)(1) and (g)(2) apply to the following types
of documents, and their supporting records: indirect cost rate
computations or proposals, 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).
(l) If submitted for negotiation. If the recipient submits
to EPA or the subrecipient submits to the recipient the proposal,
plan, or other computation to form the basis for negotiation of
the rate, then the 3-year retention period for its supporting
records starts on the date of such submission.
(2) If not submitted for negotiation. If the recipient is
not required to submit to EPA or the subrecipient is not required
to submit to the recipient the proposal, plan, or other
computation for negotiation purposes, then the 3-year retention
period for the proposal, plan, or other computation and its
supporting records starts at the end of the fiscal year (or other
accounting period) covered by the proposal, plan, or other
computation.
30.54 Quality assurance.
If the project officer determines that the grantee's project
involves environmentally related measurements or data generation,
the grantee shall develop and implement quality assurance
practices consisting of policies, procedures, specifications,
standards, and documentation sufficient to produce data of
quality adequate to meet project objectives and to minimize loss
of data due to out-of-control conditions or malfunctions. The
quality system must comply with the requirements of ANSI/ASQC E4,
"Specifications and Guidelines for Quality Systems for
Environmental Data Collection and Environmental Technology
Programs."
Termination and Enforcement
30.60 Purpose of termination and enforcement.
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Sections 30.61 and 30.62 set forth uniform suspension,
termination and enforcement procedures.
30.61 Termination.
(a) Awards may be terminated in whole or in part only if
(1), (2) or (3) apply.
(1) By EPA, if a recipient materially fails to comply with
the terms and conditions of an award.
(2) By EPA with the consent of the recipient, in which case
the two parties shall agree upon the termination conditions,
including the effective date and, in the case of partial
termination, the portion to be terminated.
(3) By the recipient upon sending to EPA written
notification setting forth the reasons for such termination, the
effective date, and, in the case of partial termination, the
portion to be terminated. However, if EPA determines in the case
of partial termination that the reduced or modified portion of
the grant will not accomplish the purposes for which the grant
was made, it may terminate the grant in its entirety under either
paragraphs (a)(1) or (2).
(b) If costs are allowed under an award, the
responsibilities of the recipient referred to in paragraph
30.71(a), including those for property management as applicable,
shall be considered in the termination of the award, and
provision shall be made for continuing responsibilities of the
recipient after termination, as appropriate.
30.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially
fails to comply with the terms and conditions of an award,
whether stated in a Federal statute, regulation, assurance,
application, or notice of award, EPA may, in addition to imposing
any of the special conditions outlined in Section 30.14, take one
or more of the following actions, as appropriate in the
circumstances.
(1) Temporarily withhold cash payments pending correction
of the deficiency by the recipient or more severe enforcement
action by EPA.
(2) Disallow (that is, deny both use of funds and any
applicable matching credit for) all or part of the cost of the
activity or action not in compliance.
(3) Wholly or partly suspend or terminate the current
award.
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(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action,
EPA shall provide the recipient an opportunity for hearing,
appeal, or other administrative proceeding to which the recipient
is entitled under any statute or regulation applicable to the
action involved. EPA's Dispute Provisions found at 40 CFR Part
31, Subpart F, Disputes, are applicable to assistance awarded
under the provisions of this Part.
(c) Effects of suspension and termination.
Costs of a recipient resulting from obligations incurred by
the recipient during a suspension or after termination of an
award are not allowable unless EPA expressly authorizes them in
the notice of suspension or termination or subsequently. Other
recipient costs during suspension or after termination which are
necessary and not reasonably avoidable are allowable if (1) and
(2) apply.
(1) The costs result from obligations which were properly
incurred by the recipient before the effective date of suspension
or termination, are not in anticipation of it, and in the case of
a termination, are noncancellable.
(2) The costs would be allowable if the award were not
suspended or expired normally at the end of the funding period in
which the termination takes effect.
(d) Relationship to debarment and suspension. The
enforcement remedies identified in this section, including
suspension and termination, do not preclude a recipient from
being subject to debarment and suspension under E.O.s 12549 and
12689 and EPA's implementing regulations (see Section 30.13).
30.63 Disputes.
(a) Disagreements should be resolved at the lowest possible
level.
(b) If an agreement cannot be reached, the EPA disputes
decision official will provide a written final decision. The EPA
disputes decision official is the individual designated by the
award official to resolve disputes concerning assistance
agreements. If the dispute cannot be resolved the procedures
outlined at 40 CFR Part 31, Subpart F, should be followed.
SUBPART D - After-the-Award Requirements
30.70 Purpose.
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Sections 30.71 through 30.73 contain closeout procedures and
other procedures for subsequent disallowances and adjustments.
30.71 Closeout procedures.
(a) Recipients shall submit, within 90 calendar days after
the date of completion of the award, all financial, performance,
and other reports as required by the terms and conditions of the
award. EPA may approve extensions when requested by the
recipient.
(b) Unless EPA authorizes an extension, a recipient shall
liquidate all obligations incurred under the award not later than
90 calendar days after the funding period or the date of
completion as specified in the terms and conditions of the award
or in agency implementing instructions.
(c) EPA shall make prompt payments to a recipient for
allowable reimbursable costs under the award being closed out.
(d) The recipient shall promptly refund any balances of
unobligated cash that EPA has advanced or paid and that is not
authorized to be retained by the recipient for use in other
projects. OMB Circular A-129 governs unreturned amounts that
become delinquent debts.
(e) When authorized by the terms and conditions of the
award, EPA shall make a settlement for any upward or downward
adjustments to the Federal share of costs after closeout reports
are received.
(f) The recipient shall account for any real and personal
property acquired with Federal funds or received from the Federal
Government in accordance with Sections 30.31 through 30.37.
(g) In the event a final audit has not been performed prior
to the closeout of an award, EPA shall retain the right to
recover an appropriate amount after fully considering the
recommendations on disallowed costs resulting from the final
audit.
30.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the
following.
(1) The right of EPA to disallow costs and recover funds on
the basis of a later audit or other review.
(2) The obligation of the recipient to return any funds due
as a result of later refunds, corrections, or other transactions.
49
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(3) Audit requirements in Section 30.26.
(4) Property management requirements in Sections 30.31
through 30.37.
(5) Records retention as required in Section 30.53.
(b) After closeout of an award, a relationship created
under an award may be modified or ended in whole or in part with
the consent of EPA and the recipient, provided the
responsibilities of the recipient referred to in paragraph
30.73(a), including those for property management as applicable,
are considered and provisions made for continuing
responsibilities of the recipient, as appropriate.
30.73 Collection of amounts due.
(a) Any funds paid to a recipient in excess of the amount
to which the recipient is finally determined to be entitled under
the terms and conditions of the award constitute a debt to the
Federal Government. If not paid within a reasonable period after
the demand for payment, EPA may reduce the debt by (1), (2) or
(3).
(l) Making an administrative offset against other requests
for reimbursements.
(2) Withholding advance payments otherwise due to the
recipient.
(3) Taking other action permitted by statute.
(b) Except as otherwise provided by law, EPA shall charge
interest on an overdue debt in accordance with 4 CFR Chapter II,
"Federal Claims Collection Standards."
Appendix A
Contract Provisions
All contracts awarded by a recipient, including small
purchases, shall contain the following provisions as applicable:
1. Equal Employment Opportunity - All contracts shall
contain a provision requiring compliance with E.O. 11246, "Equal
Employment Opportunity," as amended by E.O. 11375, "Amending
Executive Order 11246 Relating to Equal Employment Opportunity,"
and as supplemented by regulations at 41 CFR part 60, "Office of
Federal Contract Compliance Programs, Equal Employment
Opportunity, Department of Labor."
50
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2. Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40
U.S.C. 276c) - All contracts and subgrants in excess of $100,000
for construction or repair awarded by recipients and
subrecipients shall include a provision for compliance with the
Copeland "Anti-Kickback" Act (18 U.S.C. 874), as supplemented by
Department of Labor regulations (29 CFR part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in
Whole or in Part by Loans or Grants from the United States").
The Act provides that each contractor or subrecipient shall be
prohibited from inducing, by any means, any person employed in
the construction, completion, or repair of public work, to give
up any part of the compensation to which he is otherwise
entitled. The recipient shall report all suspected or reported
violations to EPA.
3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7) -
When required by Federal program legislation, all construction
contracts awarded by the recipients and subrecipients of more
than $2000 shall include a provision for compliance with the
Davis-Bacon Act (40 U.S.C. 276a to a-7) and as supplemented by
Department of Labor regulations (29 CFR part 5, "Labor Standards
Provisions Applicable to Contracts Governing Federally Financed
and Assisted Construction"). Under this Act, contractors shall
be required to pay wages to laborers and mechanics at a rate not
less than the minimum wages specified in a wage determination
made by the Secretary of Labor. In addition, contractors shall
be required to pay wages not less than once a week. The
recipient shall place a copy of the current prevailing wage
determination issued by the Department of Labor in each
solicitation and the award of a contract shall be conditioned
upon the acceptance of the wage determination. The recipient
shall report all suspected or reported violations to EPA.
4. Contract Work Hours and Safety Standards Act (40 U.S.C.
327-333) - Where applicable, all contracts awarded by recipients
in excess of $100,000 for construction contracts and in excess of
$2500 for other contracts that involve the employment of
mechanics or laborers shall include a provision for compliance
with Sections 102 and 107 of the Contract Work Hours and Safety
Standards Act (40 U.S.C. 327-333), as supplemented by Department
of Labor regulations (29 CFR part 5). Under Section 102 of the
Act, each contractor shall be required to compute the wages of
every mechanic and laborer on the basis of a standard work week
of 40 hours. Work in excess of the standard work week is
permissible provided that the worker is compensated at a rate of
not less than 1/2 times the basic rate of pay for all hours
worked in excess of 40 hours in the work week. Section 107 of
the Act is applicable to construction work and provides that no
laborer or mechanic shall be required to work in surroundings or
under working conditions which are unsanitary, hazardous or
dangerous. These requirements do not apply to the purchases of
supplies or materials or articles ordinarily available on the
51
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open market, or contracts for transportation or transmission of
intelligence.
5. Rights to Inventions Made Under a Contract or
Agreement - Contracts or agreements for the performance of
experimental, developmental, or research work shall provide for
the rights of the Federal Government and the recipient in any
resulting invention in accordance with 37 CFR part 401, "Rights
to Inventions Made by Nonprofit Organizations and Small Business
Firms Under Government Grants, Contracts and Cooperative
Agreements," and any implementing regulations issued by EPA.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal
Water Pollution Control Act (33 u.s.c. 1251 et seq.), as amended
- Contracts and subgrants of amounts in excess of $100,000 shall
contain a provision that requires the recipient to agree to
comply with all applicable standards, orders or regulations
issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and
the Federal Water Pollution Control Act as amended (33 U.S.C.
1251 et seq.). Violations shall be reported to the Regional
Office of the Environmental Protection Agency (EPA).
7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352) -
Contractors who apply or bid for an award of more than $100,000
shall file the required certification. Each tier certifies to
the tier above that it will not and has not used Federal
appropriated funds to pay any person or organization for
influencing or attempting to influence an officer or employee 01
any agency, a member of Congress, officer or employee of
Congress, or an employee of a member of Congress in connection
with obtaining any Federal contract, grant or any other award
covered by 31 U.S.C. 1352. Each tier shall also disclose any
lobbying with non-Federal funds that takes place in connection
with obtaining any Federal award. Such disclosures are forwarded
from tier to tier up to the recipient.
8. Debarment and Suspension (E.O.s 12549 and 12689) - No
contract shall be made to parties listed on the General Services
Administration's List of Parties Excluded from Federal
Procurement or Nonprocurement Programs in accordance with E.O.s
12549 and 12689, "Debarment and Suspension." This list contains
the names of parties debarred, suspended, or otherwise excluded
by agencies, and contractors declared ineligible under statutory
or regulatory authority other than E.G. 12549. Contractors with
awards that exceed the small purchase threshold shall provide the
required certification regarding its exclusion status and that of
its principal employees.
PART 33 - PROCUREMENT UNDER ASSISTANCE AGREEMENTS
2. Upon promulgation of this rule 40 CFR Part 33 is
rescinded.
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APPENDIX E
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APPENDIX E
40 CFR PART 31, "UNIFORM
ADMINISTRATIVE REQUIREMENTS FOR
GRANTS AND COOPERATIVE AGREEMENTS
TO STATE AND LOCAL GOVERNMENTS"
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Environmental Protection Agency
Part 31
PART 31— UNIFORM ADMIN1STRA
TIVE REQUIREMENTS FOR GRANTS
AND COOPERATIVE AGREEMENTS
TO STATE AND LOCAL GOVERN-
MENTS
Subpart A—General
Sec.
31.1
31.2
31.3
31.4
31.5
31.6
Purpose and scope of this part.
Scope of subpart.
Definitions.
Applicability.
Effect on other issuances.
Additions and exceptions.
Subpart B—Pro-Award Requirements
31.10 Forms for applying for grants.
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.
Subpart C—Pott-Award Requirement!
FINANCIAL ADMINISTRATION
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, PROPERTY. AND SUBAWARDS
31.30
31.31
31.32
31.33
31.34
31.35
ed parties.
31.36 Procurement.
31.37 Subgrants.
Changes.
Real property.
Equipment.
Supplies.
Copyrights.
Subawards to debarred and suspend-
REPORTS, RECORDS. RETENTION, AND
ENFORCEMENT
31.40 Monitoring and reporting program
performance.
31.41 Financial reporting.
31.42 Retention and acr.i'ss requirements
for records.
31.43 Enforcement.
31.44 Termination for convenience.
31.45 Quality assurance.
Swbpart 0—After-the-Grant Requirement*
31.50 Closeout.
A*** an AMP** I**"
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§31.1
31.51 Later disallowances and adjustments.
31.52 Collection of amounts due.
Subpart E— Entitlements [Reserved]
Subpart F — Disputes
31.70 Disputes
APPENDIX A— PART 30 AUDIT REQUIREMENTS
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
U.S.C. 300f et seq.; 7 U.S.C. 136 et seq.; 15
U.S.C. 2601 et seq.; 42 U.S.C. 9801 et seq.; 20
U.S.C. 4011 et seq.; 33 U.S.C. 1401 et seq.
SOURCE: 53 PR 8075 and 8087. Mar. 11,
1988. unless otherwise noted.
EFFECTIVE DATE Noi*. At 53 PR 8075 ad
8087. Mar. 11. 1988, Part 31 was added, ef-
fective October 1. 1988.
Subport A — General
§ 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.
§ 31.2 Scope of subpart.
This subpart contains general rules
pertaining to this part and procedures
for control of exceptions from this
part.
§ 31.3 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 Edition)
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 basis,
such as kinds of activities that can be
supported by grants under a particular
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 as
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 in-kind
contributions and the portion of the
costs of a federally assisted project or
program not borne by the Federal
Government.
"Cost-type contract," means a con-
tract or subcontract under a .front in
which the contractor or suocontractcr
-------
iiniviip©(n)(nn)Q[nifl@J
Agoney
§31.3
is paid on the basis of the costs it
incurs, with or without a 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 SP-269
"Financial Status Report" (or other
equivalent report); (2) for construction
grants, the SP-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 con^unity (includ-
ing any Native village as defined in
section 3 of the Alaska Native Claims
Settlement Act, 8§ 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 do
-------
§31.4
40 OFR Ch. I (7-1-83
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 01 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)^n 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
grantee or subgrantee. "Terminatic
does not include:
(1) Withdrawal of funds awarded
the basis of the grantee's undere?
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, regu
tions, or the award document.
"Third party in-kind contribution
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 i
ports prepared on a cash basis me;
the amount of obligations incurred ;
the grantee that has not been pa:
For reports prepared on an accm
expenditure basis, they represent t.
amount of obligations incurred by t.
grantee for which an outlay has n
been recorded.
"Unobligated balance" means tl
portion of the funds authorized by tl
Federal agency that has not been ob
gated by the grantee and is dete
mined by deducting the cumulative o
ligations from the cumulative func
authorized.
§31.4 Applicability.
(a) General Subparts A-D of th.
part apply to all grants and subgram
to governments, except where incoi
sistent with Federal statutes or wit
regulations authorized in accordant
with the exception provision of § 31.
or:
(1) Grants and subgrants to SUi
and local institutions of higher educs
tion or State and local hospitals.
(2) The block grants authorized b:
the Omnibus Budget Reconciliatici
360
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Environmental Protection Agency
§31.6
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-
III 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, Mw^al Health S« .ice
for the Homeless Block Grant).
(3) 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);
(ii) 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 (Medicaid)
(Title XIX of the Act) not including
the State Medicaid Fraud Control pro-
gram authorized by section
1903(a)(6)(B).
(4) Entitlement grants under the fol-
lowing programs of The National
School Lunch Act;
(i) School Lunch (section 4 of the
Act),
(ii) Commodity Assistance (section 6
of the Act),
(iii) Special Meal Assistance (seclion
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:
(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 fcf
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
§ 31.4(a) (3) through (8) are subject to
Subpart E.
§ 31.5 Effect on other issuances.
All other grants administration pro-
visions of codified program regula-
tions, program manuals, handbooks
and other nonregulatory materials
whicn are inconsistent with this part
are superseded, except to the extent
they are required by statute, or au-
thorized in accordance with the excep-
tion provision in § 31.6.
§ 31.6 Additions and exceptions
(a) For classes of grants and grant
ees subject to this part. Federal age._
cies may not impose additional admin-
istrative requirements except in codi-
fied regulations published in the FED-
ERAL REGISTER.
-------
§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.
[53 FR 8068 and 8087. Mar. 11. 1988, .ind
amended at 53 FR 8075, Mar. 11, 1988]
EFFECTIVE DATE NOTE: At 53 FR 8075, Mar.
11. 1988. 5 31.6 (0(1) and (d) were added, ef-
fective October 1, 1988.
Subpart B—Pre-Award Requirements
§ 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 forma 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 Edition)
(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 will
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 plans.
(a) Scope. The statutes for some pro-
grams require States to submit plans
before receiving grants. Under regula-
tions implementing Executive 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 Sut«
may:
(1) Cite by number the statutory or
regulatory provisions requiring the as-
surances and affirm that it gives the
assurances required by those provi-
sions,
(2) Repeat the assurance language in
the statutes or regulations, or
362
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(3) Develop its own 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 oem 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
and shall be included in the award.
(b) Special conditions or restrictions
may include:
(1) 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:
(1) The nature of the special condi-
tions/restrictions;
(2) The reason(s) for imposing them;
(3) The corrective actions which
must be taken before they will be re-
moved and the time allowed for 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 all appli-
cable Federal laws including:
(a) Section 306 of the Clean Air Act,
(42 U.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-
[53 PR 8075. Mar. 11. 1988]
EFFECTIVE DATE NOTE: At 53 FR 8075, Mar.
11. 19J 8, §31.13 was added, effective Octo-
ber 1, 1988.
Subpart C — Post-Award Requirements
FINANCIAL ADMINISTRATION
§ 31.20 Standards 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
-------
§31.21
~2) Accounting records. Grantees
^d 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-
"red 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 most be fol-
lowed whenever advance payment pro-
cedures are used. Grantees must estab-
lish reasonable procedures to ensure
the receipt of reports on subgrantees'
0*^1 balances and cash disbursements
iL sufficient time to enable them to
prepare complete and accurate cash
transactions reports to the awarding
agency. When advances are made by
letter-of-credit or electronic transfer
40 CFR Ch. I (7-1-33 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 Pavment.
(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) Baste 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.
(e) Working capital advances. If a
grantee cannot meet the criteria for
advance payments described in para-
graph (c) of this section, and the Fed-
eral agency has determined that reim-
-------
Environmental Protection Agency
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 capital advance method of
payment shall not be used by grantees
or subgrantees if the reason for using
such method is the unwillingness or
inability of the grantee to provide
timely advances to the subgrantee to
meet the subgrantee's actual cash dis-
bursements.
(f) Effect of program income, re-
funds, and audit recoveries 01 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
(f)(l) 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(0.
(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. (1) 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.
§ 31.22 Allowable costs.
(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
-------
9 41.24
v.n. i i/-i-oo
for the costs of a—
Stale, local or Indian tribal
government.
Pnvate nonprofit organization
other than an (1) institution
of higher education, (2) |
hospital, or (3) organization ;
Lisa the pnnciples in—
OMB Ocular A-87
OBM Circular A-122.
named in OMB Circular A
122 as not subject to that
circular
Educational institutions
For-profrt organization other
than a hospital and an or-
ganization named in OBM
Circular A-122 as not sub-
ject to that circular.
OMB Circular A-21.
48 CFR Part 31. Contract
Cost Principles and Proce-
dures, or uniform cosi ac-
counting standards that
comply with cost pnnciples
acceptable to the Federal
agency.
§ 31.23 Period fo availability of funds.
(a) General. Where a funding period
is specified, a grantee may charge to
the award only costs resulting from
obligations of the funding period
unless carryover of unobligated 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-269). The Fed-
eral agency may extend this deadline
at the request of the grantee.
§ 31.24 Matching or cost sharing.
(a) Basic rule: Costs 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 parties.
(2) The value of third party in-kind
contributions applicable to the period
to which the cost sharing or matching
requirements applies.
(b) Qualifications and exceptions—
(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 nther 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-
fying 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 Protection 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, (i) Third party
in-kind contributions count towards
satisfying a cost sharing or matching
requirement only where, if the party
receiving the contributions were to
pay for them, the payments would be
allowable costs.
(ii) Some third party in-kind 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.
(iii) 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 of donated services—
(1) Volunteer services. Unpaid services
provided to a grantee or subgrantee by
individuals will oe 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 noes not have employ-
ee* performing simitar wor-, •;''? --ales
will be consistent with those ordinan'y
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 (c)(l) 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 suppues 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.
(c) Valuation of third party donated
equipment, ouildings, 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 (e)(2) (i) and (ii) of this section
apply:
(i) If approval is obtained from the
awarding agency, the market value at
the time of donation of the donated
equipment or buildings and the fair
rental rate of the donated land may be
counted as cost sharing or matching.
In the case of a subgrant, the terms of
the grant agreement may require ::ha,
the sppr«v.'i.i be obtained from ':.h-'
Federal agency 3-5 weil as the graiuei
In all cases, th> approval may be 2-lv*"..
only if a purchase of the equipment or
rental of the land would be approved
367
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§31.25
40 CfR Qi. I (7-1-88 fcditic
as an allowable direct cost. 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-snaring or matching.
(ii) If approval is not obtained under
paragraph (eX2XD of this section, no
amount may be counted for donated
land, and only depreciation or use al-
lowances may be counted for donated
equipment and buildings. The depre-
ciation or use allowances for this prop-
erty are not treated as third party in-
kind contributions. Instead, they are
treated as costs incurred by the grant-
ee or subgrantee. They are computed
and allocated (usually as indirect
costs) in accordance with the cost
principle^ specified in § in the
same way as depreciation or use allow-
ances for purchased equipment and
buildings. The amount of depreciation
or use v allowances for donated equip-
ment And buildings is based on. the
property's market value at the time it
was donated.
(f) Valuation of grantee or tubgran-
tee donated real property for construc-
tion/acquisition. 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 sharing or matching.
(g) Appraital 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 space in a building.
In these cases, the Federal agency
may require the market value or fair
rental value be set by an independent
appraiser, and that the value or rate
be certified by the grantee. This re-
quirement will also be imposed by the
grantee on subgrantees.
S 31.25 Program income.
(a) General Grantees are encour-
aged to earn income to defray pro-
gram costs. 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 comm<
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 Fedej
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 endi
date of the award reflected in the fir
financial report.
(c) Cost of .generating progri
income. If authorized by Federal rei
lations or the grant agreement, co:
incident to the generation of progn
income may be deducted from grc
income to determine program incon
(d) Governmental revenues. Tax
special assessments, levies, fines, a
other such revenues raised by a grai
ee or subgrantee are not progrt
income unless the revenues are spec!
cally identified in the grant agreeme
or Federal agency regulations as pi
gram income.
(e) Royalties. Income from royalt:
and license fees for copyrighted ma
rial, patents, and inventions develop
by a grantee or subgrantee is progrt
income only if the revenues are spec
ically identified in the grant agri
ment or Federal agency regulations
program income. (See S 31.34.)
(f) Property. Proceeds from the st
of real property or equipment will
handled in accordance with the i
quirements of SS 31.31 and 31.32.
(g) Use of program income. Progrt
income shall be deducted from outla
which may be both Federal and nc
Federal as described below, unless t
Federal agency regulations or t
grant agreement specify another alt
native (or a combination of the alt-
natives). In specifying alternatives, t
Federal agency may distinguish I
tween income earned by the grant
and income earned by subgrantees a
between the -. sources, kinds.
-------
Environmental Protection Agency
amounts 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) Cost sharing or matching. When
authorized, program income may be
used to meet the cost sharing or
matching requirement of the grant
agreement. The amount of the Federal
grant award remains the same.
(h) Income after the award period.
There are no Federal requirements
governing the disposition of program
income earned after the end of the
award period (i.e., until the ending
date of the final financial report, see
paragraph, (a) of this section), unless
the terms of the agreement or the
Federal agency regulations provide
otherwise.
§ 31.2* Noo-fW«nl audit.
(a) Boric rate. Grantees and sub-
grantees are responsible for obtaining
audits, in accordance with the Single
Audit Art of 1984 (31 U.S.C. 7501-7)
and Federal agency implementing reg-
ulations. The audits shall be made by
an independent auditor in accordance
with generally accepted government
auditing standards covering firmnHai
and compliance audits.
4b>- Subgrantees. 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:
(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 organizations) 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 complied 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 hatf
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
(5) Require each subgrantee to
permit independent auditors to have
access to the records and financial
statements.
(c) Auditor selection. In arranging
for audit services, § 31.36 shall be fol-
lowed,
CHANGES, PROPERTY. AND SUBA WARDS
331.30 Change*.
(*) General. Grant
and subgran-
tees 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, unlei
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
40 CFR Ch. I (7-1-88 Edition)
orior written approval of the awarding
,gency.
(b) Relation to cost principles. The
applicable cost principles (see §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:
(i) Any revision which would result
in the need for additional funding.
(ii) Unless waived by the awarding
agency, cumulative transfers among
direct cost categories, or, if applicable,
among separately budgeted programs,
projects, functions, or activities which
exceed or are expected to exceed ten
percent of the current total approved
Budget, whenever the awarding agen-
-y's share exceeds $100,000.
(iii) Transfer of funds allotted for
training allowances (i.e., from direct
payments to trainees to other expense
categories).
(2) Construction projects. Grantees
and subgrantees shall obtain prior
written approval for any budget revi-
sion which would result in the need
for additional funds.
(3) Combined construction and non-
construction projects. When a grant or
subgrant provides funding for both
construction and nonconstruction ac-
tivities, the grantee or subgrantee
must obtain prior written approval
from the awarding agency before
making any fund or budget transfer
from nonconstruction to construction
or vice versa.
(d) Programmatic changes. Grantees
or subgrantees must obtain the prior
approval of the awarding agency
whenever any of the following actions
is anticipated:
(1) Any revision of the scope or ob-
jectives of the project (regardless of
whether there is an associated budget
revision requiring prior approval).
(2) Need to extend the period of
availability of funds.
(3) Changes in key persons in cases
where specified in an application or a
grant award. In research projects, a
change in the project director or prin-
cipal investigator shall always require
approval unless waived by the award-
ing agency.
(4) Under nonconstruction projects.
contracting out, subgranting (if au-
thorized by law) or otherwise obtain-
ing the services of a third party to per-
form activities which are central to
the purposes of the award. This ap-
proval requirement is in addition to
the approval requirements of § 31.36
but does not apply to the procurement
of equipment, supplies, and general
support services.
(e) ..dd.iti.onal prior approval re-
quirements. The awarding agency may
not require prior approval for any
budget revision which is not described
in paragraph (c) of this section.
(f) Requesting prior approval. (DA
request for prior approval of any
budget revision will be in the same
budget formal the grantee used in its
application and shall be accompanied
by a narrative justification for the
proposed revision.
(2) A request for a prior .approval
under the applicable Federal cost prin-
ciples (see § 31.22) may be made by
letter.
(3) A request by a subgrantee for
prior approval will be addressed in
writing to the grantee. The grantee
will promptly review such request and
shall approve or disapprove the re-
quest in writing. A grantee will not ap-
prove any budget or project revision
which is inconsistent with the purpose
or terms and conditions of the Federal
grant to the grantee. If the revision.
requested by the subgrantee would
result in a change to the grantee's ap-
proved project which requires Federal
prior approval, the grantee will obtain
the Federal agency's approval before
approving the subgrantee's request.
§31.31 Real property.
(a) Title. Subject to the obligations
and conditions set forth in this sec-
tion, title to real property acquired
under a grant or subgrant will vest
upon acquisition in the grantee or sub-
grantee respectively.
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Environmental Protection Agency
(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) Sale 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 (e) of
this section,
(c) Use. (1) 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 -Mnues
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
will not interfere with the work on the
projects or program for which it was
originally acquired. First preference
for other use shall be given to other
programs or projects supported by the
awarding agency. User fees should be
considered if appropriate.
(3) Notwithstanding the 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
companies 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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40 CFR Ch. I (7-1-88 Edition)
ices 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
~-Wding agency's share of the equip-
jnt.
(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
needed, the grantee or subgrantee will
request disposition instructions from
the Federal agency.
(g) Right to transfer title. The Feder-
al awarding agency may reserve the
right to transfer title to the Federal
Government or a third part named by
the awarding agency when such a
third party is otherwise eligible under
existing statutes. Such transfers shall
be subject to the following standards:
(1) The property shall be identified
in the grant or otherwise made known
to the grantee in writing.
(2) The Federal awarding agency
shall issue disposition instruction
within 120 calendar days after the end
of the Federal support of the project
for which it was acquired. If the 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.
§ 31.33 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.
§ 31.35 Subawards 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."
§ 31.36 Procurement
<^al 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.
§31.3o
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 State 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-
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31.36
v.n. t i,/-i-oo cauion;
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 us contractor intep^'ty, com-
pliance with public policy, io-ord 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-
slow'.ng: 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—
(i) 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 r-lieve the grantee or
subgrantee of any contractual respon-
sibilities under its contracts. Federal
agencies will not substitute their judg-
ment for tha' of the grantee or sub-
rrantee unless the matter is primarily
jt 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
(ii) 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.
^(c) Competition. (1) All procurement
transactions will be conducted in a
manner providing full and open com-
petition consistent with the standards
of § 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,
(iii) 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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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 prequalified lists of
persons, 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 (c)(5)(i)-(iii) 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 domestii*
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 all 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 nof
mined, produced or manufactured irr
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.
(iii) All bidding documents, suba-
greements, and, if appropriate, re-
quests for proposals must contain the
following "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.
(dJ Methods of procurement to be fol-
lowed. (1) Procurement by small pur-
chase procedures. Small purchase pro'
cedures are those relatively simple ancS-
informal procurement methods for se-
curing services, supplies, or other
375
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§31.36
40 CFR Ch. I (7-1-88 Edition)
property that do not cost more than
"5,000 in the aggregate. If small pur-
-.iase procurements are used, price or
rate quotations will be obtained from
in adequate number of qualified
sources.
(2) Procurement by sealed bids
[formal advertising). Bids are publicly
solicited and a firm-fixed-price con-
tact (lump sum or unit price) is
iwarded to the responsible bidder
jvhose bid, conforming with all the
naterial terms and conditions of the
nvitation for bids, is the lowest in
3rice. The sealed bid method is the
sreferred method for procuring con-
struction, if the conditions in
5 31.36(d)(2)(i) apply.
(i) In order for sealed biding to be
feasible, the following conditions
should be present:
(A) A complete, adequate, and realis-
tic specification or purchase descrip-
tion is available;
(B) Two or more responsible bidders
ire willing and able to compete effec-
tively for the business; and
.(C) The procurement lends itself to
'inn fixed price contract and the se-
ection of the successful bidder can be
nade principally on the basis of price.
(ii)- 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
mown suppliers, providing them suffi-
:ient time prior to the date set for
>pening the bids;
(B) The invitation for bids, which
vill include any specifications and per-
inent attachments, shall define the
terns or services in order for the
ndder to properly respond;
(C) All bids will be publicly opened
it the time and place prescribed in the
nvitation for bids;
(D) A firm fixed-price contract
tward will be made in writing to the
owest responsive and responsible
)idder. Where specified in bidding doc-
iments, factors such as discounts,
ransportation cost, and life cycle
shall be considered in determin-
; which bid is lowest. Payment dis-
:ounts will only be used to determine
he low bid when prior experience in-
iicates that such discounts are usually
aken advantage of; and
(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) P-oposals 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.
^££ Contracting wiL. ~.nall and mi-
nority firms, women's business enter-
prise and labor surplus area firms. (U
The grantee and subgrantee will take
all 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) (i) through (v) of this
section.
(f)_ Contract cost and price. (1)
Grantees and subgrantees must per-
form a cost or price analysis in connec-
§31.36
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) Costs 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.
^g^ 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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3
40 CFR Ch. I (7-1-88 Edition)
is needed to ensure that the item and/
or service specified is the one being
proposed for purchase. This review
generally will take place prior to 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 [ delete
","] procurement documents, such as
requests for proposals or invitations
for bids, independent cost estimates,
etc., when:
(i) A grantee's or subgran tee'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 (g)(2) of this section if the
awarding agency determines that its
procurement systems comply with the
standards of this section.
(i) A grantee or subgrantee may 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.
^h^, 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:
(1) A 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.
H] Contract provisions. A grantee's
and subgrantee's contracts must con-
tain provisions in paragraph (i) of thi^
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
tractors violate or breach contract
terras, and provide for such sanctions
and penalties as may be appropriate.
(Contracts other than small pur-
chases)
(2) Termination for cause and lur
convenience by the grantee or sv fa-
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 $10,1)00 by grantees and their
contractors or subgrantees)
(4) Compliance v ch th° Copeland
"Anti-Kickback" Act (18 ij.&.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 Part 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 Ln 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,
§ 3T.36
the Comptroller General of the
United States, or any of their duly au-
thorized representatives to any books,
documents, papers, and records of U
Contractor which are directly pertr-
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 apolicable
standards, orders, or requirements
issued under section 306 of the Clear
Air Act (42 U.S.C. 1857(h)), section 508
01 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 subgrar.is 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).
(i) Payment to consultants. (1) EPA
will limit its participation in the salai
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 Ln 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.
OO 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 sen
ices for a waste-water treatment works-
project and wishes to retain that firm
379
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§31.37
40 CFR Ch. I (7-1-33 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
(iii) The pan tee 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 (k)(l) 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 § 31.36.
[53 FR 8068 and 8087, Mar. 11. 1988, and
amended at 53 FR 8075. Mar. 11. 1988]
EFFECTIVE DATE NOTE At 53 FR 8075, Mar.
11. 1988. 531.36 (c)(5), (j) and (k) were
added, effective October 1, 1988.
831.37 Subgrants.
(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 § 31.21; and
(4) Section 31.50.
REPORTS, RECORDS. RETENTION, AND
ENFORCEMENT
§31.40 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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Environmental Protection Agency
cover each program function or activi-
ty.
(b) Nonconstruction performance re-
ports. The Federal agency may, if it
decides that performance information
available from subsequent applications
contains sufficient information to
meet its programmatic needs, require
the grantee to submit a performance
report only upon expiration or 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 aue 30 days afte. 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.
(ii) The reasons for slippage if estab-
lished objectives were not met.
(lii) 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-
§31.41
age-of-completion data are relied on
heavily by Federal agencies to monitor
progress under construction g
and subgrants. The Federal agei
will require additional formal perfornr-
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 si££
visits as warranted by program nee
(f) Waivers, extensions. (1) Federal
agencies may 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.
§ 31.41 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
(ii) Requesting advances or rei/
bursements when letters of credit aic
not used.
381
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a «»i ••»
40 CFR Ch. I (7-1-88 Edition)
(2) Grantees need not apply the
-i^te or contribute to the accuracy of
porting. 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—(1)
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 § 31.41(e)(2)(iii).
(2) Accounting basis. Each grantee
will report program outlays and pro-
gram income on a cash or accrual basis
as prescribed by the awarding agency.
If the Federal agency requires accrual
information and the grantee's ac-
Mnting records are not normally
^._pt on the accural basis, the grantee
shall not be required to convert its ac-
counting system but shall develop
such accrual information through sind
analysis of the documentation on
hand.
(3) Frequency. The Federal agency
may prescribe the frequency of the
report for each project or program.
However, the report will not be re-
quired more frequently than quarter-
ly. If the Federal agency does not
specify the frequency of the report, it
will be submitted annually. A final
report will be required upon expira-
tion or termination of grant support.
(4) Due date. When reports are re-
quired on a quarterly or semiannual
basis, they will be due 30 days after
the reporting period. When required
on an annual basis, they will be due 90
days after the grant year. Final re-
ports will be due 90 days after the ex-
piration or termination of grant sup-
port.
(c) Federal Cash Transactions
Report—(1) 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 27 2a,
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. Lrrant-
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 annualized 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—(I) 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, ses
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 is treated in
§ 31.41(b)(3).
(2) Grants that support construction
activities paid by letter of credit, elec-
tronic funds transfer or Treasury
check advance, (i) When a construc-
tion grant is rrold by letter of credit,
electronic funds w/ansfer 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-
§31.4
er, frequency and due date shall t
governed by § 31.4Kb) (3) and (4).
(ii) When a construction grant
paid by Treasury check advanc*
based on periodic requests from tr
grantee, the advances will be reques
ed on the form specified in § 31.41(d
(iii) The Federal agency may subst
tute the Financial Status Report spe
ified in § 31.4Kb) for the Outla
Report and Request for Reimburs.
ment for Construction Programs.
(3) Accounting basis. The accountir
basis for the Outlay Report and R/
quest for Reimbursement for Coi
struction Programs shall be governe
by § 31.41(b)(2).
§31.42 Retention and access requiremen
for records.
(a) Applicability. (1) This section a>
plies to all financial and programmat:
records, supporting documents, stati:
tical records, and other records c
grantees or subgrantees which are:
(i) Required to be maintained by th
terms of this Part, program reguh
tions or the grant agreement, or
(ii) Otherwise reasonably considere
as pertinent to program regulations c
the grant agreement.
(2) This section does not apply c
records maintained by contractors c
subcontractors. For a requirement t
place a provision concerning records i
certain kinds of contracts, se
§31.36(i)(10).
(b) Length of retention period. C
Except as otherwise provided, recorc
must be retained for three years f roi
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 un'.
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 recordkee
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 C?R Ch. I (7-1-38 Edition;
when it determines that the records
•—possess long-term retention value.
/hen 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 expe- -Mture
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. Lf an expenditure report has
been waived, the retention period
starts on the day the report would
have been due.
(2) Real property and equipment
.ecords. 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
Mnge benefit rates).
(i) // submitted for negotiation. If
the proposal, plan, or other computa-
tion is required to be submitted to the
Federal Government (or to the grant-
ee) to form the basis for negotiation of
the rate, then the 3-year retention
period for its supporting records starts
from the date of such submission.
(ii) // not submitted for negotiation.
If the proposal, plan, or other compu-
tation is not required to be submitted
to the Federal Government (or to the
grantee) for negotiation purposes,
then the 3-year retention period for
the proposal plan, or computation and
its supporting records starts from end
of the fiscal year (or other accounting
period) covered by the proposal, plan,
or other computation.
(d) Substitution of microfilm. Copies
made by microfilming, photocopying,
or similar methods may be substituted
for the original records.
(e) Access to records—(1) Records of
grantees and subgrantees. The award-
ing agency and the Comptroller Gen-
eral of the United States, or any of
their authorized representatives, shall
have the right of access to any perti-
nent books, documents, papers, or
other records of grantees and subgran-
tees which are pertinent to the grant,
in order to make audits, examinations,
excerpts, and transcripts.
(2) Expiration of right of access. The
rights of access in this section must
not be limited to the required reten-
tion period but shall last as long as the
records are retained.
(f) Restrictions on public access.
The Federal Freedom of Information
Act (5 U.S.C. 552) does not apply to
records Unless required by Federal.
State, or local law, grantees and sub-
grantees are not required to permit
public access to their records.
§31.43 Enforcement.
(a) Remedies for noncom-oliance. If a
grantee or subgrantee materially fails
to comply with any term of an award,
whether stated in a Federal statute or
regulation, an assurance, in a State
plan or application, a notice of award,
or elsewhere, the awarding agency
may take one or more of the following
actions, as appropriate in the circum-
stances:
(1) Temporarily withhold cash pay-
ments pending correction of the defi-
ciency by the grantee or subgrantee or
384
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rrotection Agency
more severe enforcement action by the
awarding agency,
(2) Disallow (that is, deny both use
of funds and matching credit for) all
or part of the cost of the activity or
action not in compliance.
(3) Wholly or partly suspend or ter-
minate the current award for the
grantee's or subgrantee's program.
(i) EPA can also wholly or partly
annul the current award for the grant-
ee's or subgrantee's program,
(4) Withhold further awards for the
program, or
(5) Take other remedies that may be
legally available.
(b) Hearings, appeals. In taking an
enforcement action, the awarding
agency will provide the grantee or sub-
grantee an opportunity for such hear-
ing, appeal, or other administrative
proceeding to which the grantee or
subgrantee is entitled under any stat-
ute or regulation applicable to the
action involved.
(c) Effects of suspension and termi-
nation. Costs of grantee or subgrantee
resulting from obligations incurred by
the grantee or subgrantee during a
suspension or after termination of an
award, are not allowable unless the
awarding agency expressly authorizes
them in the notice of suspension or
termination or subsequently. Other
grantee or subgrantee costs during
suspension or after termination which
are necessary and not reasonably
avoidable are allowable if:
(1) The costs result from obligations
which were properly incurred by the
grantee or subgrantee before the ef-
fective date of suspension or termina-
tion, are not in anticipation of it, and,
in the case of a termination, are non-
cancellable, and,
(2) The costs would be allowable if
the award were not suspended or ex-
pired normally at the end of the fund-
ing period in which the termination
takes effect.
(d) Relationship to Debarment and
Suspension. The enforcement reme-
dies identified in this section, includ-
ing suspension and termination, do not
preclude grantee or subgrantee from
being subject to "Debarment and Sus-
pension" under E.O. 12549 (see
§ 31.35).
§31.50
[53 FR 8068 and 8087. Mar. 11. 1988, an
amended at 53 FR 8076, Mar. 11. 1988]
EFFECTIVE DATE NOTE: At 53 FR 8076, Mar.
I1., 1988, §31.43 (a)(3)(i) was added, effec-
tive October 1, 1988.
§ 31.44 Termination for convenience.
Except as provided in § 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 tlA
award was made, the awarding agency
may terminate the award in its entire-
ty under either § 31.43 or paragraph
(a) of this section.
§ 31.45 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 PR 8078. Mar. 11. 19881
DATE NOTE: At 53 FR 8076, Mar.
11. 1988. § 31.45 was added, effective Octo-
ber 1. 1988.
Subpart D — After-The-Grant
Requirements
§ 31.50 Closeout
(a) General The Federal agency will
close out the award when it deter-
mines that all applicable administra
ooc
-------
§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 (SF-271) (as applicable.)
(3) Final request for payment (SF-
270) (.if applicable).
(4) Invention disclosure (if applica-
ble).
(5) Federally-owned property report-
In accordance with § 31.32(f), a grant-
ee must submit an inventory of all fed-
erally owned property (as distinct
from property acquired with grant
funds) for which it is accountable and
request disposition instructions from
the Federal agency of property no
longer needed.
(c) Cost adjustment. The Federal
agency will, within 90 days after re-
ceipt of reports in paragraph (b) of
this section, make upward or down-
ward adjustments to the allowable
costs.
(d) Cash adjustments. (1) The Feder-
al agency will make prompt payment
to the grantee for allowable reimburs-
able costs.
(2) The grantee must immediately
refund to the Federal agency any bal-
ance of unobligated (unencumbered)
cash advanced that is not authorized
to be retained for use on other grants.
§ 31.51 Later disallowances and adjust-
ments.
The closeout of a grant does not
affect:
(a) The Federal agency's right to dis-
allow costs and recover funds on the
basis of a later audit or other review;
(b) The grantee's obligation to
return any funds due as a result of
later refunds, corrections, or other
transactions;
(c) Records retention as required in
§ 31.42;
(d) Property management require-
ments in §§ 31.31 and 31.32; and
(e) Audit requirements in § 31.26.
§ 31.52 Collection of amounts due.
(a) Any funds paid to a grantee in
excess of the amount to which the
grantee is finally determined to be en-
titled under the terms of the award
constitute a debt to the Federal Gov-
ernment. If not paid within a reasona-
ble period after demand, the Federal
agency may reduce the debt by:
(1) Making an adminstrative offset
against other requests for reimburse-
ments.
(2) Withholding advance payments
otherwise due to the grantee, or
(3) Other action permitted by law.
(b) Except where otherwise provide^
by statutes or regulations, the Federal
agency will charge interest on an over-
due debt in accordance with the Fed-
eral Claims Collection Standards (4
CFR Ch. II). The date from which in-
terest is computed is not extended by
litigation or the filing of any form of
appeal.
Subpart E—Entitlement [Reserved]
Subpart F—Disputes
SOURCE: 53 FR 8076, Mar. 11, 1988, unless
otherwise noted.
EFFECTIVE DATE NOTE: At 53 FR 8076, Mar.
11. 1988, Subpart F was added, effective Oc-
tober 1. 1988.
§ 31.70 Disputes.
(a) Disagreements should be re-
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 officials
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.
(1) For final decisions issued by an
EPA disputes decision official at Head-
quarters, the request for review shall
386
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Environmental Protection Agency
be filed with the Assistant Administra-
tor responsible for the assistance pro-
gram.
(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:
(1) A copy of the EPA disputes deci-
sion official's final decision;
(2) A statement of the amount in
dispute;
(3) A description of the issues in-
volved; and
(4) A concise statement of the objec-
tions to the final decision.
(p) The disputants may be repre-
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.
(i) 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.
Part 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 disputants)
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. After 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
§ 3L36(b)(12);
(3) National Environmental Policy
Act decisions under 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 FOR STATE AND LOCAL GOV-
ERNMENT RECIPIENTS
EXECUTIVE OFFICE OF 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 define 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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Part 31, App. A
40 CFR Ch. I (7-1-88 Edition)
7505 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 disadvantaged 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 tve --grams
they participate in.
c. State or local governments that receive
less 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 assistance" means as-
sistance provided by a Federal agency in the
form of grants, contracts, cooperative agree-
ments, 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-
grams, 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:~
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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 ine-e entities shal' be
made in accordance witn 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 Audits 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 audits. For those governments, the
cognizant agency shall permit biennial
audits, covering both years, if the govern-
ment so requests. It shall also honor re-
quests for biennial audits by governments
that have an administrative policy calling
for audits less frequent than annual, but
only for fiscal years 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 managing Federal assist-
ance programs in compliance with applica-
ble laws and regulations.
Part 31, App. A
a. Internal control review. In order to p;
vide this assurance the auditor must makt -
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 part 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 subrecipients and obtaining and
acting on subrecipient audit reports.
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 accounts all Federal funds received
and expended and the programs under
which they were received. This shall include
funds received directly from Federal agen-
cies and through other State and local gov-
ernments.
(2) The review must include the selection
and testing of a representative number of
charges from each major Federal assistan
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 its condi-
tions; prior experience with the program,
particularly as revealed in audits and other
evaluations (e.g., inspections program re-
views); the extent to which the program is
carried out through subrecipients; the
extent to which the program contracts for
goods or services; the level to which the pro-
gram is already subject to program reviews
or other forms of independent oversight:
the adequacy of the controls for ensuring
compliance; the expectation of adherence or
lack of adherence to the applicable laws and
regulations; and the potential impact of ad-
verse findings.
(a) In making the test of transactions, the
auditor shall determine whether.
—The amounts reported as expenditures
were for allowable services, and
—The records show that the; 3 who received
services or benefits were eligible to receive
them.
(b) In addition to transaction testing,
auditor shall determine whether:
—Matching requirements, levels of effort
and earmarking limitations were met,
—Federal financial reports and claims for
advanced and reimbursements contain in-
formation that is supported by the bookr
389
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Part 31, App. A
40 CFR Ch. I (7-1-88 Edition)
J 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-87, "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 Audits of State and
Local Governments, 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 programs.
(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. Subrecipients. State or local govern-
ments that receive Federal financial assist-
ant-sand provide $25,000 or more of it in a
fU year to a subrecipient shall:
a. Determine whether State or local subre-
cipients have met the audit requirements of
this Circular and whether subrecipients cov-
ered by Circular A-110. "Uniform require-
ments for grants to universities, hospitals,
and other nonprofit organizations," have
met that requirement;
b. Determine whether the subrecipient
spent Federal assistance funds provided in
accordance with applicable laws and regula-
tions. This may be accomplished by review-
ing an audit of the subrecipient made in ac-
cordance with this Circular, Circular A-110.
or through other means (e.g., program re-
views) if the subrecipient has not yet had
such an ai'dit;
c. Ensure that appropriate corrective
action is taken within six months after re-
ceipt of the audit report in instances of non-
compliance with Federal laws and regula-
tions;
d. Consider whether subrecipient audits
necessitate adjustment of the recipient's
own records; and
e. Require each subrecipient to permit in-
dependent auditors to have access to the
records and financial statements as neces-
sary to comply with this Circular.
/""*\ Relation to other audit requirements.
T; Single Audit Act provides that an audit
made in accordance with this Circular shall
be in lieu of any financial or financial com-
pliance audit required under individual Fed-
eral assistance programs. To the extent that
a single audit provides Federal agencies
with information and assurance they need
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
subrecipient 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-
gram evaluations.
11. Cognizant 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.
39O
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cnvironmen/ol Protection Agency
(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. niegai acts or irregularities. If the
auditor becomes aware of illegal acts or
other irregularities, prompt notice shall be
given to recipient mar..* nt officials
above the level of involvement. (See also
program 13(a)(3) 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.
Illegal acts and irregularities include such
matters as conflicts of interest, falsification
of records or reports, and misappropriations
of funds or other assets.
13. Audit Reports. 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-
ments 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 assitance 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
as a result of the evaluation.
(3) The auditor's report on compliance
containing:
Part 31, App. A
—A statement o.f positive assurance \vith 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 noncornpli-
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
:.i.gs 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 local 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 $100.000 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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fart 41, App. A
40 C?R Ch. I (7-1-38 Editio,
of findings that relate to the programs of a
single Federal agency will be the responsi-
bility of the recipient and that agency. Al-
ternate 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.
15. Audit workpapers and 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.
16. Audit Costs. The cost of aud('-s made in
accordance with the provisions of this ^.. -
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
single audit shall not exceed the percent-
>ge 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 cases 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
shall 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
^nter into intergovernmental agreements
r audit and other services, analysis should
<• 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
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 economicall
disadvantaged individuals shall have th
maximum practicable opportunity to par
ticipate in contracts awarded to fulfill th<
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 disadvantaged 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 a 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 disadvantaged 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. Regulations. 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,
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. Inquiries, 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 aitj 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:
Part 32
Tout expenditures of Federal
financial assistance tor all programs
More than
$100 million
$1 billion
$2 billion
S3 billion
$4 billion
$5 billion
$6 billion
Over $7 billion .
But less man
$1 billion . . ..
$2 billion
S3 billon
$4 billion
$5 billion
$6 billion .
$7 billion
Major Federal
assistance program
means any program
that exceeds
S3 million.
$4 million.
$7 million.
$10 million.
$13 million.
$16 million.
$19 million.
$20 million.
[51 FR 6353. Feb. 21. 1986. Redesignated at
53 FR 8076. Mar. 11. 1988]
EFFECTIVE DATE NOTE: At 53 FR 8076. Mar.
11. 1988. Appendix E to Part 30 was redesig-
nated as Appendix A to Part 31, effective
October 1.1988.
393
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PART 31 POLICY GUIDANCE
1. How does EPA 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 deal 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].)
2. Is every expenditure deemed to include the Federal share
(30.307(0))?
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 aai::itainir.g this postv,re 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 0) 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. How should EPA handle conditions for "high risk" grantees?
Award conditions based or. a ct:rtv>«, a policy consistent with
Part 31, or which are technical or programmatic in nature c.rc
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 terms 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 risk." 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-risk11 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 FSR 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).
foc^ !r-?».r.?>g'*rv?r»t. requires timely liquidation of all
obligations; buu 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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8. What is EPA's policy on the recipient's acceptance of the
award within 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" as 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. How shall EPA address the use of Force Account in grants under
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 allowability
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?
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 3:1.30, paragraphs (c) through (fj) require vrittsr.
approval.
-------
APPENDIX F
-------
APPENDIX F
LIST OF EPA ASSISTANCE PROGRAMS
(CFDA Number, Title, Statutory Authority,
GICS Program Code, and Delegation of
Authority Number)
-------
CFDA PROGRAM TITLE PROGRAM DELEGATION OF
NO. STATUTORY AUTHORITY CODE AUTHORITY NO.
66.001 Air Pollution Control Program Support A 7-1
Clean Air Act: Sees. 105; 106
66.003 Air Pollution Control Manpower Training T 7-35
Clean Air Act: Sec. 103(b)
66.006 Air Pollution Control— Technical Training T 7-35
Clean Air Act: Sec. 103
66.032 State Indoor Radon Program Kl 27-3
Toxic Substances Control Act: Sec. 306
(indoor Radon Abatement Act)
66.419 Water Pollution Control State and Interstate I 2-3
Interstate Program S.upport
Clean Water Act: Sec^ 106
66.432 State Public Water System Supervision F 9-11
Safe Drinking Water Act: Sec. 1443(a)
66.433 State Underground Water Source Protection (UIC) G 9-21
Safe Drinking Water Act: Sec. 1443(b)
66.435 Water Pollution Control— Lake Restoration CL 2-16
Cooperative Agreements
Clean Water Act: Sec. 314(b)
66.438 Construction Management Assistance C 2-74
Clean Water Act: Sec. 205(g)
-------
CFDA
NO.
PROGRAM TITLE
STATUTORY AUTHORITY
PROGRAM
CODE
DELEGATION OF
AUTHORITY NO.
66.454 Water Quality Management Planning C6
Clean Water Act: Sees. 205(j)(l) & (2)
66.456 National Estuary Program CE
Clean Water Act: Sec. 320(g) X
66.458 Capitalization Grants for State Revolving CS
Fund
Clean Water Act: Sees. 205(m), 601(a)
66.460 Nonpoint Source Implementation Grants C9
Clean Water Act: Sees. 205(j)(5); 319(h)
66.461 Wetlands Protection—State Development Grants CD
Clean Water Act: Sec. 104
66.463 National Pollutant Discharge Elimination CP
System Related State Program Grants
Clean Water Act: Sec. 104
66.465 Wellhead Protection Program Grants WH
Safe Drinking Water Act: Sec. 1428
66.466 Chesapeake Bay Program CB
Clean Water Act: Sec. 104(b)(3)
66.500 Environmental Protection—Consolidated Research R
(Combination of 2 or more Research authorities.)
66.501 Air Pollution Control Research R
Clean Air Act: Sees. 104; 617(b)
2-55
2-45
2-42
2-54
2-23
2-43
2-84
9-37
2-46
(identify delegs.
for all auths. used
in award)
7-61
-------
CFDA
NO.
PROGRAM TITLE
STATUTORY AUTHORITY
PROGRAM
CODE
DELEGATION OF
AUTHORITY NO.
66.502
66.504
66.505
66.506
66.507
66.508
66.600
Pesticides Control Research
Federal Insecticide, Fungicide, and
Rodenticide Act: Sec. 20(a)
Solid Waste Disposal Research
Solid Waste Disposal Act: Sec. 8001
Water Pollution Control—Research, Development,
Demonstration
Clean Water Act: Sees. 104; 105; 107; 113
Safe Drinking Water Research and Demonstration
Safe Drinking Water Act: Sees. 1442; 1444
Toxic Substances Research
Toxic Substances Control Act: Sec. 10
R
R
S
R
S
R
Senior Environmental Employment Program Q
Environmental Programs Assistance Act of 1984 QS
(NOTE: "Q" used when enrollee(s) assigned to EPA;
"QS" used when assigned to other Federal agency)
Environmental Protection Consolidated Grants— M
Program Support
Omnibus Territory Act: Title V
Toxic Substances Control Act: Sec. 28
Clean Air Act: Sec. 105
Solid Waste Disposal Act: Sees. 3011; 3012(c); 4008
Federal Insecticide, Fungicide, and Rodenticide Act: Sec. 23 (a)
Safe Drinking Water Act: Sees. 1443(a); 1443(b)
Clean Water Act: Sec. 106
5-23
(pending)
(pending)
(pending)
(pending)
1-67
(identify
delegs.
for all
auths.
used in
award)
-------
CFDA PROGRAM TITLE PROGRAM DELEGATION OF
NO. STATUTORY AUTHORITY CODE AUTHORITY NO.
66.604 Environmental Equity . EQ 1-86
Clean Water Act: Sec. 104(b)(3);
Safe Drinking Water Act: Sec. 1442(b)(3);
Solid Waste Disposal Act: Sec. 8001(a);
Clean Air Act: Sec. 103(b)(3);
Toxic Substances Control Act: Sec. 10(a);
Federal Insecticide, Fungicide, and Rodenticide Act: Sec. 20(a);
Comprehensive Environmental Response,
Compensation and Liability Act: Sec. lll(c) (10) ;
Marine Protection, Research and Sanctuaries Act: Sec. 203, and
National Environmental Education Act: Sec. 6
66.700 Consolidated Pesticide Compliance Monitoring E 5-27
and Program Cooperative Agreements
Federal Insecticide, Fungicide, and Rodenticide Act: Sec. 23(a)
66.701 Toxic Substances Compliance Monitoring Program K 12-9
Toxic Substances Control Act: Sec. 28
66.707 State Lead Program Grants PB (pending)
Toxic Substances Control Act: Sec. 404(g)
66.801 Hazardous Waste Management—State Program D 8-13
Support •
• • Solid Waste Disposal Act: Sec. 3011
66.802 Hazardous Substance Response Trust Fund V 14-1-B
Comprehensive Environmental Response, 14-4-A
Compensation, and Liability Act: Sec. 104(d) 14-4-C
66.804 State Underground Storage Tanks Program L 8-14
Solid Waste Disposal Act: Sec.2007(f)(2)
-------
CFDA PROGRAM TITLE PROGRAM DELEGATION OF
NO. STATUTORY AUTHORITY CODE AUTHORITY NO.
66.805 Undergound Storage Tank Trust Fund Program L 8-38
Solid Waste Disposal Act: Sec.2007(f)(2)
66.806 Superfund Technical Assistance Grants for 1 14-24
Citizen Groups at Priority Sites
Comprehensive Environmental Response,
Compensation, and Liability Act: Sec.117(e)
66.807 Superfund Innovative Technology Evaluation S 14-18-A
Program
Comprehensive Environmental Response,
Compensation, and Liability Act: Sec. 311
66.808 Solid Waste Management Assistance XI 8-42
Solid Waste Disposal Act: Sec. 8001
66.809 Core Program Cooperative Agreements VC 14-4-C
Comprehensive Environmental Response, 14-4-A
Compensation, and Liability Act: Sec. 104
66.810 Emergency Planning & Community Right to Know X 12-25
Toxic Substances Control Act: Sees. 10 & 28 12-26
66.900 Pollution Prevention Grants Program NP 28-1
Pollution Prevention Act of 1990: Sec. 6605
Solid Waste Disposal Act: Sec. 8001
Clean Water Act: Sec. 104
Safe Drinking Water Act: Sec. 1442
Toxic Substances Control Act: Sec. 10
Clean Air Act: Sec. 103
-------
CFDA PROGRAM TITLE PROGRAM DELEGATION OF
NO. STATUTORY AUTHORITY CODE AUTHORITY NO.
66.925 State/EPA Data Management Financial Assistance X2 1-61
Program
Federal Insecticide, Fungicide, and Rodenticide Act: Sec. 20
Solid Waste Disposal Act: Sec. 8001
Clean Water Act: Sec. 104
Safe Drinking Water Act: Sec. 1442
Comprehensive Environmental Response, Compensation,
and Liability Act: Sec. 311
Toxic Substances Control Act: Sec. 10
Clean Air Act: Sec. 103
66.926 Indian Environmental General Assistance Program GA 1-71
Indian Environmental General Assistance Program Act
of 1992: Sec. 11
66.950 Environmental Education and Training Program NT 1-74
National Environmental Education Act: Sec. 5
66.951 Environmental Education Grants NE 1-74
National Environmental Education Act: Sec. 6
66.CAF Air Pollution Control Fellowships U 7-36
Clean Air Act: Sec. 103(b)(5)
66.CWF Water Pollution Control Fellowships U 2-40
Clean Water Act: Sec. 104(g)(3)(B)
66.CWT Water Pollution Control Professional Training T 2-39
Clean Water Act: Sec. 104(g)(3)(A) & (c)
-------
CFDA PROGRAM TITLE PROGRAM DELEGATION OF
NO. STATUTORY AUTHORITY CODE AUTHORITY NO.
66.CWT Water Pollution Control Technical Training T 2-41
Clean Water Act: Sees. 109; 110
66.DWF Drinking Water Fellowships U 9-10
Safe Drinking Water Act: Sec. 1442(b)(3)
66.DWT Drinking Water Training T 9-15
Safe Drinking Water Act: Sees. 1442 (b) (3) (A)
and 1442 (d)(1)
66.INT Interdisciplinary Training T (identify
Clean Air Act: Sec. 103 delegs.
Clean Water Act: Sec. 104 for all
Safe Drinking Water Act: Sec. 1442 training
Solid Waste Disposal Act: Sec. 8001 auths.
used in
award)
66.MIA Minority Institution Assistance Program (MIAP) U (identify
Fellowship delegs.
Clean Air Act: Sec. 103 for all
Clean Water Act: Sec. 104 auths.
Safe Drinking Water Act: Sec. 1442 used in
Solid Waste Disposal Act: Sec. 8001 award)
66.NMS National Network for Environmental Management U r-75
(NNEMS) Fellowship
Clean Air Act: Sec. 103
Clean Water Act: Sec. 104
Safe Drinking Water Act: Sec. 1442
Solid Waste Disposal Act: Sec. 8001
-------
CFDA
NO.
PROGRAM TITLE
STATUTORY AUTHORITY
PROGRAM
CODE
DELEGATION OF
AUTHORITY NO.
66.RTX Radon Training
Toxic Substances Control Act: Sec. 308
66.SFT Superfund Training
Comprehensive Environmental Response,
Compensation, and Liability Act: Sec. 311(b)
66.SPX Environmental Protection Consolidated Grants—
(Combination of 2 or more statutory
authorities delegated to Headquarters AAs)
66.SRF Superfund Research (includes "Centers")
Comprehensive Environmental Response,
Compensation, and Liability Act: Sec.311
66.SSI Investigations, Surveys or Studies con-
sidered neither Research, Demonstration
nor Training
Clean Water Act: Sec. 104(b)(3)
Clean Water Act: Sec. 105; 107; 113
Clean Air Act: Sec. 617(b)
66.SWF Solid Waste Fellowship
Solid Waste Disposal Act: Sec. 8001
66.SWT Solid Waste Training
Solid Waste Disposal Act: Sec. 7007
U
27-1
14-18-A
(identify
delegs.
for all
auths.
used in
award)
14-18-B
(identify
delegs.
for all
auths.
used in
award)
8-17
8
-------
CFDA
NO.
PROGRAM TITLE
STATUTORY AUTHORITY
PROGRAM
CODE
DELEGATION OF
AUTHORITY NO.
66.TSD Toxic Substances Control Act Development
Toxic Substances Control Act: Sec. 10
OPPT — 12-22
(ORD — pending)
-------
APPENDIX G
-------
APPENDIX G
GUIDE: "DELEGATIONS OF AUTHORITY
WHAT MANAGERS NEED TO KNOW"
-------
?/EPA
United States
Environmental Protection
Agency
Administration
and Resources
Management
EPA 202-F-94-002
February 1994
Delegations of
Authority —
What Managers Need
to Know
Office of Administration
Management and Organization Division
INSIDE
Background —
Delegated Authority ... 1
Delegated Authority vs.
General Authority . . . . 1
Delegation Floors 2
Common Management
Concerns 2
Delegation Principles &
Philosophies 3
Types of LimitatiOR$,~>- . . 4
Green Border
Review Process 4
Conclusion
This Guide is designed to give you an
overview of EPA'si delegations of
authority and to discuss your
responsibility jn managing "delegated
programs. -A delegation of authority is
defined as the Administrator's charge to
senior Headquarters and Regional
managers to carry out statutory and
regulatory responsibilities on her behalf.
I. Background—
Delegated Authority
There are 555+ delegations in the
Agency's Delegations Manual.
Delegations are important for two
reasons. First, they are a legal record—
documenting which Agency officials
have authority to make decisions for the
Administrator. Second, delegations are
a management tool that establishes
operating conditions among
organizations and individuals as they
carry out authorities.
Figure 1 shows the distribution of 555+
delegations throughout the Agency.
Approximately 40% are held in
Headquarters, 29% in the Regions and
31% shared by Headquarters and the
Regions. Figure 1 also shows that EPA
is a fairly decentralized Agency, with
60% of its delegations going either solely
or on a shared basis to the Regions.
EPA's delegations tend to fall into one of
several categories, such as enforcement
actions, administrative decisions, state
environmental agreements/approvals,
Distribution of EPA's Delegations
Headquarters
224 - (40%)
Shared
Headquarters
& Regions
172-(31%)
FIGURE 1
Based on data as ot 3/10/93
ce rt if icat ion/permits/registration
decisions, and awarding grants and
cooperative agreements. Figure 2
shows that the largest number of
delegations result from the Clean Water
Act and the Clean Air Act.
II. Delegated Authority vs.
General Authority
It's important to note that a delegation
of authority is not needed for all work
that is performed by an office. Delegated
authority generally refers to
decision-making that flows directly from
legislation or regulation. General
authority stems from activities that an
office does as a result of its functions
and can be found in functional ar
mission statements, operating guidance,
and strategic plans.
Recycled/Recyclable
Printed with Soy/Canola Ink on paoer :hat
contains al least 50% recycled fiber
-------
Delegations Sorted By Act
(Total Delegations = 555)
CM J
CEIPCL/i [
Based on data as of 3/10/93
i
0 10 20 30 40 50 60 70 80 90 100
1Other Acts: Includes delegations from acts with fewer than 15 delegations.
Acts included are: PPA, EPCRA, IRAA, MPRSA, NCA, & OAPCA.
2Multi-Act: Delegations use multiple statutory authorities and cannot be
attributed to any one specific act.
3Non-Statutory: Includes delegations that are not based on legislation (i.e.,
General/Administrative delegations based on management decision-making
protocol, Executive Orders, Federal Register Notices, etc.).
FIGURE 2
To put it simply, a general authority is an activity that an office
performs—such.as the analysis and work that is involved in
reviewing a permit. A delegated authority is an accountable
decision-making responsibility—such as approving or
denying a permit.
III. Delegation Floors
An action can be redelegated to various levels in an
organization, such as the Division Director or Branch
Chief level. A delegation floor is the lowest level in an
organization to which an action can be redelegated. This floor
is written into the delegation as a specific authorized level.
Delegatees may choose to have actions actually carried out
at a level above the authorized floor, but not below it.
As of March, I993, the majority of delegations are authorized
to be redelegated to the Division Director level (43%),
followed by 25% with no floor identified, and 15% that cannot
be redelegated. (In light of the Inspector General's concern
•"'bout delegation floors, the Agency now identifies a floor on
Jl delegations as they are written or revised.) Figure 3
indicates that Division Directors are the critical action and
decision-making level for the majority of delegated Agency
authorities.
IV. Common Management Concerns
As managers, delegated authorities are an
important part of the way you manage your
organization and your programs. In addition to the
technical and programmatic issues inherent in a
delegation, you also need to be aware of some
common management concerns.
(1) There Is considerable disagreement about
how to determine the lowest appropriate level for
redelegatlon In a highly decentralized
decision-making management structure.
— In EPA a significant amount of discretion and
autonomy is held in the Regional offices. It is
crucial to decide how much authority you wish to
delegate to the Regions.
— The level of delegation sometimes receives
Congressional interest. In general, Congress
prefers to keep decisions and accountability at
high levels in the Agency to ensure effective
oversight.
— In contrast, recent AA/RA Forums, the National
Performance Review, and individual Regions
have raised issues suggesting a need for
additional employee empowerment and
autonomy in making decisions under delegated
authority.
These tensions are symptomatic of the pull and
tug in a centralized vs. decentralized
management structure and are important for you
to keep in mind as you make your delegation
decisions.
Delegations Sorted By Floor'
[Tola! Delegations c-S5t
Cannot Be " ' ; • >
Rodolcgatcd '"••:— -—'
Division Director
icli Chief
or Below
..•__•._.-._:_...'-_ — f Based on data as of 3 '10/93
1 ^' '--^ 1"0 ?QO ?50
1Floor= Lowest level to which a delegation can be redelegated, e.g.,
Branch Chief, Division Director.
2Other= Includes delegations with floors identified as On-Site
Coordinators, National Program Managers, Senior Budget Officers,
or Human Resources Officers.
FIGURES
-------
DELEGATION PRINCIPLES & PHILOSOPHIES
EPA's delegation system is based on five core principles and philosophies:
(1) Act for the Administrator — Generally the Administrator only
delegates to one or more senior officials reporting directly to her to
act on her behalf. This means the AA/RAs, General Counsel, and
Associate Administrators.
(2) Right to Exercise or Withdraw — The Administrator and other
delegatees always retain the right to exercise or withdraw a
delegated authority at any time.
(3) Allocate Authority — Delegations allocate authority between
the Regions and Headquarters, as well as among Headquarters
Offices. As a way of deciding who should hold what authority, issues
mainly affecting Regional or field offices are delegated to Regional
Administrators, and issues that are multi-regional or of national
significance generally remain with the Administrator or are
delegated to senior officials at Headquarters.
(4) Authority at Lowest Level —When deciding to delegate
authorities, consider the following:
— Review enabling legislation—sometimes it dictates the level of
decision-making authority.
— Delegate an action to the lowest level that is appropriate for
efficiency and effectiveness.
— Decide whether or not to redelegate authority to lower levels
based on areas of responsibility, the staff's technical expertise,
and political judgment, then delegate as close as possible to
where the action takes place.
— Determine if an action has a high degree of importance and
visibility and, if so, retain authority at an appropriate level
capable of performing the task and making the appropriate
technical, political and policy judgments.
— Determine whether full or partial authorization is needed based
on the above criteria; decide who should exercise what parts of
the authority; and what should not be delegated.
(5) Delegatees Are Accountable — Regardless of the level to
which an action is redelegated, you remain accountable for all
decisions or actions taken by your redelegatees in exercising the
authority. In the following chain of accountability, it is very important
for you to understand the level at which delegated authorities are
or should be exercised.
(2) Determining the appropriate level to carry out an
authority is closely aligned with the notion of what
restrictions or limitations should be placed upon
officials as they carry out authorities. While limitations
are used most frequently with enforcement delegations,
the majority of EPA's delegations (approximately 64%)
have no restrictions limiting how officials exercise the
delegated authority (see Figure 4).
— Historically the Agency's Administrators, the recipients
of delegations, and the Management and Organization
Division (M&O) have strongly discouraged limitations
because they undermine the accountability and
effectiveness that a delegation is intended to provide.
Limitations result in "phantom" delegations, meaning that
the delegatee only appears to have the authority, but in
reality it is held by the office or person who must
ultimately approve the action.
Although delegatees want to receive authorities as
unencumbered as possible, National Program Managers
often want to maintain control or ensure national
consistency by placing limitations in delegations.
— Limitations, when necessary, establish operating
procedures between programs that must share
delegated authority.
— EPA officials who have been given a delegated authority
can only carry it out within the stated parameters of the
limitations included in the delegation.
(3) Timing is an important issue In managing your
delegations and programs. Delegation actions
submitted at the last minute force an expedited review
(or no review at all), limit input by essential parties
affected by the delegation, and create the potential for
vulnerability when the delegation Is exercised.
For example, regulations and permits are sometimes
approved and ready to be carried out before an office
realizes they do not have appropriate delegated authority
to approve the action.
Delegations Sorted By Limitations
(Total Delegations = 555)
No Limitations
Notify
Consult
Concur
!355.
42
93
65
Bated on dau u ol 3/10,93
50 100 ISO 200 250 300 350 400
1No specific restrictions on officials in exercising the delegated
authority.
2Requires informing other official(s) named when exercising the
authority.
3Requires discussing action with other official(s) named before
exercising the authority.
4Requires approval from other official(s) named before exercising the
authority.
FIGURE 4
-------
Delegations with limitations are separated
into three types:
J Notify requires the delegatee to inform another
off icial(s) when exercising the authority. Notify is used
in 21% of the delegations with limitations;
D Consult requires that an action official discuss the
action with another official(s) before exercising the
authority. Consult is used in 46% of the delegations
with limitations;
D Concur is the most rigid of all limitations, is used in
33% of the delegations with limitations, and requires
the delegatee to obtain the approval of another
official(s) before exercising the authority.
(4) A delegation of authority should be considered an
initial management step, not a final one. As a manager,
you must also control delegations after they are
redelegated. Several methods can be used:
— Consider crafting delegations to stipulate dollar levels or
types of actions as a way of control rather than delegating
broad authority or imposing unnecessary limitations. An
example are dollar limits used with some grant or
cooperative agreement delegations.
Build a management infrastructure for your program
using a mix of applicable program guidance, plans,
evaluations, technical assistance, information sharing
systems, and other mechanisms. Don't rely solely on
delegations of authority for program management
directions.
— Systematically review your delegations on a regular
basis to make sure they are compatible with program
objectives. Periodic program evaluations and
conferences can help the National Program Manager
assure that the entire program, including the exercise of
delegated authority, is solid and consistent.
— Revise delegations as understanding and experience
with the authority grows in the organization.
— Show confidence in the redelegation decisions you
make. Once decisions are redelegated, it is important to
demonstrate trust, integrity, and consistency toward
redelegatees and the actions they take under the
redelegations.
— Exercise a delegated authority yourself when it is
appropriate for policy or political reasons to do so; and
withdraw an authority if it is being improperly carried out.
Before deciding to exercise or withdraw a delegation,
explore alternatives and discuss your concerns with the
redelegatee. Withdrawing a delegated authority should
be used as a last resort after other alternatives are
exhausted.
V. The Green Border Review Process
Before the Administrator approves a delegation of
authority, it is circulated through the Agency's "Green
Border" review process. This review process is the
mechanism for the Administrator to receive the advice and
counsel of her senior managers and to be sure that all legal
oroperational issues have been raised before she makes her
decision. Green Border is also an Agencywide
consensus-building process, and is managed by the
Management and Organization Division (M&O) in the Office
of Administration and Resources Management. Your staff
has more detailed information about the Green Border review
process.
VI. Conclusion
D
elegations of authority are management tools that:
(1) Ease the burden of obligations for which the Administrator
is responsible by giving authority to senior managers to carry
out actions on her behalf. By delegating these
responsibilities to EPA senior officials, the Administrator has
more time to address other pressing issues affecting the
Agency; and
(2) Provide a legal record of Agency officials who carry out
authority on behalf of the Administrator. This becomes very
important when EPA actions are challenged in court.
If you are interested in learning about specific delegations in
your program, please consult the M&O Management Analyst
for your organization ((202) 260-5000) who will be happy to
assist you.
How EPA Gens i t
Oe legatee! Author
-------
APPENDIX H
-------
APPENDIX H
40 CFR PART 40, "RESEARCH AND
DEMONSTRATION GRANTS"
40 CFR PART 45, "TRAINING ASSISTANCE
40 CFR 46, "FELLOWSHIPS"
40 CFR PART 47, "ENVIRONMENTAL
EDUCATION GRANTS"
-------
United States
Environmental Protection
Agencv
Grants Administration
Division (PM-216)
Washington, DC 20460
EPA GAD/10-80-1
Jun» 19SO
v>EPA
Interim Regulations
and Procedures
Applicable to
Research
and
Demonstration
Grants
-------
Reprinted from Code-of Federal Regulations, Title 40, Part 40, revised as
of July 1, 1979
First Printing June 1980
-------
Table of Sections
PART 40—RESEARCH AND
DEMONSTRATION GRANTS
Sec.
40.100 Purpose of regulation.
40.105 Applicability and scope.
40.110 Authority.
40.115 Definitions.
40.115-1 Construction.
40.115-2 Intermunlcipal agency.
40.115-3 Interstate agency.
40.115-4 Muncipallity.
40.115-5 Person.
40.115-8 State.
40.120 Publication of EPA research objec-
tives.
40.125 Grant limitations.
40.125-1 Limitations on duration.
40.125-2 Limitations on assistance.
40.130 Eligibility.
40.135 Application.
40.135-1 Preappllcatlon coordination.
40.135-2 Application requirements.
40.140 Criteria for award.
40.140-1 All applications.
40.140-2 [Reserved]
40.140-3 Federal Water Pollution Control
Act.
40.145 Supplemental grant conditions.
40.145-1 Resource Conservation and Re-
covery Act.
40.145-2 Federal Water Pollution Control
Act.
40.145-3 Projects Involving construction.
40.150 Evaluation of applications.
40.155 Availability of information.
40.160 Reports.
40.180-1 Progress reports.
10.160-2 Financial status report.
40.180-3 Reporting of Inventions.
40.180-4 Equipment report.
40.180-5 Final report.
40.185 Continuation grant*.
AOTROKITT: Authorities cited In I 40.110.
Sooner 38 PR 12784. May 15. 1973, unle»
otherwise noted.
-------
§40.115-1
{40.100 Purpose of regulation.
These provisions establish and
codify policies and procedures govern-
ing the award of research and demon-
stration grants by the Environmental
Protection Agency.
} 40.105 Applicability and trope.
This part establishes mandatory
policies and procedures for all EPA re-
search and demonstration grants. The
provisions of this part supplement the
EPA general grant regulations and
procedures (40 CFR Part 30), Accord-
ingly, all EPA research and demon-
stration grants are awarded subject to
the EPA Interim general grant regula-
tions and procedures (40 CFR Part 30)
and to the applicable provisions of this
Part 40.
$40.110 Authority.
EPA research and demonstration
grants are authorized under the fol-
lowing statutes:
(a) The Clean Air Act. as amended,
42 U.S.C. 1857 et seq.
(1) Section 103 (42 U.S.C. 1857b) au-
thorizes grants for research and dem-
onstration projects relating to the
causes, effects, extent, prevention, and
control of air pollution.
(2) Section 104 (42 U.S.C. 1857b-l)
authorizes grants for research and de-
velopment of new and improved meth-
ods 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(b)>
authorizes grants for research and
demonstration projects relating to the
causes, effects, extent, prevention, re-
duction, and elimination of water pol-
lution.
(2) Section 104(h) (33 U.S.C.
1254(h)) authorizes grants for re-
search and development of new and
improved methods for the prevention.
removal, reduction, and elimination of
pollution in lakes, including the unde-
sirable effects of nutrients and vegeta-
tion, and for construction of publicly
owned research facilities for such pur-
pose.
(3) Section 104(1) (33 U.S.C. 1254(1))
authorizes grants for research, studies.
experiments, and demonstrations rela-
tive to the removal of oil from any
waters and for the prevention, control.
and elimination of oil and hazardous
substances pollution.
(4) Section 104(r) (33 U.S.C. 1254(D)
authorized grants for the conduct of
basic research into the structure and
function of freshwater aquatic ecosys-
tems, and to improve understanding of
the ecological characteristics neces-
sary to the maintenance of the chemi-
cal, physical and biological integrity
of freshwater aquatic ecosystems.
(5) Section 104(s) (33 U.S.C. (s)) au-
thorizes grants 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 effects of development within
river basins on river systems and on
the value of water resources and
water-related activities.
(6) Section 105(a) (33 U.S.C. 1255(a))
authorizes grants 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.
(7) Section lC5(b) (33 U.S.C. 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, including
nonpolnt sources, together with in-
stream water quality improvement
techniques.
(8) Section 105(C) (33 U.S.C. 1255(O)
authorizes grants for research and
demonstration projects for prevention
of pollution of any waters by Industry
Including, but not limited to. the pre-
vention, reduction, and elimination of
the discharge of pollutants.
(9) Section 10S(e)(l) (33 U.S.C.
1255(eXD) authorizes grants for re-
search and demonstration projects
with respect to new and improved
methods of preventing, reducing, and
eliminating pollution from agriculture.
(10) Section 105(e)(2) (33 U.S.C.
1253(eK2)) authorizes grants for dem-
onstration projects with respect to
new and Improved methods of prevent-
ing, reducing, storing, collecting, treat-
Ing, or otherwise eliminating pollution
from sewage in rural and other areas
where collection of sewage in conven-
tional, communitywide sewage collec-
tion systems Is impractical, unecono-
mical, or otherwise infeaaible. or
where soil conditions or other factors
preclude the use of septic tank and
drainage field systems.
(11) Section 107 (33 U.S.C. 1297) au-
thorizes grants for projects to demon-
strate comprehensive approaches to
the elimination or control of acid or
other mine water pollution resulting
from active or abandoned mining oper-
ations and other environmental pollu-
tion affecting water quality within all
or part of a watershed or river basin.
including siltatlon from surface
mining.
(12) Section 108 (33 U.S.C. 1258) au-
thorizes grants for projects to demon-
strate new methods and techniques,
and to develop preliminary plans for
the elimination or control of pollution
within all or any part of the water-
sheds of the Great Lakes.
(13) Section 113 (33 U.S.C. 1263) au-
thorizes grants for projects 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.
(c) The Public Health Service Act. as
amended. 42 U.S.C. 241 et seq.
(1) Section 301 (42 U.S.C. 241. 242b,
and 246) authorises grants for re-
search relating to the human and en-
vironmental effects of radiation.
(d) The Solid Waste Disposal Act, as
amended, by the Resource Conserva-
tion and Recovery Act of 1978 (42
U.S.C. 6901 etseq.).
(1) Section 8001 (42 U.S.C. 6981) au-
thorizes grants for research and dem-
onstration projects relating to solid
waste.
(2) Section 8004 (42 U.S.C. 6984) au-
thorizes brants for demonstration of
new or Improved technologies for re-
source recovery.
(3) Section 8006 (42 U.S.C. 6985) au-
thorize* grants to conduct special
studies and demonstration projects on
recovery of useful energy and materi-
als.
(4) Section 8006 (42 U.S.C. 6986) au-
thorizes grants for the demonstration
of resource recovery system or for the
construction of new or improved solid
waste disposal facilities.
(e) The Federal Insecticide. Fungi-
cide, and Rodenticide Act. as amended.
Pub. L. 92-516.
(1) Section 20 authorizes grants for
research in the pesticides areas with
priority given to the development of
biologically integrated alternatives for
pest control.
(f) The Grant Act. 42 U.S.C. 1891 et
seq.. authorizes grants for basic scien-
tific research.
[38 PR 12784. May IS. 1973. a* amended at
42 FR 38056. Oct. 20. 1977]
{40.115 Definitions.
The statutes Identified in {40.110
contain definitions which are not all
repeated here. The following terms
shall have the meaning set forth
below:
C42 FR 38036. Oct. 20. 19771
9 40.115-1 Coiutructlon.
May Include the preliminary plan-
ning to determine the economic and
engineering feasibility of a facility, the
engineering, architectural, legal, fiscal.
and economic Investigations and stud-
lea, surveys, designs, plans, working
drawings, specifications, procedures.
and other action necessary to the con-
struction of a facility, the erection, ac-
-------
§40.130
quisition. alteration, remodeling, im-
provement, or extension of a facility.
and the inspection and supervision of
the construction of a facility.
§ 40.115-2 Intermunieipal agency.
(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 pertaining to the pre-
vention and control of air pollution.
(b) 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.
(c) In all other cases, an agency of
two or more municipalities having sub-
stantial powers or duties pertaining to
the control of pollution.
[38 FR 12784. May IS. 1973. u amended at
42 FR 56056, Oct. 20. 1977)
§40.115-3 Interstate agency.
(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
more States established by or pursu-
ant to an agreement or compact ap-
proved by the Congress or any other
agency of two or more States, having
substantial powers or duties pertain-
ing to the control of pollution of
waters.
(c) Under the Resource Conservation
and Recovery Act, an agency of two or
more municipalities in different States
or an agerfcy established by two or
more States, with authority to provide
for the disposal of solid wastes and
serving two or more municipalities lo-
cated in different States.
(d) In all other cases, an agency of
two or more States having substantial
powers or duties pertaining to the con-
trol of pollution.
(38 FR 12784. May 15. 1973. as amended at
42 FR S6056. Oct. 20, 1977]
§40.115-4 Municipality.
(a) Under the Federal Water Pollu-
tion Control Act. a city, town, bor-
ough, county, parish, district, associ-
ation, or other public body created by
or pursuant to State law. or an Indian
tribe or an authorized Indian tribal or-
ganization, with jurisdiction over dis-
posal of sewage, industrial wastes, or
other wastes: or a designated and ap-
proved management agency under sec-
tion 208 of the act.
(b) Under the Resource Conserva-
tion and Recovery Act, a city, town,
borough. Bounty, parish, district, or
other public body created by or pursu-
ant to State law, with
for the planning or administration of
solid waste management, or an Indian
tribe or authorized tribal organization
or Alaska Native village or organiza-
tion, and any rural community or un-
incorporated town or village or any
other public entity for which an appli-
cation for assistance is made by a
State or political subdivision thereof.
(c) 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.
[38 FR 12784. May 15. 1973. as amended at
42 FR 56056. Oct. 20. 1977]
§40.115-5 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.
[38 FR 12784. May 15. 1973. as amended at
42 FR 56057, Oct. 20. 1977]
§40.115-« State.
(a) Under the Federal Water Pollu-
tion Control Act. a State, the District
of Columbia, the Commonwealth of
Puerto Rico, the Virgin Islands.
Guam, American Samoa, 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 cases, a State, the
District of Columbia, the Common-
wealth of Puerto Rico, the Virgin Is-
lands, Guam and American Samoa.
[42 FR 56057. Oct. 20, 1977]
§ 40.120 Publication of EPA research ob-
jective*.
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-874. or
the Grants Administration Division,
PM-216, U.S. Environmental Protec-
tion Agency. Washington. D.C. 20480.
[42 FR 56087. Oct. 20. 19173
§ 40.125 Grant limitations.
§40.125-1 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 5 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.
[42 FR 56057. Oct. 20. 1977]
§ 40.125-2 Limitations on assistance.
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 in
any fiscal year may exceed $1 million.
(2) Sections 105(a), 105(c) and 108—
no grant may exceed 75 percent of the
allowable actual project costs.
(b) Clean Air Act. (1) Section 104—no
grant may exceed $1.500,000.
(c) Resource Conservation and Re-
covery Act
(1) Sections 8001. 8004. and 800,r
The maximum practicable cost shai
ing is required.
(2) Section 8006. The Federal share
for any grant for the demonstration of
resource recovery systems shall not
exceed 75 percent and Is subject to the
conditions contained In section 8006(b)
of the Act. The Federal share for any
grant for the construction of new or
Improved solid waste disposal facilities
shall not exceed 50 percent In the case
of a project serving an area which in-
cludes only one municipality and 75
percent in any other case, and is sub-
ject to the limitations contained in
section 8006(c) of the Act. Not more
than 15 percent of the total funds au-
thorized to be appropriated for any
fiscal year to carry out this section
shall be awarded for projects in any
one State.
(38 FR 12784. May 19. 1973. as amended at
42 FR 20083. May 8. 1975: 42 FR 56057. Oct.
20. 1977]
§40.130 Eligibility.
Except as otherwise provided below,
grants for research and demonstration
projects may be awarded to any re-
sponsible applicant In accordance with
40 CFR 30.340:
(a) The Clean Air Act, as amended—
public or nonprofit private agencies,
institutions, organizations, and to Lnd
vlduals.
(b) Resource Conservation and Re-
covery Act.
(1) Section 8001. puolic authorities.
-------
§40.140-3
agencies, and Institutions; private
Ancles and institutions; and individ-
j.
(2) Section 8004 and 8005. public
agencies and authorities or private
persons.
(3) Section 8008. State, muni- ipal.
intersate or intermunicipal agencies.
(4) No grant may be made under this
Act to any private profit-malting orgv
nizatlon.
(c) The Federal Insecticide. Fungi-
cide, and Rodenticide 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(b)—State water pol-
lution control agencies, interstate
agencies, other public or nonprofit pri-
vate agencies, institutions, organiza-
tions, and to individuals.
(2) Sections 104(h) and 104(1)—
public or private agencies and organi-
zations and to individuals.
(3) Section 104(r>—colleges and uni-
versities.
(4) Section 104(s)—institutions of
higher education.
(5) Sections lOS(a), 105(e)(2). and
107—State, municipal. Interstate, and
Intermunicipal agencies.
(6) Section 195(b>—State or States or
Interstate agency.
(7) Sections 105(c) and lOS(eXl)—
.rsons.
(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.
[38 FR 12784. May 15. 1973, as amended at
40 FR 20083. May 8. 1975; 42 FR 56057. Oct.
20. 1977]
5 40.135 Application.
§ 40.135-1 Preapplication coordination.
(a) All applicants. (1) Applicants for
research and demonstration grants are
encouraged to contact EPA for further
information and assistance 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 CFR. Part 8.
(b) Demonstration grants. All appli-
-mnts for demonstration grants must
omply with all applicable require-
ments of Office of Management and
Budget (OMB) Circular No. A-9S as
revised, see i 30.309 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 FR 12784. May 15. 1973, as amended at
41 FR 20659. May 20. 1976; 42 FR 56057.
Oct. 20. 19771
{ 40.135-2 \pplication requirement*.
All applications for research and
demonstration grants shall be submit-
ted in an original and 8 copies to the
Environmental Protection Agency.
Grants Administration Division,
Washington. D.C. 20480, In accordance
with li 30.315 through 30.315-3.
(a) Applications involving human
subjects. (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 DHEW
under these guidelines will be consid-
ered as being in compliance with this
requirement. These guidelines are pro-
vided in DHEW Publication No. (NIH)
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. S. Government
Printing Office, Washington, D.C.
20420.
(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-
fication must be renewed annually on
the basis of continuing review of the
supported project.
(b) Applications 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.
(c) Notice of research project (NRP).
Each application for research must in-
clude a summary (NRP) of proposed
work (200 words or less) incorporating
objectives, approach and current plans
and/or progress. Upon approval of an
application, summaries are forwarded
to the Smithsonian Science Informa-
tion Exchange. Summaries of work in
progress are exchanged with govern-
ment and private agencies supporting
research and are forwarded to investi-
gators who request such information.
(d) Federal Water Pollution Control
Act. (I) All applications for grants
under section 105(a) must have been
approved by the appropriate State
water pollution control agency or
agencies.
(2) All applications for grants under
section 107, where the proposed proj-
ect will be located 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.
(38 FR 12784. May 15. 1973. as amended at
40 FR 20083. May 8. 1975: 42 FR S6057. Oct.
20. 1977]
§40.140 Criteria for 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:
9 40.140-1 All application*.
(a) The relevancy of the proposed
project to the objectives of the EPA
research and demonstration program;
(b) The availability of funds within
EPA:
(c) The technical 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 costs of the project;
(f) The competency of the appli-
cant's staff and the adequacy of the
applicant's facilities and available re-
sources;
(g) The degree to which the project
can be expected to produce results
that will have general application to
pollution control problems nationwide:
(h) Whether the project is consist-
ent with existing plans or ongoing
planning for the project area at the
State, regional, and local levels;
(i) The existence and extent of local
public support for the project;
(j) Whether the proposed project is
environmentally sound;
(k) Proposed cost sharing.
{40.140-2 [RcMTTcd]
{40.140-3 Federal Water Pollution Con.
trel Act
(a) All applications for grants under
section 105(c) 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 tey Industry,
which method shall have industrywide
application;
-------
§40.150
(b) All applications for grants under
section 113 must include provisions for
community safe water supply systems,
toilets, 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 vil-
lages in the State of Alaska.
§ 40.145 Supplemental grant condition*.
In addition to the EPA general grant
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 grants 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 in-
crease in the amount of the grant or
payments thereunder, but shall not
preclude submission or consideration
of a request for a grant amendment
pursuant to 40 CFR 30.900-1.
[38 FR 12784. May 15. 1973. a* unended tt
40 FR 20083. Mfcy 6. 1975]
J 40.145-1 Resource Conservation and Re-
covery Act.
Programs for which a Federal grant
is awarded by the Environmental Pro-
tection Agency to a State, municipal,
interstate or Intel-municipal 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 Part 249 of this chapter.
[42 FR 58057. Oct. 20. 1977]
$40.14,1-2 Federal Water Pollution Con-
trol Act.
(a) No person in the United States
shall on the ground of sex be excluded
from participation In. be denied the
benefits of, or be subjected to discrimi-
nation under any program or activity
receiving assistance under the Act.
(b) Grants under section 107 are
awarded subject to the conditions—(1)
that the State shall acquire any land
or interests therein necessary for such
project to assure the elimination or
control of acid or other mine water
pollution; and (2) that the State shall
provide legal and practical protection
to the project area to insure against
any activities which will cause future
acid or other mine water pollution.
$ 40.145-3 Project* involving construction.
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
that he has or will have a fee simple
or such other estate or interest in the
site of the project, and rights of
access, as the grants officer finds suffi-
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 case of
projects serving more than one mu-
nicipality, that the participating com-
munities have su?h 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 bs 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.
(d) 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 subagreements are subject to
prior approval by the grants officer.
(e) Construction work will be per-
formed by the fixed-price (lump sum)
or fixed-rate (unit price) method, or a
combination of these two methods,
unless the grants officer gives advance
written approval to use some other
method of contracting. The cost-plus-
a-percentage-of-cost method of con-
tracting shall not be used. Adequate
methods of advertising for and obtain-
ing competitive sealed bids will be em-
ployed prior to award of the construc-
tion contract. The award of the con-
tract will be made to the responsible
bidder submitting the lowest respon-
sive bid. which shall be determined
without regard to State or local law
whereby preference is given on factors
other than the specification require-
ments and the amount of bid. The
grantee must promptly transmit to the
grants officer copies of bid protests.
decisions on such protests, and related
correspondence. The grants officer
will cause appropriate review of grant-
ee procurement methods to be made.
(f) On construction contracts elf
ceeding $100,000. each bidder must
furnish a bid guarantee equivalent to 5
percent of the bid price. In addition.
the contractor awarded the contract
must furnish performance and pay-
ment bonds, each of which shall be in
an amount not less than 100 percent
of the contract price. Construction
contracts less than S100.000 shall
follow the State or local requirements
relating to bid guarantees, perform-
ance bonds, and payment bonds.
(g) 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 faci^
ties for such access and inspection*-
The contract must also provide that
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-
ments approved by EPA in the grant
agreement or amendments.
(k) In addition to the notification of
project changes pursuant to 40 CFR
30.900. a copy of any construction con-
tract or modifications thereof, and of
revisions to plans and specifications
must be submitted to the grants offi-
cer.
[38 FR 12784. May 15. 1973. a* amended at
40 FR 20083. May 8. 1975}
§ 40.150 Evaluation or applications.
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 i 40.140. Only application^
considered relevant to EPA researc,
and demonstration objectives will r£*
ceive further consideration and be sub-
jected to additional review. Relevancy
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
-------
§40.165
nical review, will provide the basis
for funding recommendations.
(a) New applications. Applications
considered relevant to EPA research
and demonstration objectives will be
reviewed for technical merit by at
least one reviewer within EPA and at
least two reviewers outside EPA.
Review by a National Advisory Coun-
cil is statutorily required for radiation
grants.
(b) Continuation applications. Con-
tinuation applications will be reviewed
by appropriate EPA staff only. Recom-
mendations for continuation of fund-
in? will be based on progress toward
.tr-r- accomplishment • -.he goals set
forth for the project and continued
Agency needs and priorities.
f 40.155 Availability of information.
(a) The availability to the public of
Information provided to, or otherwise
obtained by. the Administrator under
this Part shall be governed by Part 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 530.235(b). See also Si 2.205 and
2.204 of this chapter.
(c) All information and data con-
>~
-------
Thursday
October 18, 1984
Part III
Environmental
Protection Agency
40 CFR Part 45
Training Assistance Final Rult
40 CFR Part 46
Fellowship Assistance; Final Rule
-------
41004 Federal Register / Vol. 49. No. 203 / Thursday. October 18. 1984 / Ruins and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 45
< OA-FBC 2621-20)1
raining Assistance; Final Ruto
AGENCY: Environmental Protection
Agency.
ACTION: Final rule.
SUMMARY: This final rule revises the
Environmental Protection Agency's
(EPA) regulation at 40 CFR Part 45
governing the award and administration
of EPA training assistance. The
revisions are designed to ensure
consistency with EPA's "General
Regulation for Assistance Programs"
and to reflect current EPA policies on
training assistance awards.
DATE This rule applies to all training
assistance which EPA awards on or
after October IS, 1964.
FOR FUMTMt* INFORMATION CONTACT:
Richard A. Johnson, Grants
Administration Division (PM-218).
Environmental Protection Agency, 401M
Street SW., Washington, D.C., 20460
(202) 382-5296.
SUPflKMBhTARY INFORMATION: Part 45
establishes the policies and procedures
for the award of training assistance by
EPA. We have not updated the training
assistance rule since October 20.1977.
This document updates Part 45 and
incorporates changes to EPA policies on
training assistance awards. Since the
revisions to this rule are largely
technical in nature, we did not publish a
proposed rule for public comment. The
changes to the rule include:
Stipend Levels
In the previous rule, we had a dollar
limit on the use of awarded funds for
stipend amounts in any particular
budget period and a dollar limit on the
amount of an annual stipend. We
deleted those levels from this rule in
order to provide program offices the
flexibility to make changes in the
stipend levels based on program needs
and funding levels without seeking a
deviation from the rule.
Subpart B—Manpower Forecasting
EPA anticipated funding for.
manpower forecasting when the Agency
was first established, therefore, we
reserved Suboart B for the development
of oolicies and procedures for
manpower forecasting assistance
agreements. Since no funds have been
available for such agreements, and none
is anticipated, we deleted the reference
to manpower forecasting in the title of
this part and in the table of contents.
Consistency With 40 CFR Part 30.
"General Regulation for Assistance
Programs"
EPA published a final revision to 40
CFR Part 30 on September 30,1983 (46
FR 45056). EPA revised this rule to make
it consistent with the revised 40 CFR
Part 30, "General Regulation for
Assistance Programs." September 30,
1983.
Regulation Development
Under Executive Order 12291, EPA is
required to make a judgement whether a
regulation is "major" and. therefore,
subject to the regulatory impact analysis
requirements of the Order. We have
determined that this rule is not "major"
because it will not have a substantial
impact on the Nation's economy or large
numbers of individuals or businesses.
There will be no major increases in
costs or prices for consumers.
individuals, industries, or Federal, State,
or local governments. The rule was
submitted to the Office of Management
and Budget as required by Executive
Order 12291.
Under the Paperwork Reduction Act
of 1980.44 U.S.C. 3501 et seq.. the
information provisions in this rule have
been approved by the Office of
Management and Budget (OMB
clearance number 2010-0004).
List of Subjects in 40 CFR Put 45
Administrative practice and
procedures. Environmental protection.
Grant programs—environmental
protection. Reporting and recordkeeping
requirements.
Dated: October 3.1964.
WUttunD.Rucfcelfhau*,
Administrator.
Accordingly, title 40, Chapter I is
amended by revising Part 45 to read as
follows.
PART 45-TRAINING ASSISTANCE
S«t
49.100 Purpose and scope.
43.103 Authority.
45.110 Objectives.
49.113 Definitions.
45.120 Applicant eligibility.
49.123 Application requirements.
45.130 Evaluation of applications.
43.133 Supplemental conditions.
43.140 Budget and project period.
49.145 Allocabiliry and allowability of costs.
45.190 Reports.
49.159 Continuation assistance.
Appendix A—environmental Protection
Agency Training Programs
Authority: Sec. 103 of the Clean Air Act as
amended (42 U.S.C. 7403). sec. 104(g). 100.
,ind n l of the Clean Water Au. j
133 I -.5 C. ' 254(8). 1259. and 12811. socs. 7U07
art! SOOT of '.he Soiid Waste Disposal Act.
-------
Federal Register / Vol. 49, No. 203 / Thursday, October 18. 1984 / Rules and Regulations 41005
§45.120 Applicant eligibility. .
Institutions, organizations, and
individuals are eligible for EPA training
awards as follows:
(a) Clean Air Act. Section 103(b)—Air
pollution control agencies, public and
nonprofit private agencies, institutions.
organizations, and individuals. \o
award may be made under this Act to
any private, profitmaking organization.
(b) Clean Water Act. (1) Section
T)4(b)(3)— State water 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.
(2} Section 104(g|(3|(A|—Publicor
private agencies and institutions, and
individuals.
(3) Sections 104(g)(l) and
l04(g)(3)(Q—State and interstate
agencies, municipalities, educational
institutions and other organizations and
individuals.
(4) Sections 109.110. and Ill-
Institutions of higher education, or
combinations of such institutions.
(c) Solid Waste Disposal Act. (1)
Section 8001(a)—Public or private
authorities, agencies, and institutions
and individuals. No award may be made
to any private, profitmaking
organization.
(2) Section 7007(a)—State or interstate
agencies, municipalities, educational
institutions, and other organizations.
(d) Safe Drinking Water Act. Sections
1442(b) and 1442(d)—Public agencies.
educational institutions, and other
organizations. No awards may be made
to profitmaking agencies or institutions.
§45.125 Application requlremcnta.
Applicants must submit their requests
for assistance on EPA Form 5700-12.
'Application for Federal Assistance."
Applicants must submit the original and
two copies of the application to EPA. If
the assistance agreement is to be
j warded by EPA Headquarters, the
applicant must send the application to
the Environmental Protection Agency.
Grants Administration Division. Grants
Operation Branch (PM-218). 401 M
Street SW.. Washington. D.C. 20460. If
the assistance agreement is to be
awarded by an EPA Regional Office, the
applicant must send the application to
the appropriate Regional Office. (OMB
clearance number 2010-0004.)
§ 45.130 Evaluation of application*.
(aj Consistent with 40 CFR 30.301. the
appropriate EPA program office staff
wili review training applications in
accordance with the following criteria:
(l) 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;
(4J Adequacy of the applicant's
resources available for the project:
(5) Amount of funds necessary for the
completion of the project:
(b) In addition, awards under section
104(g)(l) of the Clean Water Act. are
subject to the following criteria:
(1) Assessment of need for training in
a State or municipality based on
problems with existing wastewater
treatment plants, such as 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.
§ 45.135 Supplemental condition*.
Training awards are subject to the
following conditions:
(a) Trainees must be citizens of the
United States, its territories, or
possessions, or lawfully admitted to the
United States for permanent residence.
(b) Recipients shall not require the
performance of personal services by
individuals receiving training as a
condition for assistance.
(c) Trainees are entitled to the normal
student holidays observed by an
academic institution, or the holiday and
vacation schedule applicable to all
trainees at a nonacademic institution.
(d) Training awards may include a
provision to pay stipends to trainees.
Stipends must be paid under section 111
of the Clean Water Act consistent with
prevailing practices under comparable
federally supported programs.
(e) Training awards under section 111
of the Clean Water Act are subject to
the following conditions:
(1) Recipients must obtain the
following agreement in writing from
persons awarded scholarships for
undergraduate study of the operation
and maintenance of treatment works:
I agree to enter and remain in an
occupation involving the design, operation, or
maintenance of wastewater treatment works
for a period of two yean after the
satisfactory completion of my studies under
this program. 1 understand that if I fail to
perform this obligation 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). Recipients shall credit or pay EPA
for any repayments.
§45.140 Budget and project period.
The budget and project periods for
training awards may not exceed three
years.
§ 45.145 Allocability and allowability o(
coata.
(a) Allocability and allowabiliiy of
costs will be determined in accordance
with 40 CFR 30.410.
(b) Costs incurred for the purchase of
land or the construction of builrlinqs «re
not allowable.
§45.150 Report*.
(a) Recipients must submit the reports
required in 40 CFR 30.505.
(b) A draft of the final project report is
required 90 days before the end of the
project period. The recipient shall
prepare the final projects report in
accordance with the project officer's
instructions, and submit the final project
report within 30 days after the end of :hp
project period.
§45.155 Continuation aaaiatance.
To be eligible for continuation
assistance, the recipient must:
(a) Demonstrate 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 current budget period
that includes estimates 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 term of the current
budget period.
APPENDIX A—ENVIRONMENTAL PROTECTION
AGENCY TRAINING PROGRAMS
I Admimitaonf :•!,;•
Ofllc* ol A». Nona, and Raov
Air Pollution Control Man-
D0»xr Training GranH,
Air Poilunon Cortroi— T«eft-
ncal
Office ol Watar
watar Pollution Control—
Proiauional Tranog
Grant*.
Saia Ormkng Watar Prola*-
s«nal Tranng Gram*.
SaK Onnk«9 Watar—Oc-
cupational Training.
OMoa 01 Sow waat* ana
Enwrgancy Raaponar. Max-
•room Wait* TYanng. j
(FR Doe. M-2T408 Fil«d 10-1: -aj. t-.ti ./-;
MUINOCOOC
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41006 Federal Register / Vol. 49. No. 203 / Thursday. October 18. 1984 / Rules and RegulaHona
40 CFR Part 4«
(OA-FRL2621-2(b)J
Fellowships; Final Ruta
AGENCY: Environmental Protection
Agency.
ACTION: Final rule.
SUMMAMY: This final rule revises the
Environmental Protection Agency's
(EPA) regulation at 40 CFR Part 46.
"Fellowships." governing the award and
administration of EPA fellowship
assistance. The revisions are designed
to ensure consistency with EPA's
"General Regulation for Assistance
Programs" (40 CFR Part 30) and to
reflect current EPA policies on
fellowship awards.
OATt This rule is effective for all .
fellowships which EPA awards on or
after October 18,1984.
fO* FURTHER INFORMATION CONTACT:
Richard A. Johnson. Grants
Administration Division (PM-216).
Environmental Protection Agency, 401 M
Street SW.. Washington. D.C. 20460
(202) 382-5296.
3UPPUEMVNTAMV INFORMATION! Part 46
establishes the policies and procedures
for the award of fellowships by EPA.
We have not substantially updated the
fellowship rule since June 30,1973. This
document updates Part 46 and
incorporates changes to EPA policies on
fellowship awards. Since the revisions
to this rule are largely technical in
nature, we did not publish a proposed
rule for public comment. The changes to
the rule include:
Stipend Levels
In the previous rule, we had a dollar
level for the maximum annual stipend.
We deleted the reference to • maximum
level in this rule in order to give the
program offices the flexibility to make
changes in stipend levels based on
program needs and funding levels
without seeking a deviation from the
rule.
Book Allowance
We increased the book allowance
from S250 to $750
Authority
We updated the Authority section of
the existing regulation to include
references to two additional fellowship
programs. The two additional programs
are suction 8001 of the Solid Waste
Disposal Act and section 1442(d)(2) of
the Safe Drinking Water Act. as
amended.
Consistency With 40 CFR Part 30,
"General Rafulatioo for Assistance
Programs"
EPA published a final revision to 40
CFR Part 30 on September 30.1983 (48
FR 45056). We revised this rule to make
it consistent with the revised 40 CFR
Part 30. "General Regulation for
Assistance Programs," September 30,
1983.
Regulation Development
Under Executive Order 12291. EPA is
required to make a judgment whether a
regulation is "major" and. therefore.
subject to the regulatory impact analysis
requirements of the Order. We have
determined that this rule is not "major"
because it will not have a substantial
impact on the Nation's economy or large
numbers of individuals or businesses.
There will be no major increases in
costs or prices for consumers.
individuals, industries, or Federal. State.
or local governments. The rule was
submitted to the Office of Management
and Budget as required by Executive
Order 12291.
Under the Paperwork Reduction Act
of 1980.44 U.S.C 3501 et seq., the
information provisions in this rule have
been approved by the Office of
Management and Budget (OMB
clearance number 2010-0004).
List of Subjects in 40 CFR Part 46
Administrative practice and
procedures. Environmental Protection,
Grant programs—environmental
protection. Reporting and recordkeeping
requirements.
Dated: October 3.1984.
WUlUm 0. RuckelshaiM.
Administrator.
Accordingly, title 40, chapter 1 is
amended by revising Part 46 to read as
follows:
PAIIT 4€—FELLOWSHIPS
SM.
46.100 Purpose.
46.109 Authority.
46.110 Objectives.
46.115 Type* of fellowshipe.
46.130 Definitions.
48.123 Benefits.
46.130 Eligibility.
46.135 Submission of applications.
46.140 Evaluation of applications.
46.145 Fellowship agreement.
46.130 Fellowship agreement amendment
46.155 Supplemental conditions.
46.160 Acceptance of fellowship award.
46.165 Duration of fellowship.
46.170 Initiation of studies.
46.175 Completion of studies.
46.180 Payment.
Appendix A—Environmental Protection
Agency Fellowship Programs.
Authority: Sec. 103(b)(5) of the Clean Air
Act as amended. (42 U.S.C. 7*03(b)(5)); tecs.
lOKblO) and 104(gM3)(B) of the Clean Water
Act. as amended. (33 U.S.C I254(b)(5) snd
12S4(g)(3)(B)): sec 1442(d)(2) of the Safe
Drinking Water Act ss amended. (42 U.S.C.
300j-l(d)(2)); and sec. 8001 of the Solid Waste
Disposal Act as amended. (42 U.S.C. 0961).
{46.100 Purpoea.
This part establishes the policies and
procedures for all Environmental
Protection Agency (EPA) fellowships
and supplements the requirements in 40
CFR Part 30, "General Regulation for
Assistance Programs."
946.108 Authority.
The EPA is authorized to award
fellowships under the following statutes:
(a) Section 103(b)(5) of the Clean Air
Act as amended (42 U.S.C. 7403(b)(5)]:
(b) Section 104(b)(S] and 104(g)(3)(B)
of the Clean Air Act as amended (33
U.S.C. 1254(b)(5) and 1254(g)(3)rjB):
(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 U.S.C.
6981).
146.110
Fellowships awarded under this part
are intended to enhance the capability
of State or local agencies responsibile
for environmental pollution control or
other agencies 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 field.
146.116 Typaa «f faaovaMpa.
(a) Local agency fellowships are
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 pollution abatement and
control efforts.
(b) State agency fellowships are
awarded to current or prospective
employees of a State environmental
pollution control or regulatory agency to
provide academic professional training
in the areas of pollution abatement and
control.
(c) Special fellowships are awarded to
individuals for education and training in
pollution control science, engineering,
and technology aad in specialty areas
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Federal Register / Vol. 49. No. 203 / Thursday. October 18. 1984 / Rules and Regulations 41007
supportive of pollution abatement and
cor.trol efforts. •
§ 48.120 Definition*
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
minumum 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 a degree.
Part-time fellow. An individual
enrolled in an academic educational
program directly related to pollution
abatement an control and taking at least
6 credit hours but less than 30 credit
hours per school year, or an academic
workload otherwise defined by the
institution as less than a full-time
curriculum. The fellow need not be
pursuing a 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 tuition, fees, and
book allowance, paid directly to the
fellow.
§46.125 Benefit*.
(a) Recipients of assistance under this
part shall be entitled to tuition and fees.
Recipients may receive an allowance for
books and supplies up to a maximum of
S750 for the school year for a full-time
fellow, and are entitled to the normal
student holidays observed by the
academic institution.
(b) Recipients of a fellowships may
receive a stipend at a level determined
by the EPA program office based on
EPA's needs and resources, and on the
student's course load.
(c) Part-time fellows will not be paid
more, than the maximum amount paid to
an equivalent full-time fellow under the
same fellowships program.
546.130 Eligibility.
(a) All applicants for fellowships
under this part must be:
(1) Citizens of the United States, its
territories, or possessions, or lawfully
admitted to the United States for
permanent residence; and
(2) Accepted by an accredited
educational institutional for full-time or
part-i <.me enrollment for academic credit
in cr ducational program directly
relai to pollution abatement and
control.
(b) Applicants for State or local
agency fellowships must be current or
prospective employees of a State or
local agency with responsibilities for
environmental pollution control, and
must be recommended by the
administrator, or designee, 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 State
or local agency.
§ 46.135 Submission of applications.
(a) Applicants must submit their
requests for assistance on EPA Form
5770-2. "Fellowship Application."
Applicants 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.. 20460.
(OMB clearance number 2010-0004.)
(b) The applicant must submit
documentation to show compliance with
the eligibility requirements in § 46.130.
and any additional information required
by the award official. Instructions for
filing are contained in the application
kit.
§ 46.140 Evaluation of applications,
(a) EPA will evaluate fellowship
applications based upon:
(1) Their relevance to EPA's program
needs;
(2) The availability of funds; and
(3) EPA's priorities.
(4) Appropriateness of the fellow's
proposed course of study:
(5) Evaluation of the applicant in
terms of potential for study, as
evidenced by academic record, letters of
reference, training plans; and any other
available information.
J 46.145 Fellowship agreement.
(a) The fellowship agreement is the
written agreement, including
amendments, between EPA and a
fellow. The agreement. EPA Form 5770-
8. "Fellowship Agreement." will state
the terms and conditions governing the
fellowship. (OMB clearance number
2010-0004.)
(b) EPA will not participate in costs
incurred by the fellow before both the
award official and the fellow sign the
agreement.
(c) The fellow must use the funds for
the purposes stated in the fellowship
agreement If the fellow fails to comply
with the terms and conditions of the
award, the award official may apply the
sanctions in 40 CFR Part 30, Subpart I.
§ 46.150 Fellowship agreement
amendment
(a) The fellow must receive a formal
amendment before implementing:
(1) Changes in the objective of the
agreement:
(2) Changes in the assistance amount:
(3) Substantial changes within the
scope of the agreement: or
(4) Changes in the project period.
(b) Fellows must submit a completed
EPA Form 5770-6. "Fellowship
Amendment" (OMB clearance number
2010-0004) when requesting an
amendment to the fellowship agreement.
(c) Minor changes in the agreement
that are 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 funds for any costs incurred by
the fellow in excess of the assistance
amount unless the award official
approves the change in advance under
§ 46.150(a). The fellow must ..form the
EPA project officer in writing before
implementing minor changes.
$46.155 Supplemental conditions.
Recipients of a State or local
fellowship receiving financial assistance
under section 1442(d)(2) of the Safe
Drinking Water Act. as amended:
sections 104(b)(5) and 104{g)(3)(B) of the
Clean Water Act as amended: and
section 6001 of the Solid Waste Disposal
Act must agree to remain in the
employment of the State or local agency
that recommended the recipient for an
EPA fellowship for twice the period of
the fellowship. If the recipient fails to
perform this obligation the recipient may
be required to repay the amount of the
EPA fellowship.
9 49.160 Acceptance of fellowship award.
The applicaat accepts the fellowship
by signing and returning the fellowship
agreement to the EPA award official
within three weeks after receipt, or
within any extension of such time that
may be permitted by the EPA award
official. If the applicant does not sign
and return the agreement to the award
official or request an extension of the
acceptance time within three calendar
weeks after receiving the agreement, the
offer is null and void
{46.166 Duration of fetowsMp.
(a) Full-time fellowships will not
exceed one year.
(b) Part-time fellowships will not
exceed three years.
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41008 Federal Register / Vol. 49. No. 203 / Thursday. October 18. 1984 / Rules and Regulations
{46.170 InHtattofi of ttidtas.
(a) The fellow must submit EPA 5770-
7 "Fellowship Activation Notice" when
they start their course of studies (OMB
clearance number 2010-0004).
(b) If the EPA Grants Administration
Division has not received the signed
Fellowship Activation Notice within six
months following the date of the award.
EPA may terminate the fellowship.
546.175 Completion of studlM.
Fellows must submit EPA Form 5770-9
"EPA Fellowship Termination Notice."
when the fellow completes the course of
study. (OMB clearance number 2010-
0004)
J46.HO Payment
(a) EPA will pay stipends directly to
the fellow on a monthly basis or any
other basis 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 the book allowance
directly to the fellow only after EPA
receives the signed EPA Form 5770-7.
(c) EPA will pay tuition and fees in a
lump payment directly to the sponsoring
institution only after EPA has received
the signed EPA Form 5770-7.
APPCN04X A—ENVmONMENTAl PROTECTION
AGENCY FELLOWSHIP PAOQMAMS
Otfic* ol Mr. Now, mtf ««*•
•IKK A* PoMon
in DM. M-T40S PtM tO-tr-tfc *tt ta|
-------
Monday
March 9, 1992
Part III
Environmental
Protection Agency
40 CFR Part 47
National Environmental Education Act
Grants Regulations; Interim Final Rule
-------
8390 Federal Register / Vol 57, No. 46 / Monday, March 9. 1992 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 47
[FRL-40W-7]
National Environmental Education Act
Grants Regulations
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Interim final rule.
SUMMARY: The Environmental Protection
Agency (EPA) is promulgating an
interim final rule on the award of
financial assistance under section 6 of
the National Environmental Education
Act (NEEA). This rule codifies policies
and procedures for financial assistance
awarded by EPA to eligible agencies,
institutions and organizations to support
projects related to environmental
education and training.
EFFCCTIVC DATES: EPA is publishing this
rule as an interim final rule which is
effective on March 9,1992. EPA will
accept public comments on this rule
until April 8,1992.
ADDRtttKK Comments may be mailed
to Mr. George Walker. Office of
Environmental Education (A-107). U.S.
Environmental Protection Agency, 401 M
Street SW., Washington. DC 20460.
The docket for this rule and copies of
the 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) 280-5928.
FOR FURTHER INFORMATION CONTACT
Mr. George Walker. (202) 260-4484.
SUPPLEMENTARY MFOaMATIOtC
I. Background
On November 16,1990; Congress
enacted and the President signed the
National Environmental Education Act
(NEEA). Public Law 101-619. In section 6
of the NEEA. it established a program
for grants and cooperative agreements
to support projects related ta
environmental education~and training,
and directed EPA to pvbiian a regulation
to implement the programs This
regulation implements the statutory
requirements of section 8 of the NEEA.
The definitions, eligibility requirements.
solicitation procedures, priorities for
award, and limits on amount of award
p.:.: .aken directly frc.. -,h3 K.™A.
The NEEA also establishes a
maximum Federal share of 75% for
demonstration projects. As a policy
matter, to ensure that recipients are
committed to successful completion of
projects. EPA has decided to apply this
maximum to all types of grants h warded
under section 6. Thus, as a general rule.
all grant recipients in this program will
be expected to provide at least a 25%
match, including in-kind contributions.
In addition to the requirements of the
Act. recipients must comply with the
provisions of EPA'3 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.
II. 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 not
satisfy any of the criteria the Executive
Order specifies for a major rulemaking.
and therefore this is not subject to a
Regulatory Impact Analysis.
This regulation was submitted to the
Office of Management and Budget
(OMB) for review as required by
Executive Order 12291.
IIL Paperwork Reduction Act
The information collection
requirements in this rule have been
approved by the Office of Management
and Budget (OMB) under the Paperwork
Reduction Act 44 U.S.C. 3501 et *eq. and
have been assigned control number'
2030-0020.
Public reporting burden for this
collection of information is estimated at
19 hours per response, including time for
reviewing instructions, gathering
information, preparing the application
package and status reports, maintainmg
records on the data needed, and
completing the collection of information.
Send comments regarding the burden
estimate or any other aspect of this
collection of information, including
suggestions for reducing this burden to?
Chief. Information Policy Branch.
Regulatory Management Division (PM-
223Y): EPA: 401M St. SW.. Washington.
DC 20460, and to the Office of
Information and Regulatory Affairs,
Office of Management and BudgeC
Washington, F'2 £?:'". na.v.ed
"Attention: Desk Officer for EPA."
. IV. Regulatory Flexibility Act
EPA did not develop a Regulatory
Flexibility Analysis for this regulation-
because it is exempt from notice and
comment rulemaking.under section 553
of the APA. and therefore, is not subject
to the analytical requirements of
sections 603 and 604 of the Regulatory
Flexibility Act (5 U.S.C. 603 and 604).
List of Subjects in 40 CFR Part 47
Grant programs— education. Grant
programs — environmental protection,
and Reporting and recordkeeping
requirements.
Dated: February 27. 1992.
William K. Redly,
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-NAT1ONAL
ENVIRONMENTAL EDUCATION ACT
GRANTS
Sac
47.100 Purpose and scope.
47.105 Definitions.
47.110 Eligible applicants.
47.115 Award amount and matching
requirements.
47.120 Solicitation notice and proposal
procedures.
47.125 Eligible and priority projects and
activities.
47.130 Project performance.
47.135 Disputes.
Authority: 20 U.S.C 5505.
947.180 Purpose and scope.
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
30 for other than State and local
recipients. Those regulations contain
Federal audit and other general
administrative requirements. This
regulation does not apply to the
programs implemented under sections 5
and 7 of the NEEA.
{47.109 Deflnloona,
(a) Environmental education and
environmental education and training
mean educational activities and training
activities involving elementary,
secondary, and po§'"""""'4 — / students,
as Mch terms are deiineii in the State in
which may reside, and environmental
educan ersonnel, but does not
ical training activities
toward environmental
management professionals or activities
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Federal Register / Vol 57. No. 46 / Monday, March 9. 1992 / Rules and Regulations 8391
primarily directed toward the support of
noneducational 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 as defined in section
198 of the Elementary and Secondary'
Education Act of 1965 (20 U.S.C. 3381)
and shall include any tribal education
agency, as defined in { 47.l05(f);
(d) Not-for-profit organization means
an organization, association, or
institution described in section 501(c)(3)
of the Internal Revenue Code of 1988,
which is exempt from taxation pursuant
to the provisions of section S01(a) of
such Code;
(e) Noncommercial education
broadcasting entities means any
noncommercial educational
broadcasting station (and/or its legal
nonprofit affiliates) as defined and
licensed by the Federal Communications
Commission:
(f) Tribal education agency means a
school or community college which is
controlled by an 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 Indians
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.
{47.110 EMgMe sppUcsnts.
Any local education agency (including
any tribal education agency), college or
university. State education agency or
environmental agency, not-for-profit
organization, or noncommercial
educational broadcasting entity may
submit an application to the>
Administrator in response to the
solicitations described in 147.120.
§47.115 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 not exceed
75 percent of the total project costs. The
non-Federal share of project costs may
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
this paragraph, including full Federal
funding.
§ 47.120 Solicitation notice and proposal
procedures.
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.
§47.125 Eligible end priority projects and
activities.
(a) Activities eligible for funding shall
include, but not be limited to.
environmental education and training
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 Slates 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.
§ 47.130 Performance of grant
(a) Each project shall be performed by
the recipient, or by a person satisfactory
to the recipient and to the EPA.
Workplans shall accompany all
applications, shall identify who will be
performing activities, and shall be
approved by EPA prior to funding.
(b) Budget periods normally will 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 all 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.
§47.135 Disputes.
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.
(FR Doc. 92-5263 Filed i-6-92; 8:45 am)
MJUMOCOOf M40-M-M
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APPENDIX I
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APPENDIX I
EPA ORDER 1000.25, "USE OF RECYCLED
PAPER"
-------
EPA
No.:
Approv,) D«t.: JAN 2 * -9SO
Use of Recycled Pacer
1. PURPOSE. This Order establishes Agency policy to
encourage the use of recycled paper.
2. BACKGROUND. The EPA has set a goal for the nation to
reduce and recycle twenty-five percent of municipal solid waste
by 1992. One of the keys to Baking recycling successful Is the
development of stable markets for produces containing recovered
materials. 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 an Agency
policy promoting the use of recycled paper.
3. £2LI£X. It is Environmental Protection Agency policy
to use, and to promote the use of, recycled paper.
4. RESPONSIBILITIES. The Procurement and Contracts
Management Division (PCXD) is directed to ensure that all new
contracts specify that contractors use recycled paper for all
reports required for delivery to the Agency. Where feasible,
PCKD should seek to modify existing contracts to include the same
requirement.
The Grants Administration Division (GAD) is directed to
include in all new 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 Agsncy.
All Agency employees should be mindful of our initiatives in
the area and should do their part to reduce and_recycle waste.
* ^^
am
form I31j.ll*ij-4«i
-------
MEMORANDUM
SUBJECT: EPA Order on the Use of Recycled Paper
FROM: Harvey G, Pippen, Jr., Director
Grants Administration Division
TO: Assistant Regional Adninistrators
Regions T - 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 the inclusion of A special condition.
Since that time, we have received several questions and
comments on the special condition. ^ised 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 -for all
reports which are prepared as a part of this agreement
and delivered to the Agency. This 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."
This new version makes it clear that the recycled paper
special condition results from ar, 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
irtuned lately.
Should you have any questions or comments regarding this
matter, please call me or have your staff contact Ton Fletcher on
382-5297.
Attachment
cc: Regional Grants Branch Chiefs, Regions I - X
bcc: Bruce Faldman
Frad Meadows
Scott McMoran
Official H. Pippen P. Hull 3. Feldman
Reading T. Fletcher R, Johnson
Division
PM-216F:TFLETCHER:tf:801 FC:382-5297:4/24/90
C:\WP50\WPFILE\RECYCLE3.MEM
-------
APPENDIX J
-------
APPENDIX J
EPA ORDER 5730.1, "POLICY AND
PROCEDURES FOR FUNDING ASSISTANCE
AGREEMENTS"
-------
&EPA
Classification No.:
Approval Date:
5730.1
1/21/94
POLICY AND PROCEDURES FOR FUNDING ASSISTANCE AGREEMENTS
1. 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 assistance programs
or 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 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 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: (1) 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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EPA ORDER 5730 .1
1/21/94
2. 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:
a. 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. Both the National Program Manager and 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.
b. Program Element. Statutory 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 5700-20A. 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.
3. DEFINITIONS.
a. 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 and\or an Assistance Funding Order (EPA Form
5700-14) .
b. Assistance Funding Process. The process by which
assistance funds are (1) planned in a Program Office's budget
request to OMB and Congress, (2) distributed during their operating
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EPA ORDER 5730. 1
1/21/94
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.
c. 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 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.
d. 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 first made these funds available. This term
should not be confused with 'recipient requested carryover' of
(unused, previously obligated) funds on a continuation assistance
agreement. The latter do not require any action to be taken by the
Budget Division. (Ref. - EPA Resources Management Directive System
(RMDS) Chapter 2510)
e. 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.
f. 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
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EPA ORDER 5730. 1
1/21/94
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 30)
g. Decision Memorandum. The Program Office's memorandum
containing the decision and justification for either funding or
rejecting an assistance proposal. The memorandum is sent to the
Grants Management Office as part of the assistance funding package.
For grants awarded in the Regions, this decision is signed by the
Approval Official or his\her respective designee. For all grants
awarded from Headquarters (except fellowships), the Recommending
Official (RO) writes the Decision Memorandum. The Approval
Official approves or rejects the proposal based upon the
justification and recommendation made by the RO.
h. 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
records all delegations of authority, except emergency\letter
delegations in the Delegation Manual and distributes them to
Regional and Headquarters offices.
i. Grant. The agreement used when the principal purpose of
the relationship is the transfer of money, property, or anything
else of va'lue 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 Federal
involvement is not 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.)
j. Grants. Management Offices (GMO). The Headquarters and
Regional units responsible for all business management aspects
associated with the review and negotiation of applications and the
award and administration of funded projects through audit
resolution and final close out.
k. National Program Manager. The individual responsible for
management of a program on a national level.
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EPA ORDER 5730.1
1/21/94
1. 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.)
m. 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.
n. Regional Program Manager. The individual responsible for
technical\programmatic management of an assistance program at the
regional level.
o. Statutory Authority. The. section of authorizing
legislation specifically providing authority to the EPA to award
assistance agreements including grants and cooperative agreements
for the intended purpose. (Appears as Item #19 on EPA's Assistance
Agreement.)
4. PROCEDURES.
a. Planning and Communication.
(1) Program Office Responsibilities.
(a) The Program Office(s) should be encouraged to
establish an annual plan (including early identification of
additional award activities for the fiscal year) and schedule for
recommending awards and to regularly communicate that plan and
schedule to Headquarters and Regional Grants Management Offices.
In particular, the Program Office 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).
(b) 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.
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EPA ORDER 5730.1
1/21/94
(2) Grants Management Office Responsibilities.
(a) 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.
(b) The GMOs should hold periodic meetings with
Program Contacts to discuss proposed assistance funding plans and
to plan their workload.
(c) The GMOs must plan their workload to allow for
processing some unexpected, last-minute, fourth-quarter awards.
b. Identifying Program Element, Statutory Authority,
Delegation of Authority.
(1) Program Office Responsibilities.
(a) 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
the Headquarters Budget and Grants Management Office if the
assistance is to be awarded from Headquarters or the Regional
Budget and Grants Management Offices if the assistance is to be
awarded from the Region.
(b) 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. Funds provided to the
Regions for assistance projects should be placed in the proper
Budget Object Class (41).
(c) 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
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EPA ORDER 5730.1
1/21/94
respective assistance program. The NPM must submit the completed
Summary Sheet and program guidance to GAD for concurrence prior to
its issuance.
(d) The Program must identify 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.
(e) 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.
(f) The Program Office must designate the program
element, statutory authority, and delegation of authority in the
decision memorandum.
(g) The Program Office should refer any legal
questions such as those regarding statutory authority, match
requirements, and eligibility to the Office of General Counsel,
Grants Law Branch, or Regional Counsel.
(2) Grants Management Office Responsibilities.
(a) The GMO provides an overall "check and balance"
function, assuring the correctness of the program element and
statutory authority, and the existence of a delegaticr. of
• authority.
(b) The GMO should request clarification from che
Office of General Counsel or Regional Counsel on any outstanding
legal questions.
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EPA ORDER 5730.1
1/21/94
(c) The GMO should return, in a timely manner, all
incomplete. funding\grant packages to the Program Office and should
communicate to the Program Office the information needed to
complete the package.
(d) The Grants Administration Division (GAD) and
GMOs, when appropriate, must incorporate the standard operating
procedures stated in this policy into their training programs,
e.g., project officer training, and Basic Grants course.
(e) GAD should verify that its Assistance Administrative
Summary Sheet appears in all program guidance.
5. ADDITIONAL REFERENCES.
a. For further information regarding the legal
responsibilities of the Approval Official under borrowed
authorities, refer to Sallyanne Harper's 6/9/93 memorandum,
Approval Official's Responsibilities for Grants and Cooperative
Agreements Originating and Managed in Other Offices.
b. For further information regarding the administration of
grants, cooperative agreements, and interagency agreements, refer
to the Assistance Administration Manual, EPA Document Number 5700
1984 Edition.
c. For further information regarding this Order, please
contact Chief, Grants Policy and Procedures Branch, Grants
Administration Division.
Jonathan fc. Cannon
Assistant Administrator
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EPA ORDER
5730 .1
1/21/94
&EPA
United States
ENVIRONMENTAL PROTECTION AGENCY
Washington, DC 20460
ASSISTANCE ADMINISTRATIVE SUMMARY SHEET
JOTE: Quality Assurance: Any applicant proposing environmentally related measurements or data collection must comply with EPA's
requirements for quality assurance as cited in 4O CFR Part 30.503 and 40 CFR Part 31.45.
. Operating Program/Office:
2. Program Contact(s):
Catalog of Federal Domestic Assistance (CFDA) Number:
Program Title:
Program Purpose:
. Eligible Applicants/Recipients:
'. Type of Assistance:
| | Grant
["n Loan
|~~] Cooperative Agreement
8. Nature of Assistance:
I I Continuing Program
I I Project
3. Statutory Authority:
Act:
Section: ___
10. Regulatory Authority:
Programmatic:
Administrative: _
11a. Cost Sharing/Match Requirements:
Yes [ | No | |
MOE
lib. Basis of Cost Sharing/Match Requirement (Check One):
Statute I I Program Regulation I I
Program Guidance | | Administrative Regulation | |
12. Limitations: Yes | | No | | (If "Yes", list the limitations)
13. Delegation of Authority:
Delegation Number:
Title of Delegation:
14. Subject to Intergovernmental Review? Yes | | No | | (If No, why?)
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 K of individual(s) who can be contacted for further
information on this program.)
3. CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) NUMBER: (The number assigned to
an 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. OFFICIAL PROGRAM TITLE: (The official title of the assistance program. May or may not be included
in the Catalogue of Federal Domestic Assistance. (See 03.) Be concise and descriptive (40 characters or
less).
5. PURPOSE: (A one 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. As
necessary, OGC will verify statutory authority to award financial assistance as proposed and make other
legal determinations.)
10. REGULATORY AUTHORITY: (Cite programmatic regulation(s) governing the assistance program in
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 grants?)
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.)
14. INTERGOVERNMENTAL REVIEW: (Is this required? Executive Order 12372 provides for State's right
to review applications for Federal assistance. Coordinate with Grants Policy and Procedures Branch,
Grants Administration Division for verification of requirement.)
15. PROGRAM CODEVIDENTIFIER: (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 used to identify the transactions of the Federal Government
by the nature of the goods or services purchased, as required by OMB Circular A-l 1.)
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APPENDIX K
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APPENDIX K
CARRYOVER POLICY (COMPTROLLER
POLICY ANNOUNCEMENT 88-09
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
MAY 6
COMPTROLLER POLICY ANNOUNCEMENT
NO. 88-09
OF
ADMINISTRATION
AMD RESOURCES
MANAGEMENT
MEMORANDUM
SUBJECT:
FROM
TO:
'nolig«ted Balances of
Disposition
Assistance
David P.
Comptroll
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 II 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-F, "Recovery and Use of Construc-
tion Funds," and will be found in the Resources Management
Directives System 2550D, Superfund Financial Management, which
will be issued shortly.
Attachment III contains examples of how this guidance
applies to specific types of assistance agreements.
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Attachment I
POLICIES FOR THE DISPOSITION OF UNOBLIGATED
BALANCES OF ASSISTANCE AWARDS
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 II. 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 authorized 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 Super fund
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 may 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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EFFECTIVE DATE
Allowance Holders must ensure that assistance awards
•ade fron their respective allowances are administered in
accordance with this Policy Announcement no later than
June 30, 1988.
FOR ADDITIONAL INFORMATION
If you would like additional information 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 made to Scott McMoran, Grants Policies and Proce-
dures Branch, Grants Administration Division, at 382-5293.
Questions concerning recoveries of funds under Agency
appropriations and about the scope of this Policy Announcer 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
cc: Harvey Pippen
J. Richard Bashar
John Sandy
Alvin Pesachowitz
Vincette L. Goerl
Tony Musick
John Elliott
Carole Ansheles
FMD Branch Chiefs
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The recipient (e.g., a State or local government agency,
or a university) uses the EPA award as its authority to enter
into its own "obligations" \J 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 II below.
c. GAP Review. In 1984 GAO reviewed EPA compliance with the
Federal Managers Financial Integrity Act (FMFIA). 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 FNFIA weaknesses, we made a commit-
ment to review our current practices for making recipients'
unexpended bala.._3s available in later budget periods. Im-
policies and procedures set out in the following sections are a
result of that review and seek to strengthen our management of
those funds.
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-
ment offices (FMO) copies of the documents used to effect the
amendments.
b. Decreases in Obligation Amounts. 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 budget
p«riod. However, decreases could be executed for various reasons
during the budget period. In either case, the adjustments must
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 may 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 of
a like amount from a new Agency appropriation. However, before
taking either action, an award official must first determine
which of the fo? ~«ing criter'^ fit:
1. Project agreements. Project type assistance agreements
involve undertakings with a discrete outcome, product or report.
Most of EPA's 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
Of 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. If there are major change* in the scope
of work, the unexpended balances may be carried
forward only if the source appropriation for those
balances hat 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
provides funding for a number of environmental programs or other
continuing activities. The recipients are often State or local
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 as long as: 1) the transfer
to the su-sequent budget period is made before
the source appropriation for those funds 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 a subse-
quent budget period, the downward adjustment will be considered a
recovery to the source appropriation.
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DISPOSITION OF UNOBLIGATED BALANCES OF ASSISTANCE A WARPS.
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If the less structured Form 5700-20B is used to execute the
preceding actions, the same information must be contained in
readily identifiable form on that document.
II. 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
awards (e.g., project type agreements), the FSR for these pro-
jects may contain balances of Federal funds unobligated by the
recipient. In such a case, a Form 5700-20A/B must be completed
to decrease the award by that amount. The 5700-20A/B and FSR
will be submitted to the servicing financial management office
so that the deobligated amount can be recorded in EPA's FMS.
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 memorandum of September 12, 1984,
entitled "Recertification of Funds," and is being revised.
III. 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 EPA can keep expired, unavailable amounts
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 program 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
are 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, assistance project budget periods are not
concurrent with the Federal fiscal 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 ends.
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 must also be met.
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Attachment II
PROCEDURES FOR THE DISPOSITION OF UNOBLIGATED
BALANCES OF ASSISTANCE AWARDS
I. TRANSFER OF FUNDS FROM ONE BUDGET PERIOD TO ANOTHER
Transfers 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 Form 5700-20A).
(EPA1s optional amendment form, 5700-20B, or other appropriate
form, may 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 form.) The
executed forms must be provided to the servicing financial
management office when signed both by EPA and the recipient.
The first Form 5700-20A/B will decrease funds awarded for
the earlier budget period. For the succeeding budget period, the
second 5700-20A/B may: 1) provide interim funding, 2) increase
the funds availal 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
nade 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 must be signed by the recipient's authorizing
official.
In lieu of the recipient official's signature on the 5700-20A/
an award official can use the recipient's interim or final FSR if
the FSR: 1) covers the full budget period, and 2) is signed by an
authorized recipient official. If this option is used, the award
official must 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 Form 5700-20A as
follows:
1) Item 1. The assistance ID in item 1 serves as the
obligating document number for the Financial Management System
(IT-IS), 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) Item 30. Item 30 ("EPA Amount this Action") will include
the former award, the amount of the decrease in "( )" and the
amended total. [(The financial management office will use Trans-
action code 050.2 to record the decrease in the Financial
Management System (FMS)].
4) Items 34 and 38. Items 34 (Recipient Contribution) and
38 (Allowable Project Cost) will be modified to show the effect,
if any, of this amendment on these categories.
5) Item 39. Item 39 (Fiscal) includes the standard accounting
information 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* I tea 22. A brief explanation of the action will be
included in the narrative.
3. Item 30. This item would be completed only if the amount
of the award for the "current" budget period were being decreased,
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
aaountu 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 the amount
of the decrease would be placed in parentheses in the final block
of that line item.
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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 ZPA 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 (FMS).
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 (AC6C) 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 $50,000 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
uiiing 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 uocuments
effecting the decrease. The FMO recorded the increase against
the current year obligation document number using Transaction
Code 059.1, and the accounting data for these funds.
EXAMPLE B — Continuing Environmental Program, Expired
Appropriation
In the previous example, all the necessary actions to make
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 /^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, which
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 tec-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 submitted a continuation application for budget period
"02." EPA provided incremental funding for this project through a
continuation award (budget period "02") made late in Fiscal Year
1987. A third, and final, budget period was approved in Fiscal
Year 1988 to conclude the project.
Figure 1 — Example B
FY 1986 FY 1987 FY 1988 FY 1989 FY 1990
B.P. "01" B.P. "02" B.P. "03"
During early fiscal year 1988, the University submitted 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 made available in budget period "02" for continued work on the
project. Upon approval from the Office of Research and Develop-
ment,, the award official executed an amendment to make these
funda available in addition to the previously awarded amounts for
budget period "02." As costs were incurred and drawdowns made
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 made available, but in this instance
no additional funding was required to complete the project. Thus,
Fiscal Year 1988 funding awarded for budget period "03" was re-
placed by the funds made available from budget period "02."
The source appropriation for these "displaced" funds was the two-
year RfcD appropriation available for obligation in Fiscal Years
1988 and 1989, and therefore these funds became available for
the Budget Division to recover and reissue.
The FSR 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 L
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APPENDIX L
POLICY ON PERFORMANCE BASED
ASSISTANCE
-------
•4
A \
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. 0 C. 20460
31
TMf ADMINISTRATOR
MEMORANDUM
SUBJECT: Policy on Performance-Bashed Assistance
FRONs Lee M. Thomas
TOt Assistan^ Administrators
General Counsel
Inspector General
Associate Administrator
Regional Administrators
Staff Office Directors
Division Directors
I an pleased to issue the attached policy on EPA's perfor-
mance-based assistance to States* This policy represents an
important step in the continuing effort to achieve environmental
results through a strong EPA/State partnership.
Our assistance to States covers a wide range of continuing
environmental programs* In the past, the process for developing
and managing assistance agreements has varied significantly among
programs and Regions. This policy establishes an Agency-wide
approach toward negotiating assistance agreements, conducting
oversight of those agreements, and responding to key oversight
findings. While the aim of the policy is a consistent approach
acroas Agency programs, it retains considerable flexibility for
Regions to tailor assistance agreements to the unique environ-
mental conditions of particular States.
This policy is effective immediately. The accompanying
Question and Answer Package explaine how FY'86 assistance agree-
ments will be expected to comply with it and details the rationale
behind major policy components.
The Deputy Administrator will monitor implementation of the
Policy on Performance-Based Assistance and issue special instruc-
tions as necessary. I expect Assistant Administrators to advise
the Deputy Administrator of actions planned or taken to make their
prograa policies, guidance and procedures fully consistent with
this policy within thirty days.
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Regional Administrators are responsible for ensuring that
their staffs and States receive, understand and begin to apply
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 policy
have agreed to make Regional visits to explain and discuss it.
I would like to commend the task force that developed this
policy, whose members included managers and staff from EPA's
Headquarters and Regions, and State Environmental Directors,
and representatives from the Washington-based Executive Branch
Organizations. 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 aa pleaaed to iaaue this EPA Policy on Performance-Based
Assistance. Thia document waa developed by a taak force compoaed
of repreaentativea from EPA Readquartera and Regiona* State envi-
ronmental agenciea and Executive Branch Organizations to eatabliah
a conaistent, Agency-wide approach toward negotiating and managing
assistance agreements with States.
The three major components of the policy deacribe how assis-
tance agreements should be negotiated, how a State'a performance
against negotiated commitments should be aaaessed* and what actions
should be taken to reward accomplishments and correct problema.
The overall approach is one of EPA/State cooperation in setting
and attaining environmental goala through.effective State programa.
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 reault from this approach.
Lee N. Thomas Date
Adminiatrator
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EPA POLICY ON PERFORMANCE-BASED ASSISTANCE
PURPOSE
This policy establishes an Agency-wide approach which links
U.S. EPA1s 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-based 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 conca*..«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 "Consequences 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. Zt elaborates on regulations governing State and
and Local Assistance (40 CPR Part 35, Subpart A) promulgated
October 12, 1982, and the General Regulation for Assistance Programs
(40 CFR Part 30) promulgated September 30, 1983. 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, 1984)
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 SPA's assistance for con-
tinuing environmental programs), it applies equally to interstate
and local agencies which receive similar support.
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PRINCIPLES AND APPROACH
PRINCIPLES
This policy on performance-based assistance is designed to
strengthen the EPA/State partnership by ensuring that EPA assis-
tance facilitates the iraplmentation 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 "erformance-based assistance as a management
tool to promoce and recognize the effective performance
of State environmental program*, and to ensure mutual
accountability;
o EPA Regions and programs will retain flexibility to tailor
the performance-bas
guiding principle*}
the performance-based approach to their needs and the policy's
- -ir
o States and EPA should share a common set of expectations
regarding performance coanitments and likeiy responses
to identified problems* There should be no surprieee as
EPA and Statee relate to each other under this policy;
o In negotiating State- performance objectives, EPA and the
States will seek realistic commitments and presume good
faith in their accomplishment)
o EPA and the States should maintain continuous dialogue
for the rapid identification, solution and escalation
of problems to top level managers;
o EPA i« fully coaaitted to the success of State environ-
mental programs and will seek opportunities to acknowl-
edge tneir accomplishments.
APPROACH
The policy consists of three basic parts. The first section
describes components of assistance agreements and how they are to
be negotiated. The second section lays out BPA's expectations for
the review and evaluation of assistance agreements and escalation
of significant findings. The final section describes how EPA should
respond to the findings of oversights 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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ASSISTANCE A^REEME^T
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 agreement, form
a fundamental basis for evaluation of State performance.
An assistance agreement should include three components: 1) a
work program; 2) identification of support (other than federal
assistance funds) a State needs from EPA to accomplish work program
commitments; and, 3) a monitoring and evaluation plan.
APPROACH
EPA will require that the top national priorities as iden 'led
in Agency guidance b« explicitly addressed in all State work pro-
grams. 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 wi£h States over what combina-
tion of national and State priorities can deliver the greatest
environmental benefit with resources available after EPA's top
national priorities have been addressed.
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, and 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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WORK PROGRAM
The work program should specify the outputs a State will pro-
duce under its federal assistance award (including the State match
and level of e-ffort) and the resources and time frames for completing
the outputs.
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 Work programs should focus on the objectives a State
will meet, not how the State will accomplish an output.
o Past performance should affect work program*. 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's
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 responsibilites 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 n««d not indicate
resource levels, but only program activities. EPA will
not exaaino these activities in the course of assistance
oversight except when necessary 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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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-
formance. 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 assistance
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 least once a
year by experienced, skilled EPA staff; they should contain no
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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
itii inability to supply promised support.
o Formal and informal evaluations by EPA should be constructive,
conducted in the spirit of promoting good performance through
problem-solving, not *-Ult-finding.
o EPA's review and evaluation should emphasize 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.
o Formal review of State performance under the assistance agreement
will entail, at a minimum, one on-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 timo.
.o Assistance oversight should use existing reporting and evaluation
mechanisms to the extent possible.
CONSEQUENCES OF OVERSIGHT
Oncrt the assistance oversight process has identified and
documented 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 uncovared problems, and the imposi-
tion of sanctions to address persistent, serious performance prob-
lems.
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APPROACH TO OVERSIGHT RESPONSE
The Agency's goal in providing performance-baaed assistance
is to promote national program objectives by supporting effective
State environmental programs. Actions in response to oversight
findings will be oriented toward finding the most effective
ways to maintain or improve a State program's performance.
Wherever possible, EPA should acknowledge excellent performance
and help States solve problems which impede performance through
corrective actions.
If problems regarding State achievement of work program
commitments persist, EPA should pursue corrective steps as
necessary based on experience with a given State* In general,
sanctions should be imposed only when corrective actions have
failed to solve persistent, significant performance problems.
Before taking any sanction against a state, EPA should raise
the performance issu* to the highest levels of the Region and
State necessary to negotiate an effective solution to the
underlying problem. Sanctions should not be necessary if both
parties are explicit, straightforward and realistic in their
expectations of one another and approach the assistance agreement
process in the spiri't of cooperation.
INCENTIVES
o When a State meets its negotiated commitments or other-
wise demonstrates success, the EPA Regional Office
should take steps to acknowledge excellent State
performance at the conclusion of the oversight review
or at the end of the' assistance agreement period.
o EPA is committed to publicising State program success.
Assured recognition of a State's environmental achievements
is one of th« most effective incentives at EPA1 a disposal.
Publicizing accomplishments also benefits States with per-
formance problems by providing them with models for success.
o In general, when a State demonstrates steady progress or
a sustained level of high performance against negotiated
commitments, EPA will institute the most appropriate rewards
for achievement and incentives to promote continued success.
Possible actions include but are not limited tot
- Reducing the number, level, scope and/or
frequency of reviews, reporting, or in-
spections to the minimum necessary for
effective national program management;
- Increasing State flexibility in using funds
for special projects or State priorities;
- Offering financial incentives (within existing
resources), such as supplemental funding;
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- Publicizing program successes through joint
media presentations, awards/ special letters
of commendation to the Governor* or technology
transfer to other States, EPA Regions and
Headquarters.
CORRECTIVE ACTIONS
o When oversight review uncovers a performance problem and
determines its cause, EPA and the State must act on those
findings by taking appropriate corrective steps.
o Regions must initiate discussions with those States where
problems have emerged, and work cooperatively with them to
establish effective remedial strategies. This negotiated
strategy should specify the time frame during which EPA will
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 tthe unigue history and needs of a given State.
This policy does not prescribe any particular sequence of
corrective actions which must 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 resources; 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 not able to provide a particular essential
type of specialized assistance to a State, the Region should
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
problesie. When corrective actions have failed* or EPA and
a State cannot agree on a corrective action, the Region
may coneider imposing a sanction. If a sanction ie contem-
plated, the performance issue should be escalated to the
highest appropriate level of EPA and the State. The follow-
ing sequence should be observed whenever possible to ensure
that significant problems receive prompt attention and are
solved expeditiouslys
a. The Regional Division Director responsible for
managing the assistance agreement will raise the
issue to the attention of the Deputy Regional
Admininstrator or Regional Administrator and advise
his/her State counterpart of this notification.
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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 section 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
terms 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 it 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 work 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 PY'86 assistance agreements?
Any PY'86 assistance agreement negotiated after the
issuance of this policy will be expected to conform to
all of its provisions.
*
Assistance agreements for PY'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.
PY'86 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 PY'87 will be negotiated
and managed according to this policy.
PRIORITIES
3. Why should EPA assistance support some State priorities
in addition to national priorities?
•State priorities* refer to activities which are allow-
able for funding under federal statutes and which, although
not always important enough nationwide to warrant a place
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on OK1 at the top of the national priority list, are of
great concern to a particular Statt due to that State's
unique environmental conditions. Recognizing that each of
EPA's continuing environmental programs requires a combination
of Federal and State resources, EPA may direct some of its
assistance to support what States view as 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 State may wish to distribute resources
among those activities with a slightly different emphasis.
The Regions have flexibility under this policy to negotiate
support for those activities, consistent with Program
Guidance.
4. How is the proper oalance between national and State
priorities to be achieved?
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. After ensuring that top national priorities 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
5. How should the Agency Operating Guidance- be refined to
facilitate improved work planning?
EPA's annual Operating Guidance should clearly arti-
culate national priorities. The Agency Priority list should
be limited to those top priorities across all media. Bach
Prograa 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 measureable output commitments.
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ESCALATION
6. What if 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 commitments 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 rtctivt the
prompt attention of managers capable of solving those problems
expeditiouily. 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
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 cr.-
cumber with formality, resolution of the most serious problems
likely to be encountered in an assistance relationship. While
this escalation sequence applies uniquely to decisions regardin
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 DISBURSEMENTS
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 Force agreed that putting States on quarterly or
semi-annual disbursement schedules makes it difficult for
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States to plan their programs, which are generally based on
a yearly cycle. The Task Force felt that this type of action
would signify a lack of faith in a State's ability to perform.
Consequently, the Task Force viewed this type of action as a
sanction which would reflect a State's inability to perform.
As with other sanctions, quarterly disbursement schedules,
should not be imposed before attempting to resolve 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. Urder the policy, putting a State
on this type of schedule is considered to be a sanction.
9. Does this policy affect draw-downs under the letter of credit*11
or other payment mechanisms?
The customary mechanisms for the release of funds are
not affected by this policy. For example, letter off 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 crMit or other payment mechanism*, 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. This policy
does not prohibit the practice of imposing a quarterly schedule
on a Stats, but it does consider this practice a sanction.
It is not necessary to amend FY'85 or FY'86 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 quarterly
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 program*tic differences call for Regional managers to
use their best judgment in making such decisions.
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11. What does this policy imply for withholding funds for
problems that are not directly related to a State's perfor-
mance of negotiated outputs under the assistance agreement?
This policy relates primarily to a State's performance
of negotiated outputs under an assistance agreement. The
decision to withhold funds from a State for output-related
problems is a sanction which should be preceded by appropriate
corrective actions and notification of high-level managers.
However, funds are sometimes withheld for problems not directly
related to a State's accomplishment of negotiated outputs
under an assistance agreement. This may occur as a result
of problems with a State's financial reporting and accounting
system. For problems resulting from improper fiscal manage-
ment or administrative practice (but not directly related to
a State's performance on work outputs), the Regions may *^th-
hold funds in Accordance with governing regulations.
OTHER QUESTIONS AND ANSWERS
12. Do assistance administration procedures need to be changed?
No. The policy was developed carefully so as not to
conflict with the Agency's existing procedures for managing
assistance agreements. Procedural details for administration
are provided in the current (12/3/84) Assistance Administration
Manual and they are consistent with the policy.
13. Why does the policy encourage the submission of comprehensive
State work plans but not require them?
The current policy is consistent with existing regulations
foir State and Local Assistance (40 CPR Part 35, Subpart A).
Tho policy encourages but does not require States to volunteer
a comprehensive work program that indicates all activities
the State is conducting under its environmental program.
14. Why does this policy call for a mutually acceptable evaluation
plan?
The policy calls for EPA's evaluation of State performance
to be described in a plan that is mutually acceptable to EPA
and the State before the assistance agreement is finalised!,
This is consistent with the regulation which calls for the
Regional Administrator to develop an evaluation plan in consul-
tation with the State, and it reflects the principles of EPA's
Policy on Oversight of Delegated Programs. Under the policy,
changes to the original evaluation plan could occur as corr-
ective actions.
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15. How can the assistance agreement be amended?
Both the policy and the regulation allow for the assist-
ance agreement to be amended at any time 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 dtvist corrective action
strategies and determine the timing and sequence of
corrective actions?
Yes. Regions should attempt to implement corrective
action strategies which respond to the problem in a timely
and appropriate manner.
i .
17. why doesn't the policy deal with the 'quality' of outputs?
While this Policy on Performance-Based Assistance
focuses on State performance against measureable outputs,
it complements and is in complete conformance with EPA'a
Policy on Oversight of Delegated Programs, which calls for
review and evaluation activities which ensure quality
State programs. Most of ERA'S programs have instituted
evaluation programs which examine not only 'beans,* but (,
the quality of those beans..- The oversight of work program
outputs should occur *s part of a pomprehensive examination
of State program performance.
18. How
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APPENDIX M
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APPENDIX M
USE OF DISADVANTAGED BUSINESS
ENTERPRISES (DBE)
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
JAN 1 5 1992
office
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
FEB 1 5 1991
OFFICE OF
THE ADMINISTRATOR
MEMORANDUM
SUBJECT: FY-91 Program for Utilization of Disadvantaged Business Enterprises
in Procurement Under Assistance Programs
FROM: F. Henry Habicht, III
Deputy Administrator \
TO: Assistant Administrators
General Counsel
Inspector General
Associate Administrators
Regional Administrators
Staff Office Directors
Laboratory Directors
On November 5, 1990, President Bush signed into law, 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 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 (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 cny new procurement und^r FY-91 grant ancndments which involve
the use of additional Agency funds.
Pr\n»d at Rtcycltd Faptr
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- 2 -
The enactment of this 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 now conduct both. An example of such activity will include those
recipients who heretofore came under the authority of OMB Circular A-110.
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 in the attachment are effective as of
October 1, 1990.
I am positive that each of you will join me in making a firm commitment
to enhance the utilization of disadvantaged 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 (OSDBU)
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
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, L2432 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)
' 7air Share" policy "^r utilization of small, minority and women-owned ci-
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-91
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 minimum objective of 8X 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 8% "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 subject I
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 (HBCL's) as part of the definition of DBEs. Therefore, EPA
will require that all 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 wastewater 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 (15 U.S.C 637(a) (5) and (6),
including historically black colleges and universities.
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. .
The Administrative Provisions of the EPA's FY-91 Appropriations Act,
P.L. 101-507, is the Agency's statutory authority for its "Fair Sftare" 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 8% 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 supplies, construction,, equipment and services under EPA grants,
cooperative agreements or loans awarded in F-Y-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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_ •> _
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. Disadvantaged 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-
vantnged individuals whr^e ability to compete 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, che 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 percentage
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 (HBCUs). The HBCUs
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 to
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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 8% 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 FY-91 contain a requirement for a minimum goal of
8% for DBEs. In order to accomplish this goal, States will have to look more
closely at their overall spending with respect to extramural funds and to place
greater emphasis on projects where the chances to exceed the minimum can be ex-
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 minimum 8% goal for DBEs.
B. Implementation. With the passage of P.L. 101-507, the following
implementation activities are now required:
1. Program. Each program will need to immediately examine
its FY-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 coudition establishing a minimum goal of 8% 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 oelow.
Programs which primarily place work with institutions of higher
education can achieve their 82 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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2. Contracts. Procurement actions which originate from the recipient
must include an objective of at least 8% of the Federal share of the value of
contracts and subcontracts be placed with DBEs.
3. State Grants, Cooperative Agreements and Loans. States receiving
grants, cooperative agreements or loans must include as a minimum an objective
of B% of all extramural funds will be placed with DBEs.
4. Local Level Grants, Cooperative Agreements, and Loans. Local units
of governments receiving grants, cooperative agreements and loans to local re-
cipients must include as a minimum objective that 8% of all extramural funds
will be placed with DBEs.
5. Research and Development Programs. All universities, colleges,
hospitals and other non-profit organizations receiving R&D funds or any other
Agency funds will have a minimum objective of 8% for DBEs, including HBCUs, in
the award of prime and subcontracts. (Except for research awards under the
Clean Air Act).
6. "Fair Sh- -•" Objectives. The Award Official or his designee will
negotiate a "Fair Share objective with the recipient. "Fair Share" objectives
should be negotiated to a level that is achievable; however, the floor of
any objective shall be at least 8%. On programs which have Statewide application,
e.g., SRF or Superfund, the recipient may apply the "Fair Share" objective on a
Statewide basis. This provides the State some flexibility in the "Fair Share"
objective of each grant; in some cases, especially in areas having few qualified
DBEs available to perform the work, the State may elect to set a lower target
for participation; however, in areas having a substantial number of qualified
DBEs available a greater target for participation would be required in order
for the the State to meet an overall minimum 8% goal objective. The Agency
strongly encourages maintenance of effort provisions where previous "Fair
Share" accomplishments have exceeded the statutory level.
7. Bidding Requirements. States and/or recipients are required to
include in their bid documents the negotiated "Fair Share" objectives separated
into two categories, i.e., MBEs, (including HBCUs) and WBEs. Additionally,
prime contractors are to include in their bid documents the recipient's "Fair
Share" objectives.
8. To comply.with this policy, recipients of assistance awards and
their prime contractors must comply with the following affirmative steps before
a contract is awarded:
a. placing DBEs on solicitation lists;
b. making sure that DBEs are solicited whenever they are potential
sources;
c. dividing total requirements, when economically feasible, into
small tasks or quantities to permit maximum participation by DBEs;
d. establishing delivery schedules, where the requirements of work
will permit, which would encourage participation by DBEs;
e. using the services of the Small Business Administration and the
Minority Business Development Agency of the U.S. Department of Commerce,
as appropriate; and
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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 8%, and must 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, §31.36(e), §35.6580(a) and §35.3145(d)] must be fully documented and
retained in the official files.
C. Agreement Conditions. All EPA grants, cooperative agreements and loans,
mad?, in FY-91 must contain a condition requiring recipients to meet the require-
ments of the Act. Citacion of the 'Fair Share" objectives for MBEs (inc^. —^ng
HBCUs) and WBEs must be inserted as well as the total "Fair Share" objective in
the condition. These conditions are retroactive to October 1, 1990. SRF condi-
tions are cited in c. and d- below:
1. "Fair Share" Conditions.
a. If the Award Official or his designee HAS NEGOTIATED a "Fair Shat
with the recipient, use the following condition or equivalent. The "Fair Share"
must be at least 8Z.
"The recipient must ensure to the fullest .extent possible that at
least (insert the negotiated "Fair Share" percentages) of Federal
funds for prime contracts or subcontracts for supplies, construc-
tion, equipment or services are made available to organizations
owned or controlled by socially and economically disadvantaged indi-
viduals, 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"
percentage.
To evaluate compliance with the "Fair Share" policy, the recipient
also agrees to comply with the six affirmative steps stated in 40
CFR §33.240, §31.36(e) or §35.680(a), as appropriate."
b. If the Award Official or his Designee HAS NOT NEGOTIATED a "Fair
Share" with the recipient, use the following condition or equivalent. The "Fair
Share" must be at least 8%:
"The recipient agrees to negotiate a "Fair Share" percentage of not
less than 8% with EPA before the recipient begins the process to
award any contracts under this agreement.
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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 disadvantaged 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 40
CFR §33.240, §31.36(e) or §35.6580(a), as appropriate."
c. If the Award Official or his designee 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 8%;
"The recipiu^,. must ensure j the fullest extent possible that at
least (insert the negotiated "Fair Share" percentages) of equivalency
funds for prime contracts or subcontracts for supplies, construction,
equipment or services are made available by the State and/or SRF
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 achieve,
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 designee HAS NOT NEGOTIATED a "Fair
Share" with the recipient for Capitalization grants use the following condition or
equivalent. The "Fair Share" for these grants must 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 SRF assistance
recipient to organizations owned or controlled by socially and economi-
cally disadvantaged individuals, women and historically black collets
and universities. "
The recipient agrees to select certain equivalency projects to achieve
to the fullest extent possible, the State's "Fair Share" objective and
to require those selected equivalency projects to comply with the six
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- 8 -
affirmative steps. The recipient agrees to require (and to assure
that the selected assistance recipients also require) that all prim*
contractors include in their bid documents for subcontracts the
(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 (except Institutions of Higher
Education and Other Non-Profits) and Loan Recipients:
"The State and/or recipient agrees to submit a SF-334 "MBE/WBE
Utilization Under Federal Grants, Cooperative Agreements, and other
Federal Financial Assistance", to the EPA award official beginning
with 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 "MBE/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/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 riscal 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 designee will negotiate a "Fair Share" objec-
tive for each program. The negotiated "Fair Share" objective will 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 that the Statj or recipient Is 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. GMOs 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 case 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 Co report are now required to report in order for the Agency
to determine if it has met the 8% 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 FDA-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
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APPENDIX N
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APPENDIX N
POLICY ON THE TIMELY AWARD OF
ASSISTANCE FUNDS FOR CONTINUING
ENVIRONMENTAL PROGRAMS
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SEP 14 1592
MEMORANDUM
SUBJECT: Policy on the Timely Award of Assistance Funds
for Continuing Environmental Programs
Original signed by Harvey Plppen, Jr.
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, ASWIPCA
Marian Cody, HQ, (PM-216F)
Corinne Allison, HQ, (PM-216F)
bcc: Official R. Johnson B. Feldraan
Reading Grants Management Offices - Regions I-X
Division GPPB Staff GAD Branch Chiefs
PM-216F:RJohnson:RAJ:260-5296:FC 801:Disk - RJ:MEMO2.FNL
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TIMELY AWARD OF ASSISTANCE FUNDS
FOR CONTINUING ENVIRONMENTAL PROGRAMS
PART I: PURPOSE
PART II: POLICY
PART III: BACKGROUND
PART IV: ROLES AND RESPONSIBILITIES
PART V: Appendices
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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. GMO 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
1. 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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Appendix 1
UNITED STATES FNVIRONMENTAL PROTECTION AGENCY
\ ^|^ * WASHINGTON, O.C. 204M
\TT^
JUN2S1992
CfFCeOF
AOMMSTRATON
ANDKtOMCa
MEMORANDUM
SUBJECT: A1
FROM:
(PM-225)
TO: Assistant Regional Administrators
Senior Budget Officers
This memo is intended to clarify some of the geaenl policies and ooooepts dot
govern funds availability and flexibility in the Agency Wind a fiscal year begins. Hie
"financial environment" has been rapidly changing over the-last tew years both hukfe
EPA as well as government-wide. These changes have 'raised questions aa to the
fundamental core responsibilities of the Agency's management of our financial resources.
These issues are extremely complex and highly variable, requiring aa undemanding of
the inter-relationship of four core funding documents. This memo provide! an overview
of the fiinHam^ntu] core responsibilities. The Budget Division is cnmntiy in the. process
of updating the Planning and Budget Manual and the' Fund* Control Manual which wffl
incorporate the more detailed guidance. As part of this process, I would welcome
comments and suggestions for additional clarifications, as needed
Background
Several recent events have focused our attention on how the division is
communicating resource decisions and providing information cononraing the reieaae of
funds to the Agency. First, many new and complex laws have been enacted that affect
the Agency's funds. These include the Budget Enforcement Act of 1990,71ft» Chief
Financial Officer Act of 1990, Federal Credit Reform Act of 1990 and the Cash
Management Improvement Act of 1990. Second, we have impiMMntftl tfm Mnttki
Financial Management System (IFMS) within the last few yean which hit bad >
significant impact on the flow of information concerning financial leaources and added
new responsibilities for the Responsible Planning and Implementation Officers (KPIOa).
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Third, a quality action team was convened by the Office of Wastewater Enforcement
and Compliance for the purpose of addressing State concerns on the grants process.
And fir illy, we recognize that there has been significant turnover in the Agency's
resource community, resulting in many new employees new to the budget world.
Tt has come to our attention that there are many unanswered questions 03 fund
availability and flexibility. In particular, it is clear that there has been some confusion
about when funds become available for obligation and how much flexibility the Agency
has in making resource management decisions. I would like to take advantage of these
circumstances and take a first step in providing some clarification on the general
concepts, controls, and procedures which make funds available for obligation.
Availability of Funds
At any time, the funds available to the Agency is governed by four bask
documents: (1) the Congressional Budget Justification; (2) the Appropriation LAW under
which the Agency is funded; (3) the OMB Apportionment; and (4) die Agency's
approved financial Operating Plan. In general, each document governs a different aspect
of the Agency's cash flow and flexibility.
(1) Confrwkraal Budget Justification provides Congress and the Admlnlmaion with
the Agency's basic blueprint on where we are spending our money, what ttafti
we expect to achieve, and our accomplishments for the previous two fiscal years.
Since OMB and Congress consider this document to be the basis of our buffet,
deviation from it usually require* action, by either Contfpi and/or OMB.
(2) Appropriations Law provides the Agency with the basic requirements eefahtishfd
by Congress. It includes the total level of funds available within each •financial
account and specific guidance to the Agency through specific appropriations
language, report language, and other legislative history. The law enacts the
underlying structure of our appropriations accounts and Congressional Budget
Justification wtth modifications spelled out in the legislative history. Hie Law
provides both restrictions (account transfers; Travel ceilings; PCAB floors) and
flexibility (reprogramming authority; appropriation charging).
(3) OMB Apportionment control the rate at which obligations can be made by the
Agency and in some instance the exact purpose for the obligations. UsnaOy,
OMB apportions the Agency's funds by quarter. Then are, however, other cases
where OMB limits the use of funds either through a set aside (in a "njftjuiji B")
or through footnotes to the apportionment. One recent use of these insfrktlona
has been OMB's establishment of a clean-up category in the Soperfend
apportionment.
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(4) Approved Financial Operating Plan implements the Congressional Budget
Justification, Appropriations Law, and OMB Apportionment. The
Operating Plan essentially governs the purposes for which the Agency
CApends 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 established several
institutional methods of communication that provide guidance as to the availability of
resources to the Agency's managers. The are: (1) Advice of Allowance for each
appropriation to each Responsible Planning and Implementation Officer (RPIO); (2) an
online financial Operating Plan contained in the Integrated Financial Management
System (IFMS); and (3) the Appropriations Analysis, Bills and Reports digest* ^
These sources of information establish spending limits at a detailed level to
ensure compliance with appropriated amounts, directives, and guidance (including add*
ons and reductions) as well as OMB apportionment restrictions. The use and
applicability of each guidance source is dependent upon the status of the Agency's
appropriations and Operating Plan,
Appropriations
At the beginning of the fiscal year, the Appropriations -Law governing die Agency
will take one of two forms: either an annual Appropriations Bffl covering the raH year
or a Continuing Resolution that covers a shorter period of time. (If the Agency baa no
Appropriations Law, the Agency must "shut-down" operations which is addressed by EPA
Order on Actions in the Event of an Appropriations and/or Debt Cefling Hiatus). The
status of the Agency's appropriations significantly affects the level of funds available to
the Agency and the amount of flexibility with which foe Agency can operate. The
following lays out general principles for the availability of funds under each
appropriation scenario and attempts to illustrate the interrelationship between the
controlling documents listed above.
One special note, however, is that the specific rule* and conditions under which
the Agency operates can vary significantly from year to year. Congress and OMB
generally provide us with a complex set of rules that can be modified yearly, quarterly,
or monthly. The resource community should stay in 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.
-------
Avaiiabilirv of Funds Unfor an Annual Appropriation
The budget statutes that govern the federal budget process provide that the
Agency begins its fiscal year on October 1 with an enacted Appropriations Bill. Once
the Appropriations Bill is signed by the President, EPA has 30 days to provide an
enacted Operating Plan to the Office of Management and Budget (OMB) and 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 enactment of the annual Appropriations bill, the Comptroller transmits the
Appropriations Analysis, Bill and Report digest to each RPIO. This digest is an analysis
of the Appropriations bill, its legislative history, and hi requirements. This transmittal.
represents a formal delegation from the Comptroller to the BPIOf of the program
responsibilities contained in our Appropriations Law and iti legislative history.
During the interim period prior to approval of the enacted Openting Plan, the
Operating Plan based on the President's request (Phase EU) is loaded in the IFMS. A
guidance memo based on initial temporary estimates included in OMB •jyottkninfnti is
issued to the RPIO* on how to proceed until the Agency has IB approved <\f»«*¥g
Plan. We try to provide the maximum amount of funding to allow normal Agency
operations. However, RPIC* are advised that the Openting Plan in IFMS his not been
adjusted to reflect Congressional actions or the final Administrator distribution of
resources. Therefore, Agency managers must &e prudent and careful in •""•iHt their
1st quarter resources that have been made available in the event Oat the modifications
reduce the amounts available.
Once the Openting Plan has been approved, the RPIO is notified through the
normal Advice of Allowance letter. This letter sets .out the funding available to the
allowance holders for that quarter as well as provides guidance on the MrninHoni and
flexibilities on the use of funds (ceilings, floors, reprogramming requirements),
o er a Continuing
In recent yean, our annual Appropriations Bill has not been enacted by die atart
of the fiscal year. In this situation, the Agency begins the fiscal year under a fonthnring
Resolution (CR). During this time, the RPIOs are provided' general guidance
memoranda from the Comptroller Budget Division on the rules governing Agency
operations until we have a full year Appropriationt Law and die resulting enacted
Operating Plan. These rales include, but are not limited to, the use of foada tor the
purposes for which they were requested in the Congressional Budget Jnsdficaflttn, H toett
as the restraints included in the Continuing Resolution, as written by Congress, and
OMB's Apportionment of the Continuing Resolution funds.
-------
5
Generally, CRs hold the Agency to a more restrictive level than 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 CR, however, rarely provides enough
funds to cover "normal" operations. While operating under a CR, each RFIO is provided
a portion of their total appropriation to obligate. Because of the allotment process that
we have ?greed to with OMB, the Agency maintains significant flexibility. Therefore,
monitoring and lockout of fuads during this time are done at the highest possible level
for each Allowance Holder. Maximum flexibility by program element and object class is
permitted.
Funding Flexibility
During the execution phase of the budget, the Agency must take ore to adhere to
the limits and constraints of its four governing documents. Within the limits, however,
the Agency maintains considerable flexibility in the use of funds. Some of me fleadbffity .
is laid out in the Agency's Appropriation Law. For example, the Agency is allowed to
reprogram funds up to a certain level ($500,000 for FY 1992) between programs in the
operating plan.
Another example of flexibility is in the quarterly apportionments by OMB.
During the development of the Operating Plan, the "rt*cipntH qnarteriy spttta an
equally applied to every program element in the appropriation. These
quarterly splits to resources may be adjusted, however, fo obtain dedred
as long as the quarterly split at the RFIO level for that appropriation is
•*•
Flexibility is, therefore, within the limits Mrahlishnd in the justification,
Appropriations Law, and the OMB Apportionment The •**«•***"• and variables are ftr
to numerous and complex to set out specific guidance in this memo. The f^fffJynf** to .
this memo gives one specific case example .of flexibility within our limitations. Within
these limitations, the Agency doe* maintain a significant amount of flexibility in fundmf.
Closing
I hope this information clarifies some of the confusion on these issues. In addition, I
would like your input, comments and questions regarding the type of specific girirtanro
you believe would be helpful to you in managing the Agency's resources. Please direct
your comments and inquiries to Delia Scott, Chief, Formulation and Control Bonch, at
260-1176 or Becky Fredericks, Chief, Management and Policy Staff, at 260-2470.
Attachment
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ATTACHMENT
CASE EXAMPLE
The Agency begins the year on a Continuing Resolution (CR) for 30 days which
provides us with an automatic apportionment for 30/365ths or approximately 8% of each
of our appropriations based on the levels of the year just ended.
The status of our Appropriation's Bill is still delayed in Congress or the White
House and we cannot yet operate at the levels expected for the current year or use the
Phase IH Operating Plan (OPLAN) which is awaiting action to incorporate
Congressional add-ons and reductions following enactment.
How do Agency managers operate under this scenario?
In terms of the four funding documents needed, we htvt two at this point..a
limited Appropriations Bill (CR) and the (automatic CR) apportionment. The fan-year
Appropriations Bill based on the Congressional Budget Justification, and the Operating
Flan, are still pending. Funds are now available, however, aa is guidance and flexibility.
The Comptroller/Budget Division issues a aeries of status and guidance
memoranda (or EMAIL) providing aa much specific ^formation and genual funding
guidance as is available to EPA. Among other features, mis guidance ilyjyj. stresses:
1. Caution and prudent management
2. Availability of funds (CR percentage) at the Appropxiatioa/AUowance Bolder
total level for each RPIO/Region. Allowance Holders are not held to lower
program element/object class level during a CR.
So, even under the most restrictive (CR) circumstances, m
being provided within the total pool of resources available for the
fund the highest priorities based on their own determfiutiocu "If SAB
or an AC&C grant to a particular State is the highest priority, then the oppoi&fifty for
obligation is in place.
END OF THE CR - As soon as the CR is ended (usually during the first quarter) by the
enactment of EPA's Appropriations Bill and signature by the President, the full year
Phase m Operating plan is loaded into IFMS and guidance to obligate omrinuriy whfle
Congressional add-ons and reductions are implemented is issued.
-------
Now that a full year's appropriation is enacted, the budget planning process, if
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 that we have this flexibility.
Appropriations such as Construction Grants, Lust, AC&C and R&D are
disptiportionately "front loaded" in the 1st quarter apportionment to allow Program
oiJices to fund Priorities (such as grants i.1 the 1st quarter should they choose to do S
during the phases of Operating Plan development.
CONCLUSION
In terms of proper budget planning, the following steps by the Program Offices
will allow for priority items to be funded in the first quarter:
A. ftftgjp.p»i fllrtributiQM of the Pres. Budget resource* have been made by the
National Program Manager and incorporated into the OPLAN.
B. Priority items (such as grants) have all been budgeted in die 1st quarter
OPLAN by the RPIO during Phase m.
c: RPIO* begin the obligating paperwork for me priority hems as soon as die
year begins so it is ready to go as soon as sufficient rands are.
D. Commitments are entered promptly as won as die Appropriation! BUI if
signed and IFMS is open.
E. Obligating documents are promptly forwarded to Oftnts Offices, Contacts
Offices, etc. for obligation,
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APPENDIX O
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APPENDIX 0
STATE GRANT GUIDANCE, "INTEGRATION
OF POLLUTION PREVENTION"
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11/18/92 11:54 ©202 252 0516
OCLA/OLA DIV
•*--» EPA/GAD
(2)002
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
NOV I 2 1932
OFFICE OF
THE ADMINISTRATOR
MEMORANDUM
state Grants tiuiaance: integration or Pollution
Prevention
F. Henry Habicht I AJ#
Deputy Administrator
Assistant Administrators
Regiona.7 Administrators
SUBJECT:
JTKOH:
TO:
Attached is the new Agency-wide Guidance
pollution prevention into EPA'e media grant programs, beginning
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.
I want to thank all those who labored so effectively to
d«v«lop this Guidance. The document reflects the many
constructive comments provided by Agency headquarters, Reqional
Offices, and State governments. In response to those comments
the final product is shorter, tighter, and IRSS pT-p.strriptnve, in
tone.
With this Guidance in hand, the Agency r-*r< now move* rjuiclcly
to develop specific Guidance documents for our individual media.
grant programs in concert with our State partners.
Attachment
Printed on Pecyclod Paper
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11/18/92 11:54 O202 252 0516 OCLA'OLA DIV -— EPA/GAD ®003
I KM£r s UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
KO&
WASHINGTON, D.C. 20460
NOV I 2 1892
MEMORANDUM THE ADMINISTRATOR
SUBJECT: State Grants Guidance: Integration of Pollution
Prevention
FROK: F. Henry Habicht
Deputy Administrator
TO: Assistant
Regional Administrator-
This memorandum announces the Agency-wide pollution ,
prevention Guidance, beginning with the FY'94 State grantjs cycle.
It has four goals:
• Promoting pollution prevention in State programs
supported through Federal grants by establishing
National Principles to guide workplans negotiated
between Regional Offices and States;
• Ensuring that grant requirements as interpreted by
EPA/ State workplans are flexible enough to support
innovative State pollution prevention activities;
• Establishing a sijnple 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 with 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
the Agency's activities as required by the Pollution Prevention
Act of 1990. By emphasizing flexibility, the Guidance
complements other Agency efforts to build a productive
environmental management system in partnership with the States,
and improve coordination with existing State pollution prevention
programs .
Printed on
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11/18/92 11:55 ®202 252 0516 OCLA/OLA DIV -.-.- EPA/GAD 14)004
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 Act §3011—Hazardous
Waste; Federal Insecticide. Fungicide, and Rodenticide Act
§23(a)(1)—Pesticides; Toxic Substances Control Act §28—:
Enforcement and Enforcement Activities under §313 of the
Emergency Planning and Community Right-to-Know Act; and Clean
Water Act §106—Surface Water, §104(b)(3)—Wetlands and Water
Quality Management, and §319(h)—Non-Point Source Management.
Building on the Agency's many successful pollutionj
prevention efforts, beginning in FY'94 EPA's grant programs—
working with States—should explicitly promote pollution
prevention in State workplans (also called agreements). This
memorandum will be incorporated into the annual Agency Operating
Guidance as well as program-specific Guidance ceveloped this
winter with the advice of the State/EPA Operations Committee.
Program Guidance, intended to tailor the Agency-wide commitment
to each grant program, will be applied by Regional Offices and
States in the development of grant-assisted work.
The National Principles stated below should help guide
development of EPA/State workplans. These should be reflected in
program-specific Guidance, weighed in vorkplan discussions, and
used to qualitatively assess program progress in integrating
pollution prevention. In 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
workplans and initiatives.
National Principles
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 EPA's
preferred approach to environmental management where technically
and economically feasible. Consistent with the Pollution;
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 to ensure
that it is considered fairly in EPA/State workplans.
Specific proposals from States that are consistent with.
these Principles should be considered good candidates forj 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
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11/18/92 11:55 S202 252 0516 OCLA/OLA DIV ~-» EPA/GAD 1^005
discretion in applying these Principles; they are not obligatory
elements of every negotiated workplan, but rather factors for
serious consideration in the negotiation process. ;
The Principles are:
1) The workplan applies the EPA definition of pollution |
prevention (see memorandum of May 28, 1992) consistent with the
Pollution Prevention Act of 1990 and the 1991 EPA Pollution
Prevention Strategy. '••
2) The workplan reflects an explicit preference for pollution
prevention and identifies pollution prevention activities,
products, or approaches. i
i
3) The workplan 'ncornorates pollution prevention as a priority
in environmental management decisions made by the grantee| as part
of the grant-assisted activities. i
4) The workplan encourages opportunities to modify existing or
to develop new eguipment, 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. j
6} The workplan complements or builds upon existing EPA |
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 j
programs. Workplans also should encourage innovative approaches
already developed by other State or local programs, and improve
coordination to build on existing successes. I
9) The workplan structures grant output information so -that EPA
can make pollution prevention data and experience available to
other States and the Pollution Prevention Information
Clearinghouse.
Clearly, both partners must comply with any applicable statutory
or regulatory regjuirements and ta?e into account other factors
that may be important. Regional Offices and States may identify
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11/18/92 11:56 ©202 25.2 0516 OCLA/OLA DIV -.-.-* EPA/GAD 1^)006
4
additional Principles to guide workplan requirements.
Flexibility
Many Regional Offices already have made adjustments to
accojamodate 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 parties' needs. Options for
flexibility include (but are not limited to):
a) Adjustments in numbers or types of required outputs
including, for --xample, (l) tradeoffs or disinvestment from
traditional requirements (non-statutory and non-regulatory)
and (2) multiple credit for a single "multi-media"
inspection that emphasizes pollution prevention.
—An example of (1) is RCRA's RIP-Flex Guidance, wnich
allows disinvestment from national priority activities and
re-investment in Regional or State priorities: up to J25% of
enforcement resources in IT'92 and '93.
—An example of (2) is being tested in Region One with
Massachusetts' Blackstone project. The key issue is jhow to
"bean-count" a single multi-media inspection claiming to
satisfy enforcement requirements under multiple statutes and
promote pollution prevention technical assistance.
b) Adjustments in timing of non-statutory and non-
regulatory EPA deadlines.
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 years)
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.
Annual Accomplishment Report
To allow EPA to evaluate progress in integrating pollution
prevention into State grant programs, each Regional Office' should
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H/18/92 11:56 ®202 252 0516 OCLA/OLA DIY —EPA/GAD ©007
provide an annual report summarizing pollution prevention
accomplishments (e.g. activities, products, approaches, e|tc.)/
reflected in grants-assisted work. The report may take any form
and may draw upon reports developed to satisfy other
requirements.
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, |
administrative, or other changes to improve flexibility would be
helpful. Your contribution of this information is key to| making
pollution prevention a reality in EPA's on-going bread and butter
work.
Conclusion
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.
Attachment
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APPENDIX?
-------
APPENDIX P
SF 424, "APPLICATION FORM
ii
-------
OMB Approval No. 0348-0043
APPLICATION FOR 2- OATE SUBMITTED Applicant identifier
FEDERAL ASSISTANCE
1. TYPE OF SUBMISSION: 3. DATE RECEIVED BY STATE Stale Application identifier
Application Pre-application
LJ ^instruction [J Consirudion } DATE RECEIVED BY FEDERAL AGENCY Federal identifier
Q Non-Construction Q Non-Construction
5. APPLICANT INFORMATION
Legal Name:
Address (give city, county, state, and zip code):
6. EMPLOYER IDENTIFICATION NUMBER (EIN):
—
a TYPE OF APPLICATION
1 | New LJ Continuation |_J Revision
II Revision, enter appropnc-te le!ter(s) in box(es): | |
A. Increase Award B. Decrease Award C. Increase Duration
D. Decrease Duration D. Other (specify):
10. CATALOG OF FEDERAL DOMESTIC _
ASSISTANCE NUMBER:
TITLE:
12. AREAS AFFECTED BY PROJECT (cities, counties, stales, etc.):
Organizational Unit:
Name and telephone number of the person to be contacted on matters involving
this application (give area code)
7. TYPE OF APPLICANT: (enter appropriate letter in box) | |
A. State H. Independent School Disi.
B. County 1. State Controlled Institution of Higher Learning
C. Municpal J. Private University
D. Township K. Indian Tribe
E. Interstate L. Individual
F. Intermunicipal M. Profit Organization
G. Special District N. Other (Specify):
9. NAME OF FEDERAL AGENCY
11. DESCRIPTIVE TITLE OF APPLICANTS PROJECT:
13. PROPOSED PROJECT: 14. CONGRESSIONAL DISTRICTS OF:
Stan Date Ending Date a. Applicant b. Project
15. ESTIMATED FUNDING: 16. IS APPLICANT SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS?
a. Federal $ .00
a. YES. THIS PREAPPLICATION/APPLICATION WAS MADE AVAILABLE TO THE
STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON:
b. Applicant $ .00
DA
c. State $ .00 |—
b. NO. 1
d. Local $ .00 _
e. Other $ .00
FE:
] PROGRAM IS NOT COVERED BY E.O. 12372
J OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW
f Program Income $ 00 17. IS APPLICANT DELINQUENT ON ANY FEDERAL DEBT?
g. TOTAL $ .00 1 1 Yes If "Yes." attach an explanation. I 1
No
18. TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL DATA IN THIS APPUCATION/PREAPPUCATION ARE TRUE AND CORRECT. THE DOCUMENT HAS BEtN DULY
a. Typed Name of Authorized Representative b. Title
d. Signature of Authorized Representative
c. Telephone number
e. Dale Signed
Previous Editions Not Usable
Standard Form 124 (REV 4-1
Prescribed by OMB Circular A-103
-------
INSTRUCTIONS FOR THE SF 424
is a standard form used by applicants as a required facesheet for preapplications and applications submitted
or Federal assistance. It will be used by Federal agencies to obtain applicant certification that States which have
established a review and comment procedure in response to Executive Order 12372 and have selected the program
to be included in their process, have been given an opportunity to review the applicant's submission.
Item: Entrv: Item: Entrv:
1. Self-explanatory.
2. Date application submitted to Federal agency (or
State if applicable) & applicant's control number
(if applicable).
3. State use only (if applicable).
4. If this application is to continue or revise an
existing award, enter present Federal identifier
number. If for a new project, leave blank.
5. Legal name of applicant, name of primary
organizational unit which will undertake the
assistance activity, complete address of the
applicant, and name and telephone number of the
person to contact on matters related to this
application.
6. Enter Employer Identification Number (EIN) as
assigned by the Internal Revenue Service.
7. Enter the appropriate letter in the space
provided.
8. Check appropriate box and enter appropriate
letteHs) in the space{s) provided:
— "New" means a new assistance award.
— "Continuation" means an extension for an
additional funding/budget period for a project
with a projected completion date.
— "Revision" means any change in the Federal
Government's financial obligation or
contingent liability from an existing
obligation.
9. Name of Federal agency from which assistance is
being requested with this application.
10. Use the Catalog of Federal Domestic Assistance
number and title of the program under which
assistance is requested.
11. Enter a brief descriptive title of the project, if
more than one program is involved, you should
append an explanation on a separate sheet. If
appropriate (e.g., construction or real property
projects), attach a map showing project location.
For preapplications, use a separate sheet to
provide a summary description of this project.
12. List only the largest political entities affected
(e.g., State, counties, cities)
13. Self-explanatory.
14. List the applicant's Congressional District and
any District(s) affected by the program or project. •
15. Amount requested or to be contributed during
the first funding/budget period by each
contributor. Value of in-kind contributions
should be included on appropriate lines as
applicable. If the action will result in a dollar
change to an existing award, indicate only the
amount of the change. For decreases, enclose the
amounts in parentheses. If both basic and
supplemental amounts are included, show
breakdown on an attached sheet. For multiple
program funding, use totals and show breakdown
using same categories as item 15.
16. Applicants should contact the State Single Point
of Contact (SPOC) for Federal Executive Order
12372 to determine whether the application is
subject to the State intergovernmental review
process.
17. This question applies to the applicant organi-
zation, not the person who signs as the
authorized representative. Categories of debt
include delinquent audit disallowances, loans
and taxes.
18. To be signed by the authorized representative of
the applicant. A copy of the governing body's
authorization for you to sign this application as
official representative must be on file in the
applicant's office. (Certain Federal agencies may
require that this authorization be submitted as
part of the application.)
SF 424 (PEV 4-88) Bac*
-------
OMB Approval No. 0348-0044
BUDGET INFORMATION -- Non-Construction Programs
Grant Program
Function
or Activity
(a)
1.
2.
3.
4.
5. TOTALS
SECTION A -- BUDGET SUMMARY
Catalog of Federal
Domestic Assistance
Number
(b)
Esti.nated Unobligated Funds
Federal
(c)
S
$
Non-Federal
-------
SECTION C -- NON-FEDERAL RESOURCES
(a) Grant Program
8.
9.
10.
11.
12. TOTALS (sum of lines 8 -11)
(b) Applicant
$
$
(c) State
$
$
(d) Other Sources
$
$
(e) TOTALS
$
$
SECTION D - FORECASTED CASH NEEDS
13. Federal
14. Non-Federal
15. TOTAL (sum of lines 13 and 14)
Total for 1st Year
$
$
1st Quarter
$
$
2nd Quarter
$
$
3rd Quarter
$
$
4th Quarter
$
$
SECTION E - BUDGET ESTIMATES OF FEDERAL FUNDS NEEDED FOR BALANCE OF THE PROJECT
(a) Grant Program
16.
17.
18.
19.
20. TOTALS (sum of lines 16-19)
FUTURE FUNDING PERIODS (Years)
(b) First
$
$
(c) Second
$
$
(d) Third
$
$
(e) Fourth
$
$
SECTION F - OTHER BUDGET INFORMATION
(Attach additional Sheets if Necessary)
21. Direct Charges:
22. Indirect Charges:
23. Remarks
Prescribed
Sf \(4-ee) Page;
bp^. .j Circular A-10;
2
A-102
-------
INSTRUCTIONS FOR THE SF-424A
General Instructions
This form is designed so that application can be made
for funds from one or more grant programs. In pre-
paring the budget, adhere to any existing Federal
grantor agency guidelines which prescribe how and
whether budgeted amounts should be separately
shown for different functions or activities within the
program. For some programs, grantor agencies may
require budgets to be separately shown by function or
activity. For other programs, grantor agencies may
require a breakdown by function or activity. Sections
A,B,C, and D should include budget estimates for the
whole project except when applying for assistance
which requires Federal authorization in annual or
other funding period increments. In the latter case,
Sections A,B, C, anft D should provide the budget for
the first budget period (usually a year) and Section E
should present the need for Federal assistance in the
subsequent budget periods. All applications should
contain a. breakdown by the object class categories
shown in Lines a-k of Section B.
Section A. Budget Summary
Lines 1-4, Columns (a) and (b)
For applications pertaining to a single Federal grant
program (Federal Domestic Assistance Catalog
number) and not requiring a functional or activity
breakdown, enter on Line 1 under Column (a) the
catalog program title and the catalog number in
Column (b).
For applications pertaining to a single program
requiring budget amounts by multiple functions or
activities, enter the name of each activity or function
on each line in Column (a), and enter the catalog num-
ber in Column (b). For applications pertaining to mul-
tiple programs where none of the programs require a
breakdown by function or activity, enter the catalog
program title on each line in Column (a) and the
respective catalog number on each line in Column (b).
For applications pertaining to multiple programs
where one or more programs require a breakdown by
function or activity, prepare a separate sheet for each
program requiring the breakdown. Additional sheets
should be used when one form does not provide
adequate space for all breakdown of data required.
However,, when more than one sheet is used, the first
page should provide the summary totals by programs.
Lines 1-4, Columns (c) through (g.)
For new applications, leave Columns (c) and (d) blank.
For each line entry in Columns (a) and (b), enter in
Columns (e), (f), and (g) the appropriate amounts of
funds needed to support the project for the first
funding period (usually a year).
Lines 1-4, Columns (c) through (g.) ( continued)
For continuing grant program applications, submit
these forms before the end of each funding period as
required by the grantor agency. Enter in Columns (c)
and (d) the estimated amounts of funds which will
remain unobligated at the end of the grant funding
period only if the Federal grantor agency instructions
provide for this. Otherwise, leave these columns
blank. Enter in columns (e) and (f) the amounts of
funds needed for the upcoming period. The amount(s)
in Column (g) should be the sum of amounts in
Columns (e) and (f).
For supplemental grants and changes to existing
grants, do not use Columns (c) and (d). Enter in
Column (e) the amount of the increase or decrease of
Federal funds and enter in Column (f) the amount of
the increase or decrease of non-Federal funds. In
Column (g) enter the new total budgeted amount
(Federal and non-Federal) which includes the total
previous authorized budgeted amounts plus or minus,
as appropriate, the amounts shown in Columns (e) and
(f). The amount(s) in Column (g) should not equal the
sum of amounts in Columns (e) and (f).
Line 5 — Show the totals for all columns used.
Section B Budget Categories
In the column headings (1) through (4), enter the titles
of the same programs, functions, and activities shown
on Lines 1-4, Column (a), Section A. When additional
sheets are prepared for Section A, provide similar
column headings on each sheet. For each program,
function or activity, fill in the total requirements for
funds (both Federal and non-Federal) by object class
categories.
Lines 6a-i — Show the totals of Lines 6a to 6h in each
column.
Line 6j - Show the amount of indirect cost.
Line 6k - Enter the total of amounts on Lines 6i and
6j. For all applications for new grants and
continuation grants the total amount in column (5),
Line 6k, should be the same as the total amount shown
in Section A, Column (g), Line 5. For supplemental
grants and changes to grants, the total amount of the
increase or decrease as shown in Columns (l)-(4). Line
6k should be the same as the sum of the amounts in
Section A, Columns (e) and (0 on Line 5.
Sf 424A .4-88)
-------
OM« Appro**! No. 0344-0040
ASSURANCES — NON-CONSTRUCTION PROGRAMS
Note: Certain of these assurances may not be applicable to your project or program. If you have questions,
please contact the awarding agency. Further, certain Federal awarding agencies may require applicants
to certify to additional assurances. If such is the case, you will be notified.
As the duly authorized representative of the applicant I certify that the applicant.
1. Has the legal authority to apply for Federal
assistance, and the institutional, managerial and
financial capability (including funds sufficient to
pay the non-Federal share of project costs) to
ensure proper planning, management and com-
pletion of the project described in this application.
2. Will give the awarding agency, the Comptroller
General of the United States, and if appropriate,
the State, through any authorized representative,
access to and the right to examine all records.
books, papers, or documents related to the award;
and will establish a proper accounting system in
accordance with generally accepted accounting
standards or agency directives.
3. Will establish safeguards to prohibit employees
from using their positions for a purpose that
constitutes or presents the appearance of personal
or organizational conflict of interest, or personal
gain.
4. Will initiate and complete the work within the
applicable time frame after receipt of approval of
the awarding agency.
5 Will comply with the Intergovernmental
Personnel Act of 1970 (42 U.S.C. 1$ 4728-4763)
relating to prescribed standards for merit systems
for programs funded under one of the nineteen
statutes or regulations specified in Appendix A of
OPM's Standards for a Merit System of Personnel
Administration (5 C.F.R. 900, Subpart F).
6. Will comply with all Federal statutes relating to
nondiscrimination. These include but are not
limited to: (a) Title VI of the Civil Rights Act of
1964 (P.L. 88-352) which prohibits discrimination
on the basis of race, color or national origin; (b)
Title IX of the Education Amendments of 1972, as
amended (20 U.S.C. §§ 1681-1683, and 1685-1686),
which prohibits discrimination on the basis of sex;
(c) Section 504 of the Rehabilitation Act of 1973, as
amended (29 U S.C. § 794), which prohibits dis-
crimination on the basis of handicaps: (d) the Age
Discrimination Act of 1975, as amended (42
L'.S.C.§§ 6101-6107), which prohibits discrim-
ination on the basis of age;
9.
(e)the Drug Abuse Office and Treatment Act of
1972 (PL. 92-255), as amended, relating to
nondiscrimination on the basis of drug abuse, (f)
the Comprehensive Alcohol Abuse and Alcoholism
Prevention, Treatment and Rehabilitation Act of
1970 (P.L. 91-616), as amended, relating to
nondiscrimination on the basis of alcohol abuse or
alcoholism; (g) 55 523 and 527 of the Public Health
Service Act of 1912 (42 U.S.C. 290dd-3 and 290 ee-
3), as amended, relating to confidentiality of
alcohol and drug abuse patient records; (h) Title
VIII of the Civil Rights Act of 1968 (42 U S C §
3601 et seq.), as amended, relating to non-
discrimination in the sale, rental or financing of
housing; (i) any other nondiscrimination
provisions in the specific statute(s) under which
application for Federal assistance is being made;
and (j) the requirements of any other
nondiscrimination statute
-------
APPENDIX Q
-------
APPENDIX Q
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:
Part I
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
Part II
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
-------
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)
Part VI
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.
-------
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:
Parti
1) Complete application and ?ny 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) Anti-Lobbying Certification (original signed)
6) Debarment/Suspension Certification (original signed)
Part II
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)
-------
Part IV
1) Correspondence relating to the awards
A. Award letter
B. Acceptance letter
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 related 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
PartV
1) Reimbursement requests
-------
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
-------
APPENDIX R
-------
APPENDIX R
CLOSEOUT POLICY FOR ASSISTANCE
AGREEMENTS
-------
AUG 2 7 1992
MEMORANDUM
SUBJECT: Final Closeout Policy For Assistance Agreements
FROM:
TO:
r • •» -,
Harvey G. Pippen, Jr., Directo£g"e:!
Grants Administration
Assistant Regional Administrators
Grants Management Offices
Regions I-X
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 over the past year. We
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, we ask that you develop your fn specific Regional
(>-i. headquarters) procedures to implement the closeout requirements
in this policy.
If you have any questions regarding this policy, please
contact Bruce Feldman on 260-5268.
Attachment
CC:
Official
Reading
Division
M. Ross
L. Ross
M. Lee
R. Johnson
S. McMoran
C. Allison
R. Mitchell
A. Mason
C. Foushee
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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EPA CLOSEOUT POLICY FOR GRANTS AND
COOPERATIVE AGREEMENTS
Introduction
Part I: Purpose and Objectives
Part 11: Basic Closeout Requirements for Grants and Cooperative Agreements
A. Roles and Responsibilities
B. GICS Requirements
C. Notification and Follow Up
Part III: Program Specific Requirements
A. State Revolving Fund Program
B. Superfund
C. Construction Grants
Part TV: Record Retention Requirements
Part V: Audit Resolution and Disputes
Appendix A: 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 Awards
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2
PART I PURPOSE AND OBJECTIVE
The purpose of this document is to establish EPA policy for closing out completed grants
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 existing
agency closeout policy.
EPA should close out non-construction grant projects within 180 days after receipt
of all required reports and other deliverables. 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 lost 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
• 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
This section outlines the 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 269A)
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.
-------
2. Ensure that any/all deliverables 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
carried 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.
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, inching 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 (IFMS);
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.
-------
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
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 recipie^ for any funds ^ue EPA; establish an accounts
receivable if appropriate and perfoim follow-up collection efforts.
3. Make necessary entries to IFMS for any deobligations and collections.
4. Approve/process final payment request.
B. The Grants Information and Control Systems (GICS) Requirements
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
-------
closeout process. Grant 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 (M5)
REAL-PROPERTY-CODE/DATE (L7)
PERS-PROPERTY-CODE/DATE (L2)
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 Follow Up
1. 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 Not
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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.
2. Follow up Schedule
0-30 Days 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 Davs 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
to the FMO\PO.
120 Days 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 FMO\PO. 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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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 ffl: 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(d)], by performing annual oversight visits of the State's operations [CWA
Tide VI, §606(e)], and by receiving audits of the program [CWA Tide VI, §606(b)]. If,
however, a State is found to be out of compliance with any part of Tide VI or the implementing
regulations, 40 CFR Parts 31 and 35, Subpart K, and corrective action has not been initiated by
the State, a grant cannot be closed out. To close out a capitalization grant, the GMO, in
conjunction witii die Project Officer (die SRF Coordinator) would follow die requirements as
specified in Part n.
B. Superfund
The following are die additional steps each GMO must follow in closing out a Superfund
Cooperative Agreement. Superfund recipients are usually States, Political Subdivisions, or
Federally Recognized Indian Tribes, and die closeout procedures in this section apply to these
'For example, a Region may decide to closeout a capitalization grant before an equivalency
project has met all of its equivalency requirements [Sixteen Tide n requirements CWA, Title
VI §602(b)(6)].
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recipients. Recipients of other Superfund grants, such as; Research and Development; and
Technical Assistance Grants (TAG), follow the closeout 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:
Pre-Remedial 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 time. 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 years 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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For a Superfund site-specific CA, if the CA is terminated when a responsible party takes1
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/CLOSEOUT 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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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. All 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 Issuance of a final determination letter to the recipient.
o Submission of a valid response to the OIG addressing all findings and
recommendations contained in the final audit report.
Closeout: All administrative activities have been completed, including corrective actions
and debt collection; the reviewing agency issues a standard closeout letter to the recipient
and the grant project file is sent to record storage.
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 Grants 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 years 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 ail
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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Superfund Assistance Agreements
* For recipients'records, the length of retention is 10 years 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 years 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.
ALL Other Assistance Agreements
* For recipients, the length of retention is 3 years from the date of
submission of the final FSR.
* For EPA's records, the retention period is 7 years after closeout of the assistance
agreement.
PARTY: AUDIT RESOLUTION AND DISPUTES
A. Audit Resolution - General Information
EPA Order 2750.2A (Management of EPA Audit Report^ . .d Followup Actions) jtates that
audit resolution must occur within 150 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 not 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
allowability 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 the award date is before October 1, 1988, 40 CFR Part 30 Subpart L applies.
If the award date is after October 1, 1988, 40 CFR Part 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 Part 30, Subpart J;
2. Bid protest decisions under 40 CFR Parts 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;
5. Policy decisions of the EPA Audit Resolution Board; and
6. Debarment/suspension actions taken by the Director, Grants Administration 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 of
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 Closeout
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
findings and avoid incomplete final determination letters (see Put 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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APPENDIX A
LISTING OF EXISTING EPA CLOSEOUT REGULATIONS, POLICIES, AND RELATED
GUIDANCE
.(1) 40 GFR Part 4 (Uniform Relocation Assistance), or 49 CFR Part 24 if applicable;
(2) 40 CFR Pait 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 Part 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-110 (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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(17) Construction grants Program For Municipal Waste water Treatment Works Handbook of
Procedures
(18) CG-250, Managing Construction Projects Student Manual: and
(19) The Strategy Paper for Closing Out the Construction Grant Program, dated 10/90 and
formally released January, 1991.
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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 JAMS. 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 Closeout the following codes are applicable:
A Pre-completion reminder mailed
B Completion reminder mailed
C Reminder(s) 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 d; te related to thi.» 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
PU 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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18
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
recommendation
RF Received and forwarded to Project Officer
RN Received negative report
RP Received positive report
REAI^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 Property Inventory Date (Ref No L7-A,
Real-Property-Date).
For purposes of Closeout the following codes are applicable:
DI Disposition instructions issued; further action required
DW Disposition instructions beir^ 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
RP Received positive report
FINAL-REPORT-CODE/DATE
A code indicating the status of the final report. The date 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 "FR" 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 cru> :ia 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 this 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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CA Cost analysis
FA Final audit
IA Interim audit
RN Received notice of cancellation of audit request
RP Received audit report
FINAL-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 c " 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.
FR Project close-out complete except for approval of final project report and final
disposition of property, if any. Applicable only to assistance programs
administered in Headquarters.
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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GICS SCREENS FOR CLOSING OUT CONSTRUCTION GRANTS
Closeout milestones for construction grants are found on a number of different screens
in GICS. 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.
* 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
Types 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 + 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.
OU.S. GOVERNMENT PRINTING OFFICE: 1993-"! 3- ^JS-SIOI1-
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APPENDIX S
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APPENDIX S
EPA ORDER 2200.4, "REVIEW PROCESS FOR
SCIENTIFIC, INFORMATIONAL, AND
EDUCATIONAL DOCUMENTS"
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ENVIRONMENTAL
PROTECTION TRANSMITTAL
AGENCY
2200.4
Decert^r 28, la8 2
PUBLICATIONS AMD COMMUNICATIONS MATERIALS - GENERAL
MATERIAL TRANSMITTED:
EPA Order No. 2200.4 - Review Process for Scientific, Informational
and Educational Documents.
MATERIAL SUPERSEDED:
None.
FILING INSTRUCTIONS:
File the attached material in numerical order in a three-ring binder
established for EPA Directives System.
Joh» P. Horton
Assistant Administrator for Administration
Otst: Directives
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ENVIRONMENTAL
PROTECTION ORDER 22004
AGENCY
PUBLICATION AND OCmirilCATIOrG MATERIALS -
RPVIEK PROCESS FDR sciEmric, iHFORrwriONAL AND EnoTinriAL
l. PURPOST.
a. This Order establishes Aqency policy on reviewing scientific, infor-
mational or educational .-rwterials. The purpose of this review process is to
protect the technical and scientific quality of these types of public materials
distributed by the Environmental Protection Agency, and ensure that they are
based on the best scientific and technical evidence available. Such a review
process will further engender the respect and recognition deserved by Anency
scientists and staff.
h. The process will provide a clearly defined route for the expeditious
review and approval of the publications before their public release. The goal
is to establish Agency responsibility for literature published in its nane and
by its employees when they are acting in an official capacity. This document
will not be construed as const ituting any suggestion of constraints on the
fme expression of ^Vjency employees.
c. This Order is intended to supplement other applicable guidelines
reonmendations, and supersedes other directives only to the extent that it is
inconsistent with then. Any program area or office may adopt procedures consistent
with this Order to meet its specific needs.
, 2. noojripTrs SUBTECT TO REVIEW.
a. T^e review process described in Paragraph 5 is applicable to all scientific,
informational, or educational publications, designed for public distribution and
created by an EPA erployee, contractor, grantee or consultant with the excep-
tions of:
(1) Congressional testimony;
(2) verbati-n testimony from hearings;
(3) Advance notices of Proposed Rulemakings (AITPRM's), proposed or
final regulations subject to a formal comment period;
directives Distribution Initiated by:
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ORDER 22n°'4
(4) press releases approved by the Office of Public Affairs within
the office of the Administrator;
(•5) legal opinions, briefs or memoranda, including initial, final,
or other decisions in quasi-judicial administrative proceedings;
(6) Federal Register Notices;
(7) ifotices of Public Hearinqs;
(8) tfcqoest for Proposals;
(9) publications by EPA employees proposed for scientific journals
which incorporate peer review (inclusion of a disclaimer statement is apnco-
nriatie when policy issues are incorporated in the article);
(in) Criteria rrxruments or other similar documents subject to
a forma I public conirent period or review by the Science Advisory Board or
the c!cierice Advisorv Panel;
(11) advisory cormittee stat'^ments and reports;
(.12) materials Generated on an enployee's own time usinq private
facilities;
(13) 'internal policy statements or memoranda; and
(14) official Aoency correspondence.
1. \PPLICARILITY. These auide lines are applicable to employees actinq in an
official canacity T.^ed to their work for the Aoency. They are also applicable
to rPA contractors, consultants, and qrantees to the extent provided for in
thoir anre«T*>nt with F^>A. Publications hy EPA enployecs are subject to review
if they are generated on Agency tiw? or are based on materials derived from EPA
sur«x.rt-.od activities. This Order does not provide for, nor describe, all of the
steos in the publication process; it is desioned to outline the mview procodurp
Tnis Order should not be construed to conflict with the disclosure pwvi«ions of
the Freedom of Information Act.
4. DRFPIITirrK.
a . The tern "publication" incluoes all EPA generated materials that may be
released in mass to the general public, inclurling:
(1) written statements necked to satisfy a statutory or requlatory
reouiroment;
(2) published or unpublished booVs, manuals, and research reports;
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2200.4
(3) informational brochures cr materials an:! newsletters or other
periodic reports;
(4) publications by EPA en-pioy^s nrc-rosod for outsit journals other
than Lose that incorporate peer
(5) project reports and other naterials file--: with the National Technical
Informaticn Fervice (bJTIS);
(6) EFA published proceedings resulting fr~m .Viency sponsored conferences,
wor^-shors , and seminars (papers by non-P^A er^pioyees should go through this peer
review process or co-.tain an adeouate -Jiscl
(?) contributions made to pub] -'cations by inter-igency working groups
where authorship is to be attributed to EPA or its employees (these publications
should no throuch this peer review process or contain an adequate disclaimer);
(3) audiovisual materials designed ti") be reisds^ to the general public
in other than a single presentation; cr,
(9) computer software c5esijnor: for release to the general public.
5. PROCEDURES.
a. Initiation of the Review Process.
(i) T^.e review process is initiated vhen the author (hereinafter includes
authors) submit? a publication to his/her inrcriarc supervisor or office director
for review, cootther with recormndaticr.s for at lease cwo peer reviewerr: who
should be specialists in the subject. Tr.v author nay r3quest that a reasonable
review schedule be established to ensure ti^vsiy processing.
(2) Iho nanuscript should he in near-finished fom to the- satisfaction
of the author. Typically, it should ba in a double-spaced, typed format with
all of the necessary tables, charts, illustrations and figures attached. A
designated supervisor evaluates the text and fon.-an" : it to, usually, the author's
reoonnended reviewers for scientific and technical review. Reviews nay be done
simultaneously in order to reduce the tine required.
(3) A<5ditional review by other EPA offict-s and laboratories may be
requested by any office through which a publication r»»st pess enroin-e to its
final publication form.
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2200.4
b. Peer Review.
(1) Peer review is designed to identify weak, .Doubtful, ambiguous or
unsupportable statements or conclusions. Itte peer reviewer is expect^ to <--v,3i-j-
ate the manuscript for general content, organization and scone, present at-, ion and
quality of data, validity of analytical technioues, soundness of conclusion.
and consistency of the text with tables, figures, illustrations and nans.
(2) A reviewer should use marginal notes or interlineations on tV»
draft publication to indicate suggested changes or questions, vjhore suggestions
are numerous or complex, or where more serious questions arise, an attached
memorandum is appropriate. Marked-up drafts, and accomoanyinq statements from
reviewers, are returned directly to the author unless other directions are provided.
(3) Reviews should be completed in a reasonably prompt fashion. Peer-
reviewers and those in the administrative chain should make every attempt to
meet the proposed time schedule. A goal would be for review from the office
director level up through the Associate, Assistant or Regional Administrator
level to be completed within two weeks. Refusal at any level of manaqement to
approve a document may be appealed once to the next higher level of management.
c. Redrafting.
(1) Ttie author should make efforts to give thoughtful consideration to
and to accommodate the comments provided by reviewers in modifying and redrafting
of the text. In preparing a revised draft, acceptable changes and corrections
should be incorporated. If only relatively minor differences of opinions on
scientific or technical issues exist between the author and reviewers, the
author should briefly explain his positions on the revised draft when it is sent
out for re-review. T^ie author should also indicate changes that may or mav
<£+ h-r-3 been made so as to alert the reviewers of a revised draft.
(2) Where substantial differences or misunderstandings occur, the
author should explain his/her views in more formal comments in a memorandum
attached to the revised draft of the manuscript. Informal consultation an^
discussion between reviewers and author are highly desirable in order to clarify
points of view and to facilitate agreement when significant differences arise.
(3) Ttie review process is repeated until the author feels that the
proposed publication is ready for submission for final administrative and
technical review. At this point, statements of concurrence and the signature
of the designated peer reviewprs should he attached to the text. In cases where
the author has not reached a consensus with the reviewers, comments on the nature
of their differences, prepared by the reviewers, should be attached to the text
and transmitted to subsequent administrative levels for review.
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ORDER
2200. 4
d. Administrative Review.
(1) The prepared publication should then he submitted to the office
director level for review. This office is expected to provide final approval
for technical and scientific soundness and overall organization and presentation
of data.
(2) At this level, or if appropriate at a lower level, a memorandum
outlininq any expenditures, and sources of funds or priorities, or unusuil condi-
tions should be attached. This memo should also include plans for publication,
dates, and the anticipated number of copies, as well as the purpose of the publi-
cation, the intended audience, a full description of the proposed format (i.e.,
size, number of pages, design and color) and/or a mockup of the finished product.
(3) The publication and accompanying memorandum then move to the Associate,
Assistant or Regional Administrator who has final authority on deciding whether
the document is a "major" document which then must be reviewed by the Science
Advisor and/or the Office of Public Affairs. In the Office of the Administrator,
the office director will have responsibility for the document and make this
decision. In sone cases, certain documents will be reviewed by both the .Science
Advisor and the Office of Public Affairs.
(4) All documents which are not "major" should he carefully examined
before publication as to their technical and scientific credence and quality.
The Associate, Assistant, or Regional Administrator is responsible for these
documents with regard to conformity with budgetary and quality guidelines.
e. Review by the Science Advisor
(1) If a document of any cost contains significant scientific or technical
uncertainties, it becomes a "major" document subject to review by the faience
Advisor or his designated representatives. The Associate, Assistant, or Regional
Administrator in whose program, region, or office the docinent originates, is
responsible for determining if the document contains scientific or technical
uncertainties. The latter may be determined by examination of peer reviewers'
comments and any attachments submitted by the author or reviewers.
(2) The Science Advisor, or his designated renresentatives, will review
the manuscript on behalf of the Administrator. The Science Advisor may sent?
manuscripts related to technical issues to other senior officials in the -«rjencv for
additional internal review. Those manuscripts of a complex technical nature may
be sent to selected experts outside the Agency for confidential review.
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0*0£" 2200. 4
(3) The Science Advisor, or his designate, will review documents for
general scientific and technical content, clarity, loqic, consistency, soundness
of conclusions, organization and scope, presentation and quality ot data, validity
of analytical techniques and overall conformity with research and publication
aims of the Agency. TTie Science Advisor will develop .systems for review, for
report, of cements to the author, and for notifying program areas of the final
decision regarding the publication.
f. Administrative and Technical Review by the Office of Public Affairs
(1) If a document falls into any of the following categories, it is a
"major" document subject to review by the Office of Public Affairs:
- any material of any cost that has policy implications. Tfte
Associate, Assistant, or Regional Administrator in whose
program, region, or office the documents originated,
is responsible for determining if a report has policy
implications;
- any product from a project funded at 550,000 or more;
- any single product that costs $10,000 or'more to print;
- any category or series of reports that costs $25,000 or
more a year to print; or,
- any periodical as defined by OM3 Circular A-3.
(2) Ttie Director of the Office of Public Affairs, or his designated
representatives, will review the manuscript on behalf of the Administrator. The
Director of the Office of Public Affairs may send manuscripts related to policy
issues to other senior officials in the Agency for additional internal review.
(3) The Office of Public Affairs will review both technical and non-
technical information materials for conformity with £PA's Public Information
Policy and Graphics Standards System. The Office of Public Affairs will oversee
the entire publication and printing system for major documents of the Agency to
ensure consistency and to avoid duplication. The Office of Public Affairs will
also be responsible for approving the mechanical matters of distribution,
manner of printed presentation, conformity to budget requirements, and overall
consistency with Agency goals. The Office of Public Affairs will develop systems
for review, for report of comments to the author, and for notifying program areas of
the final decision regarding the publication.
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ORDER 2200. 4
g. Ancroval and Publication Process
(1) T^e final Tannscript , if approved by the Associate, Assistant,
or T^-;ional Administrator is returned to the author for appropriate distribution
or publication, -la-jor" documents must he approved by the Sciencr? Advisor and/or
the Office of Public Affairs prior to publication. Followirrj such approval,
each administrative office that participated in the review process will be notified
of the action. Ttic author is responsible for ensuring publication and distribution
in accordance with guidelines established by the Office of Public Affairs.
(2) Papers Prepared for publication for outside journals are returned to
the author after aopropriate approval. Each administrative office that partici-
pated in the review process will be notified of this action. Ttx? author is
responsible for mailing the text to the outside journal and for supplying appropriate
offices in the Agency with depository copies. At this point, the paper may be
distributed by the author to the general public.
(3) In the event of an unfavorable review by OPA and/or the Science
Advisor, the manuscript is returned to the originating office or the author as
is annnnriatc. All comments should be addressed and necessary revisions made.
h. Products of External Contracts and Grants.
( 1 ) CT>A encouraoos the independent publication of the results of its
contract and grant research in appropriate scientific journals as an important
method of recording and renorting scientific information. Any journal article
so published must, however, contain the following statement:
"Although the research described in this article has
funded wholly or in part by the United States Environmental
Protection Agency throtxgh contract or grant (number) to (name),
it has not been subjected to the Agency's required peer and
policy review and therefore does not necessarily reflect the
views of the Agency- and no official endorsement should be
inferred."
(2) When an author receiving a contract or grant from EPA sends out a paper
for publication, a courtesy copy should also be sent to the EPA Project Officer who
will forward it to the appropriate Office Director, Associate, Assistant, or Regional
Administrator, and the Science Advisor. Following publication, copies of the journal
paper should be submitted to addressees in quantities as may be directed by the
Project officer. Provisions to ensure EPA receipt of journal papers by contractors
or grantees should be included in research agreements.
-7-
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2200.4
(3) Informational rnaterials, reports, and other products produced under
an EPA contract, grant, or cooperative agreement should go through a comparable
system of review prior to their release to the public as an EPA publication or
product, i^e Project Officer is responsible for insuring that adequate EPA
review consistent with the rights and data clauses of EPA contracts, grants or
cooperative agreements is conducted, including approvals by appropriate Associate,
Assistant, or tegional Administrators and the Science Advisor and/or Office of
Public Affairs, if necessary. Grant officers developing grants which involve
public information/public participation activities should encourage the use o*.
cooperative agree-nents which enable EPA to require the grantees to submit
their material for review and/or approval prior to its completion and distribution.
Anne n. Gorsuch
Administrator
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APPENDIX T
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APPENDIX T
SAMPLE INTERAGENCY AGREEMENT
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8-EPA
United States Environmental Protection Agency
Washington. DC 20460
Interagency Agreement/
Amendment
Part 1 - General Information
1. EPA IAG identification Number
2. Other Agency !AG ID Number (if known)
3. Type of Action
4. Funding Location by
Region
5. Program Office
Abbreviation
6. Name and Address of EPA Organization
7. Name and Address of Other Agency
8. Project Title
9. EPA Project Officer (Name, Address. Telephone Number)
10. Other Agency Project Officer (Name, Address, Telephone Number)
11. Project Period
12. Budget Period
13. Scope of Work (Attach additional sheets, as needed)
14. Statutory Authority for Both Transfer of Funds and Project Activities
15. Other Agency Type
Funds
Previous Amount
Amount This Action
Amended Total
16. EPA Amount
17. EPA In-Kind Amount
18. Other Agency Amount
19. Other Agency In-Kind Amount
20. Total Project Cost
21. Fiscal Information
Program Element
FY I Appropriation
Doc. Control No.
Account Number
Object
Class
Obligation/Deobligation Anr.
EPA Form 1610-1 (Rev. 10-88) Previous editions are obsolete
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Part II - Approved Budget
i EPA IAG Identification Number
22. Budget Categories
Itemization of [
This Action i
Itemization of Total Project
Estimated Cost to Date
(a) Personnel
(b) Fringe Benefits
(c) Trave,
(dl Equipment
(e) SuDDiies
(f) Procurement/Assistance
(g) Construction
(h) Other
(i) Total Direct Charges
(i) Indirect Costs: Rate
% Base $
(k) Total
(EPA Share
%) (Other Agency Share
%) $
23. Is equipment a-thorized to be furnished by EPA or leased, purchased, or rented with EPA funds?
(Identify all equipment costing $1,000 or more)
Yes
No
24. Are any ot tnese funds being used on extramural agreements? (See Item 22t)
Yes
No
Type of Extramural Agreement
Grant
Cooperative Agreement
J Procurement (Includes Small Purchase Order)
Contractor/Recipient Name (if known)
Total Extramural Amount Under This Project Percent Funded by EPA (if known)
Part III - Funding Methods and Billing Instructions
25.
Funds-Out Agreement (Note: EPA Agency Location Code (ALC) - 68010727)
• ; Disbursement Agreement
U
Repayment
Request for repayment of actual costs must be itemized on SF 1081 or SF 1080 and submitted to the
Financial Management Center, EPA, Cincinnati. OH 45268:
Monthly
Quarterly
Upon Completion of Work
Advance
Only available for use by Federal agencies on working capital fund or with appropriate justification of
need for this type of payment method. Unexpended funas at completion of work will be returned to
EPA. Quarterly cost reports will be forwarded to the Financial Management Center. EPA. Cincinnati.
OH 45268.
Allocation Used to transfer obligational authority or transfer of function between Federal agencies. Must receive
T, " prior approval by the Office of the Comptroller, Budget Division, Budget Formulation and Control
i ransier-uut Branch, EPA Headquarters. Forward appropriate reports to the Financial Reports and Analysis
Branch, Financial Management Division, PM-226F, EPA, Washington. DC 20460.
26.
Funds-ln Agreement
• Reimbursement Agreement
Repayment
Advance
Allocation Transfer-In
Other Agency's IAG Identification Number
EPA Program Office Allowance Holder/Responsibility Center Number
Other Agency's Billing Address (Include Agency Location Code
or Station Symbol Number)
Other Agency's Billing Instructions and Frequency
EPA Form 1610-1 (R«v. 10-M)
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Part IV - Acceptance Conditions
EPA IAG Identification Number
27. General Conditions
The other agency covenants and agrees that ft will expedltlously Initiate and
complete the project for which funds have been awarded under this agreement.
28. Special Conditions
Part V • Offer and Acceptance
NOTE: 1) For Funds-Out actions, the agreement/amendment must be signed by the other agency official In duplicate and one
original returned to the Grants Administration Division for Headquarters agreements or to the appropriate EPA Regional
IAG administration office within 3 calendar weeks after receipt or within any extension of time as may be granted by the
EPA. The agreement/amendment must be forwarded to the address cried In Item 29 after acceptance signature.
Receipt of a written refusal or failure to return the properly executed document within the prescribed time may result In the
withdrawal of the offer by EPA. Any change to the agreement by the other agency subsequent to the document being
signed by the EPA Action Official, which the Action Official determines to materially alter the agreement/amendment, shall
void the agreement/amendment
2) For Funds-ln actions, the other agency will Initiate the action and forward two original agreements/amendments to the
appropriate EPA program office for signature. The agreements/amendments will then be forwarded to the appropriate
EPA IAG administration office for acceptance signature on behalf of the EPA. One original copy will be returned to the
other agency after acceptance.
EPA IAG Administration Office (for administrative assistance)
29. Organization / Address
US ENVIRONMENTAL PROTECTION AGENCY
GiAB, GRANTS ADMIN. DIVISION, (3903F)
401 M STREET, SW
WASHINGTON, DC 20460 .
EPA Program Office (for technical assistance)
30. Organization / Address
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, DC 20460
Certification
All signers certify that the statements made on this form and all attachments thereto are true,
accurate, and complete. Signers acknowledge that any knowingly false or misleading statement
may be punishable by fine or Imprisonment or both under applicable law.
Decision Official on Behalf of the Environmental Protection Agency Program Office
31. Signature
Typed Name and Title
Data
Action Official on Behalf of the Environmental Protection Agency
32. Signature
Typed Name and Trite
W. SCOTT McMORAN, Chief
GRANTS INFORMATION & ANALYSIS BRANCH
Date
Authorizing Official on Behalf of Other Agency
33. Signature
Typed Name and Thle
Date
EPA Form 181O-1 (R«». 11X88)
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Instructions
This form is to be used for all Funds-Out imeragency
agreements. It may be used for Funds-In interagency
agreements if the other funding agency agrees to do so. It
may not be used for policy agreements. However, if the
other agency's instrument is used, it and any attachments
thereto must reflect aJI the information contained in thus
form.
This form is to be used in conjunction with the Assistance
Administration Manual and any other supplemental in-
formation.
1. The original agreement identification number will be
assigned by the LAG administration/management office
servicing the EPA program office initiating the action. If
rhe original project is amended, cite only the first 10 char-
acters of the original agreement number (e.g.,
DW81931013). The servicing LAG administration/man:
agement office will assign the amendment designator (e.g.,
-1).
2. Enter the other agency's LAG identification number (if
known).
3. Identify the purpose of this action using one of the fol-
lowing terms:
New Agreement
Increase in Funds
Decrease in Funds
Administrative Amendment
"Administrative amendment" is used to identify project
period extensions, project officer changes, special condi-
tion changes, rebudgeting of funds, etc.
The four terms above are listed in order of priority, there-
fore, should an action involve multiple changes use the
first term that appropriately identifies one of the changes.
4. Identify the regional location of the EPA program of-
fice disbursing/receiving funds (e.g., projects funded by
EPA Headquarters and ORD laboratories will cite Re-
gion XI).
:". Enter the EPA GICS abbreviation for the program of-
fice. This should be at the Office Director or comparable
level (e.g., OERR/HQ), except for EPA ORD laborato-
ries (e.g., ERIVDUL).
<>. Enter "Environmental Protection Agency" followed by
the name and mailing address of the EPA organization
responsible for technical management of the project.
EPA offices should be identified at the Office Director or
comparable level for Headquarters or the appropriate Re-
gional Office.
7. Enter the name and mailing address of the other
agency. Identify the Department and the appropriate or-
ganizational components within the Department (e.g.,
DHHS, PHS, Center for Disease Control).
Note: Use the appropriate Department of Energy area of-
fice for agreements with a DOE National Laboratory.
8. Enter project title. Be concise and use only the space
provided. If Superfund site specific, include site location
(e.g.. city and State).
9. Enter the EPA Project Officer name, EPA mailing ad-
dress, and telephone number.
10. Enter the other agency project officer name, other
agency mailing address, and telephone number.
11. Enter beginning and ending dates of entire period ex-
pected to be needed to complete the project. This period
of time should not be longer than 5 years. For projects
requiring more than 5 years, appropriate justification
must be submitted in the decision memorandum.
12. Enter the period of time this transaction will fund
project activities. (Note budget period cannot exceed the
period of appropriation.)
13. Provide a complete description of the project work to
be performed under the agreement. In jointly funded pro-
jects, the scope of work should describe specific responsi-
bilities of the participating agencies, not just the portion
funded by EPA. Additional pages should be attached as
necessary.
14. Enter both the appropriate statutory authority that
authorizes the interagency agreement mechanism and the
appropriate statutory authority that authorizes project ac-
tivities.
When entering into Funds-Out agreements with Federal
agencies, cite (1) Economy Act of 1932, as amended (31
USC 1535) and/or other independent program authority
and (2) the statutory authority that authorizes the project
activities (e.g., Clean Water Act).
When entering into Funds-In agreements with State and
local governments, cite (1) Intergovernmental Coopera-
tion Act of 1968 (31 USC 6505) and. to the extent that the
agreement involves contractor services, also cite appropri-
ate cooperation authorities and (2) the statutory authority
that authorizes the project activities.
For Funds-In agreements with Federal agencies, cite (1)
Economy Act of 1932, as amended (31 USC 1535) and/or
other independent program authority and (2) the other
agency's statutory authority authorizing the project activi-
ties.
EPA Form 1610-1 (Rev. 10-88)
Page 4 of 5
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DRAFT
May 3, 1995
MEMORANDUM
SUBJECT: Interagency Agreement Decision Memorandum Guidance/ Pre-
award IAG Activities, and Subcontractor Selection
FROM: Gary Katz/ Director
Grants Administration Division
TO: Addressees
This memorandum specifies the information Interagency
Agreement decision memorandums should include. If each decision
memorandum is complete, your offices' rework and our IAG
specialists' follow-up will be reduced. This guidance clarifies
existing policy and responds to weaknesses identified by the
Inspector General. (Simple transmittal notes may be used to
transmit amendments to agreements initially approved based on a
decision memorandum developed in accordance with this guidance
unless there have been significant changes from the original
agreement.)
Effective June 1, Interagency Agreement decision memorandums
should include at least the following—
1. A description of the proposed project's objectives and an
explanation as to how the IAG will accomplish them. The
description of the project benefits should be consistent with
the authority for the agreement (see paragraph 2) . If the
funded work is a part of a larger project/ the description
should be clear as to which parts of the work are funded by
the IA6 and which are not.
2. A statOMnt of which statutory authority is thought to be the
basis for the IAG. Generally/ the authority will be either
the Economy Act or EPA's "cooperation" authorities (see
attachment 4).
3. For lAGs with other Federal agencies which involve
international work and for funds-in agreements with foreign
governments or international organizations, a statement that
the project has been reviewed and approved by OGC and the
Office of International Activities and the OLA clearance form.
(OIA will obtain necessary clearance from the US Trade and
-------
Development Agency for agreements with foreign governments and
international organizations.) Authority for international
lAGs with other federal agencies is either the Economy Act or
EPA's cooperation authorities and Section 102(2)(F) of the
National Environmental Policy Act. Authority for funds-in
agreements with foreign governments or international
organizations (not technically lAGs, but using the IAG form)
is Section 607 of the Foreign Assistance Act (22 U.S.C. 2357) .
4. A discussion of the alternatives to an IAG which you
considered and why the IAG mechanism was selected. The
discussion should explain how the IAG will further economy and
efficiency in the government. For Economy Act lAGs, if the
IAG involves another agency providing EPA good* or services
through a contract, the economy and efficiency determination
should be based on an (independent government
estimate?????????). A copy of the estimate should be attached
to the decision memorandum. If the other agency vi11 perform
the services with its in-house staff, an analysis of
government performance versus commercial performance in
accordance with OMB circular A-76 should be attached, unless
the other agency has already performed the analyst!*..
5. An explanation of why the other agency was selected, or why the
other agency selected EPA.
6. (a) For Economy Act lAGs, if funds under the IAG will be used
for travel, the purpose of the IAG and the associated travel
must be to carry out a project in support of the other
agency's mission and not to augment the performing agency's
travel ceiling. If EPA will use more than 15% or $15,000,
whichever is less, of the funds under a funds-in IAG for
travel, the decision memo must include a statement that the
purpose of the IAG and the associated travel is to carry out
a project in support of the other agency's mission and not to
augment EPA's travel ceiling. It must make clear that the EPA
staff would not make the trips planned under the IAG/ except
for the other agency's project. (For funds-out lAGs with
travel budgets which meet the criteria above, the statement
must come from the other agency's project officer.)
(b) Efec an IAG under EPA's cooperation authorities, if EPA
will ttSte more than 15% or $15,000, whichever is less, of the
funds under a funds-in IAG for travel, the decision memo must
include a statement that the purpose of the IAG is not for the
purpose of exceeding a travel ceiling or similar limitation.
7. if funds under an IAG authorized by EPA's cooperation
authorities will be used for a grant or cooperative
agreements, a project officer's statement that the principle
purpose of the project is to support or stimulate the
recipient to accomplish a public porposa and not for the
direct use or benefit of the Federal government (see
attachment 4).
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8. If the IAG proposes that payments be made in advance, a
justification for use of the advance payment method.
Generally, advance payments are authorized only when an agency
has a working capital fund or other statutory or regulatory
requirement for advances; EPA does not have authority to
request payments in advance.
I am attaching several memorandums which have updated TAG
policy in recent years. Some of then may require decision
memorandums to include additional information to cover specific
circumstances. Attached are—
o An August 10, 1988, memorandum from Dave Ryan, EPA
Comptroller and Harvey Pippen, which explains
justification requirements when LAGs are submitted to GAD
after EPA staff have authorized start of work (generally,
of course, such authorization* should not b« given)
(Attachment 1).
o A memorandum signed by Jon Cannon, which makes clear that
EPA staff should not be involved in selecting other
agencies' contractors or subcontractors under lAGs
(Attachment 2).
o A memorandum from Scott McMoran and concurred in by Steve
Pressman, OGC, which clarifies the availability period of
funds under lAGs (Attachment 3).
o A list of the statutory and related authorities which
authorize the agency to enter into lAGs with an
explanation of when to use them (Attachment 4).
If you have questions on this guidance, please call Scott
McMoran in the Grants Information and Analysis Branch on (202) 260-
4392.
ATTACHMENTS
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\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
' . WASHINGTON, D.C. 20460
AOMINISTSAT C'.
AND RESOURCE 3
MANAGEMEV
MEMORANDUM
SUBJECT: Availability .of IAG Funds
u&te/foyA^i-—
FROM: ScottMcMoran, Chief
Grants Information and Analysis Branch
TO: Steve Pressman, Chief
Office of General Counsel Grants Branch
Several offices have, asked questions concerning when funds
expire under Interagency Agreements, i.e., can no longer be
obligated or expended.
In our opinion, current guidance in the Compendium of
Procedures is fuzzy. We, with assistance from the Cincinnati
Financial Management Office, have drafted the following set of
principles based on our understanding of the relevant statutory
provisions and appropriations law guidance.
o Funds transferred for expenses such as salaries and
benefits, and travel which cite the Economy Act for
authority. Appropriations law is clear—the funds expire
when the parent appropriation expires. (31 USC 1535(d)).
This would be true even if the IAG was for a project
which was not completed during the availability period
(Compendium of Procedures, Chapter 1, paragraph 7.g.)-
o Funds transferred for expenses such as salaries,
benefits, and travel and which cite CERCLA or the
cooperation provisions of EPA's program statutes for
authority are obligated when the IAG is fully executed
(signed by both agencies). The funds are available to
the receiving agency for obligation and expenditure until
they are expended or the project ends (Compendium of
Procedures, Chapter 2, paragraph III.c.l.).
o Funds transferred for use under a contract and which cite
the Economy Act for authority are obligated when the IAG
is fully executed. However, the receiving agency must
obligate the funds to the contract before the period of
R»cycl«d/R«cyclable
Printed with SoyCanoia in* on :a:ar '-a:
-------
availability of the source appropriation ends. Then, the
funds are available for expenditure until t.ie project is
completed or the contract ends, whichever is first
(Compendium of Procedures, Chapter 2, paragraph
III.c.l.).
o Funds transferred for use under a contract or grant and
which cite as authority CERCLA or the cooperation
provisions of EPA's statutes are obligated when the IAG
is fully executed. The funds are available until the
project* is completed, or the contract/grant ends
(Compendium of Procedures, Chapter 2, paragraph
III.c.l.).
If we can agree on these principles, or a reasonable
facsimile, we can add the appropriate information to each IAG so
that the program offices and other agencies will be aware of how we
will treat the funds.
If you concur, please sign the block below. Please call Scott
McMoran on 260-4392 if you have questions.
CONCUR:
_
Steve Pressman, OGC
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SUBJECT INDEX
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SUBJECT INDEX
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SUBJECT INDEX
(Numbers Refer to the Module and Page in a Module)
Acquisition vs Assistance
Approval/Decision Official role — 1.4
Award Official role — 1.5
Direct Benefit — 1.7; 8.11
EPA Order — 1.4; Appendix B
Failure to comply — 1.12
GMO Role — 1.5
Principle Purpose — 1.6-8
Support or Stimulation — 1.8
Administrative Requirements
Cooperative Agreements — 1.10-11; 2.8-9
Grants — 1.10; 2.8-9
Application Package
Content — 3.11; Appendix P
GMO Responsibility — 3.7-8
PO Responsibility —3.7-8
Approval/Decision Official
Roles and Responsibilities — 1.4
Assistance Identification Number -- 3.10
Assurances
Purpose — 3.31
Signatures — 3.31
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(Numbers Refer to the Module and Page in a Module)
Audits
Audit Officials — 7.4
Audit Process — 7.5-6
Documentation — 7.7
External
Single Audit Act (Non-Federal Audits --
2.10; 7.2-3
Interaction With Auditors — 7.7-8
Interagency Agreements -- 8.15
Internal — 7.2
Requests — 7.3
Surviving an Audit — 7.7-8
Automated Clearinghouse (ACH) — 5.5
Award Package — 4.4
Award Instrument
Assistance vs Acquisition — 1.2
Cooperative Agreement, definition — 1.10
Grant, definition — 1.10
Interagency Agreement, definition — 8.1
Carryover of Unobligated Balances -- 2.23; App
end
i x
K
Certifications
Anti-lobbying — 3.37
Drug-free Workplace — 3.37
Procurement System -- 3.37
Suspension and Debarment — 3.36
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(Numbers Refer to the Module and Page in a Module)
Chcinges
Informal Approval — 5.11-12
Prior Written Approval — 5.8
All Recipients — 5.9
Exceptions for Research Awards — 5.10
Nonprofits — 5.10
State, Local, Tribal Governments — 5.9-10
Universities — 5.10
Closeout — Appendix R
FMO Roles and Responsibilities •— 6.2; 6.17
GMO Roles and Responsibilities — 6.2; 6.16
Initiating — 6.1; 6.5
PO Roles and Responsibilities — 6.2; 6.15
Products/Reports
Inventions — 6.6
Peer Review — 6.7
Publications -- 6.7-8
Property Disposition — 6.9-12
Recipient Responsibilities — 6.2;6.17
Record Retention — 6.13-14
Repayment of Debts — 6.8
Timing — 6.3-4
Code of Federal Regulations
Force and Effect of Law -- 2.11
General Administrative Regulations
Nonprofits — 2.15
State, Local Governments, and Indian
Tribes — 2.16
Universities — 2.15
Intergovernmental Review — 2.13
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(Numbers Refer to the Module and Page in a Module)
Program Specific Regulations — 2.19
Competition
Justification in Decision Memorandum —-1.14
Requirements for — 1.14
Conferences — 1.9
Conditions
High Risk Applicants/Recipients -- 4.9
Special Conditions — 4.9
Terms and Conditions — 4.8-9
Conflicts of Interest
Deputy Ethics Officials — 1.15
EPA Employees — 1.15
Preferential Treatment -- 1.15
Recipient Code of Conduct —1.16
Recipient Decisions — 1.16
Confidential Business Information — 3.9
Cooperative Agreement — 1.11
Cooperation Authorities --8.5-6
Cost Principles — 2.10
Allocable —3.24
Allowable — 3.24
Eligible — 3.23
Preaward — 3.25-26
Reasonable — 3.23
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(Numbers Refer to the Module and Page in a Module)
Cost Sharing
Federal vs Recipient Share — 3.18-19
In-kind — 3.19
Debarment and Suspension — 2.17; 3.36
Decision Memorandum
Assistance Agreement — 1.4; 4.6-7; 8.12-13
Interagency Agreement — 8.10-11
Delegations of Authority — 2.3-4; Appendix F & G
Deviations
Actions
Can Deviate From — 5.15
Cannot Deviate From — 5.15
Approval/Disapproval Authority — 5.14
Content of Request — 5.15
Disadvantaged Business Utilization Plan—2.24;
8.15; Appendix M
Disputes
Disputable Activities — 5.16
Nondisputable Activities — 5.16
Economy Act of 1932 — 8.5
Equipment -- 3.27
Executive Orders — 2.5-7
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(Numbers Refer to the Module and Page in a Module)
Federal Grant and Cooperative Agreement Act —
1.2-3; Appendix A
Federal Statutes — 2.2; Appendix F
Freedom of Information Act — 3.9
Funding Package — 4.5-7
Guidance, Program
Distribution — 3.2-3
National Program Manger — 3.2
Purpose — 3.2
Regional — 3.2
Indian Tribes
Intergovernmental Reviews — 2.12
Indirect Cost Rate Agreements — 3.16; 8.15
In kind Assistance — 1.12; 3.17
Interagency Agency Agreements
Authority — 8.4-7
Decision Memorandum — 8.10-11
Federal lAGs ~ 8.1-2
Funds Out — 8.1; 8.12
Funds In — 8.1; 8.12
Guidance — 8.8
Intergovernmental Agreement — 8.2; Appendix T
International lAGs — 8.3
Authority — 8.7
Funds From Foreign Governments — 8.3
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(Numbers Refer to the Module and Page in a Module)
Limits on Availability of Funds — 8.9
Memorandum of Understanding (MOU) — 8.2
Ordering Agency — 8.1
Payment/Billing — 8.13-14
Advance — 8.10; 8.13
Reimbursement — 8.13
Policy Agreements — 8.2
Requirements — 8.15
Servicing Agency — 8.1
Travel — 8.10
Intergovernmental Cooperation Act — 8.5
Intergovernmental Review — 2.12-14
International Agreements
Approvals — 3.40; 8.3
Department of State Role — 3.40; 8.3
Office of International Activities Role —
3.40; 8.3
Minority Business Enterprise/Women Business
Enterprise
EPA Plan -- 2.6; 2.24; 8.11
Executive Orders — 2.6
Objectives — 2.24
Reports — 6.6
Monitoring
In-house Reviews — 5.2-4
On-site Reviews — 5.2
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(Numbers Refer to the Module and Page in a Module)
Official Files — Appendix Q
Grants Management Office — 5.14; 8.14
Program Office — 8.14
OMB Circulars
Applicability to Federal Agencies — 2.9
Applicability to Recipients — 2.9
Nonprofits
Administrative Requirements (A-110) — 2.9
Cost Principles (A-122) — 2.10
Audits (A-133) — 2.10
State, Local Governments, and Indian Tribes
Administrative Requirements (A-102) — 2.9
Cost Principles (A-87) — 2.10
Audits (A-128) ~ 2.10
Universities
Administrative Requirements (A-110) — 2.9
Cost Principles (A-21) — 2.10
Audits (A-133) -- 2.10
Payment
Advance
Automated Clearinghouse (ACH) -- 5.6
Working Capital Advance — 5.7
Reimbursement — 5.6
Peer and Publication Review — 6.8-9; Appendix S
Performance Based Assistance — 2.24; Appendix L
Pollution Prevention -- 2.25; Appendix O
Preapplication Assistance — 3.4-6
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(Numbers Refer to the Module and Page in a Module)
Principle Purpose
Grants vs Contracts — 1.3
Procurement
Certification Form (EPA Form 5700-48) — 3.37
MBE/WBE Requirements — 2.6; 2.24
Program Guidance
Annual Guidance — 3.2-3
Annual Planning Process — 3.2
Program Income — 3.20-21
Project Narrative/Workplan — 3.12; 3.32
Continuing Environmental Program Grants —
3.33
Key Persons — 3.33
Negotiations — 3.32-33
Purpose — 3.32
Technical Review — 3.12; 3.32
Property
Acquisition — 3.29
Disposition — 6.3; 6.7
EPA Interest in Property — 3.30
Exempt Property — 3.28
Intangible — 3.27
Personal — 3.27
Real — 3.28
Supplies — 3.27
Title — 3.29-30
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(Numbers Refer to the Module and Page in a Module)
Quality Assurance/Quality Control
Management Plan — 3.38
PO responsibilities — 3.39
Program Plan — 3.38
Project Plan — 3.38
Requirements — 3.38
Recipient Performance
Coordination -- 5.18
Noncompliance — 5.18
Performance Based Assistance — 5.19
Recycled Paper — 2.22, Appendix I
Regulatory
40 CFR
40 CFR
40 CFR
40 CFR
40 CFR
40 CFR
40 CFR
40 CFR
40 CFR
40 CFR
Authorities
Part 29 ~ 2.12
Part 30 — 2.15;
Part 31 — 2.16;
Part 32 — 2.17
Part 34 — 2.18
Part 35 — 2.19
Part 40 — 2.20;
Part 45 — 2.20;
Part 46 — 2.21;
Part 47 — 2.21;
Appendix D
Appendix E
Appendix H
Appendix H
Appendix H
Appendix H
Reports
GMO Responsibilities -
PO Responsibilities —
Requirements -- 5.2-4
- 5.2-4
5.2-4
10
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(Numbers Refer to the Module and Page in a Module)
Reviews
Administrative — 3.7
Budget
Categories — 3.14-16
GMO Responsibilities— 3.14
PO Responsibilities — 3.14
Extramural (non-EPA) Reviews — 3.8
Peer — 6.8
Technical — 3.7-8; 5.3-4
Time Frames — 3.9
Roles and Responsibilities
Award Official — 4.10
Applicant — 3.44; 4.13
Financial Management Office — 3.44; 4.13;
5.22
Grants Management Offices — 3.43; 4.3; 4.10;
4.12; 5.22; 8.14
MBE/WBE Coordinators — 3.45; 4.13; 5.22
Office of General Counsel/Regional Counsel --
3.44; 4.13; 5.24
Project/Program Offices — 1.5; 3.41-42; 4.11;
5.20-21; 8.12-13
Recipient — 4.10; 4.13; 5.23
Senior Resource Official — 1.4; 4.2; 4.13
Solicitations (Research and Development) -- 3.2-3
Substantial Involvement — 1.11
Timely Award — 2.25; Appendix N
Transferring an Award -- 5.13
11
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(Numbers Refer to the Module and Page in a Module)
Travel — 3.16; 8.7; 8.11
Workplan
Review — 3.32-33
Tips for Negotiating — 3.34-35
12
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GLOSSARY
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GLOSSARY
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GLOSSARY
1. ACCRUED EXPENDITURES: The charges incurred by the
recipient during a given period requiring the provision of funds for
(a) goods and other tangible property received;
(b) services performed by employees, contractors, subrecipients,
and other payees, and
(c) other amounts becoming owed under programs for which no
current services or performance is required (such as annuities,
insurance claims, and other benefit payments. (40 CFR Parts 30
&31)
2. ACCRUED INCOME; The sum of:
(a) earnings during a given period from services performed by the
recipient and goods and other tangible property delivered to
purchasers, and
(b) amounts becoming owed to the recipient for which no current
services or performance is required by the recipient. (40 CFR
Parts 30 & 31)
3. ACQUISITION COST OF EQUIPMENT; The net invoice unit price
of the equipment, including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property
Disable for the purpose for which it was acquired. Other charges such
as the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting
practices. (40 CFR Parts 30 & 31)
4. ADMINISTRATIVE REQUIREMENTS: Those matters common to
grants in general, such as financial management, kinds and frequency
of reports, and retention of records. These are distinguished from
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programmatic requirements, which concern matters that can be
treated only on a program-by-program or grant-by-grant basis, such
as activities that can be supported by grants under a particular
program. (40 CFR Part 31)
5. ADVANCE; A payment made by treasury check or other
appropriate payment mechanism to a recipient upon its request either
before outlays are made by the recipient or through the use of
predetermined payment schedules. (40 CFR Part 30)
6. ALLOCABLE COSTS:
(a) A cost is allocable to a particular cost objective if the goods or
services involved are chargeable or assignable to such cost
objective in accordance with relative benefits received.
(b) All activities which benefit from the governmental unit's
indirect cost, including unallowable activities and services
donated to the governmental unit by third parties, will receive
an appropriate allocation of indirect costs.
(c) Any cost allocable to a particular Federal award or cost
objective under the principles provided for in OMB Circular A-
87 may not be charged to other Federal awards to overcome
fund deficiencies, to avoid restriction imposed by law or terms
of the Federal awards, or for other reasons. However, this
prohibition would not preclude governmental units from
shifting costs that are allowable under two or more awards in
accordance with existing program agreements.
(d) Where an accumulation of indirect costs will ultimately result
in charges to a Federal award, a cost allocation plan will be
required as described in Attachments C, D, and E of OMB
Circular A-87. (OMB Circular A-87)
7. ALLOTMENT: An amount representing a state's share of funds
requested in the president's budget or appropriated by Congress for
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an environmental program, as EPA determines after considering any
factors indicated by 40 CFR Part 35-Subpart A. The allotment is not
an entitlement but rather the objective basis for determining the
range for a state's planning target. (40 CFR Part 35—Subpart A)
8. ALLOWABLE COSTS: Those project costs that are: eligible,
reasonable, necessary, and allocable to the project; permitted by the
appropriate Federal cost principles, and approved by EPA in the
assistance agreement. (40 CFR Part 30)
9. AMENDMENT:
(a) FORMAL AMENDMENT; A written modification of an
assistance agreement signed by both the Award Official and the
authorized representative of the recipient. (Assistance
Administration Manual)
(b) INFORMAL AMENDMENT: Proposed project change
which does not substantially alter the objective or scope of the
project.
10. APPLICABLE CREDITS:
(a) Those receipts or reduction of expenditure-type transactions
that offset or reduce expense items allocable to Federal awards
as direct or indirect costs, e.g., purchase discounts; rebates or
allowances, recoveries or indemnities on losses, insurance
refunds or rebates, and adjustments of overpayments or
erroneous charges. To the extent that such credits accruing to
or received by the governmental unit relate to allowable costs,
they shall be credited to the Federal award either as a cost
reduction or cash refund, as appropriate.
(b) In some instances, the amounts received from the Federal
Government to finance activities or service operations of the
governmental unit should be treated as applicable credits.
Specifically, the concept of netting such credit items (including
any amounts used to meet cost sharing or matching
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requirements) should be recognized in determining the rates or
amounts to be charged to Federal awards. (See Attachment B
of OMB Circular A-87, item 15, "Depreciation and use
allowances," for areas of potential application in the matter of
Federal financing of activities.)
10. APPLICANT: Any entity that files an application or unsolicited
proposal for EPA financial assistance under 40 Chapter I—
Environmental Protection Agency, Subchapter A — General. (40 CFR
Part 30)
11. APPROVAL MEMO: A memo originated by the Project Officer and
concurred in by the immediate supervisor which denotes work plan
and Federal funding approval. (Region 9)
12. APPROVAL OFFICIAL: An EPA official delegated the authority to
approve or reject applications for assistance and the
technical/programmatic terms and conditions of proposed assistance
projects. (Assistance Administration Manual)
13. ASSISTANCE AGREEMENT; The legal instrument 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 specify: budget and project periods; the Federal
share of eligible project costs; a description of the work to be
accomplished, and any terms and conditions/special conditions.
14. AUTOMATED CLEARING HOUSE (ACH); Electronic wire
transfer system to pay recipients through the Federal Reserve System
and their local bank. (Replaced former letter of credit system.)
(Region 9)
15. AWARD: (see also "Assistance Agreement", "Cooperative
Agreement", "Grant", "Grant Agreement")
(a) Financial assistance that provides support or stimulation to
accomplish a public purpose. Awards include grants and other
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agreements in the form of money or property in lieu of money
by the Federal Government to an eligible recipient. The term
does not include: technical assistance which provides services
instead of money, other assistance in the form of leans, loan
guarantees, interest subsidies, or insurance; direct payments of
any kind to individuals, and contracts which are required to be
entered into and administered under procurement laws and
regulations. (40 CFR Part 30)
(b) Grants, cost reimbursement contracts and other agreements
between a State, local and Indian tribal government and the
Federal Government. (OMB Circular A-87)
16. AWARD OFFICIAL: The EPA official with the authority to execute
assistance agreements and to take other actions authorized by 40 CFR
Chapter I, Subchapter A and by EPA Orders. (40 CFR Part 30) The
EPA official delegated the authority to execute assistance agreements.
(Assistance Administration Manual)
17. AWARDING AGENCY:
(a) With respect to a grant, cooperative agreement, or cost
reimbursement contract, the Federal agency, and
(b) With respect to a subgrant/subaward, the party that awarded
the subgrant/subaward. (40 CFR Part 31 & OMB Circular A-
87)
18. BUDGET PERIOD: (see also "Funding Period"): The length of time
EPA specifies in an assistance agreement during which the recipient
may expend or obligate Federal funds.
19. CASH CONTRIBUTIONS;
(a) The recipient's cash outlay, including the outlay of money
contributed to the recipient or subrecipient by other public
agencies and institutions, and private organizations and
individuals (i.e., third parties). When authorized by federal
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legislation, Federal funds received from other assistance
agreements may be considered as recipient or subrecipient cash
contributions. (40 CFR Parts 30 & 31)
(b) Actual non-Federal dollars that a recipient expended for goods
and services and real or personal property used to satisfy cost
sharing requirements (see "In-kind Contributions").
(Assistance Administration Manual)
20. CENTRAL SERVICE COST ALLOCATION PLAN: The
documentation identifying, accumulating, and allocating or
developing billing rates based on the allowable costs of services
provided by a governmental unit on a centralized basis to its
departments and agencies. The costs of these services may be
allocated or billed to users.
20. CLOSEOUT:
(a) The process by which a Federal awarding agency determines
that all applicable administrative actions and all required work
of the award have been completed by the recipient and federal
awarding agency. (40 CFR Part 30)
(b) The final EPA actions to assure satisfactory completion of
project work and administrative requirements: the submission
of acceptable required final reports; financial settlement; the
resolution of any outstanding issues under an assistance
agreement, and the notification of the recipient. (Assistance
Administration Manual)
21. CLOSEOUT MEMO: The Project Officer's memo which documents
their review of the recipient's financial status report against their
performance; states that performance has been completed, and
identifies the disposition of any remaining Federal funds. (Region 9)
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22. COGNIZANT AGENCY: The Federal agency responsible for
reviewing, negotiating, and approving cost allocation plans or indirect
cost proposals developed under OMB Circular A-87 on behalf of all
Federal agencies. OMB publishes a listing of cognizant agencies.
(OMB Circular A-87)
23. COMMITMENT:
(a) The official reservation of funds and authorization to incur
obligations. (Assistance Administration Manual)
(b) A formal action to reserve funds for a specific purpose in the
future (e.g., a grant/cooperative agreement). For financial
assistance, the commitment is reflected by a commitment
notice. (Region 9)
24. CONTINUATION: An extension of an assistance agreement for an
additional funding/budget period for a project the agency initially
agreed to fund for a definite number of years. (Assistance
Administration Manual)
25. CONTINUATION AWARD: (see also "Renewal") 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 Environmental Programs. (40 CFR Part 30)
26. CONTINUING ENVIRONMENTAL PROGRAM: A
state/interstate/local environmental agency pollution control program
which will not be completed within a definable time period. (See 40
CFR Part 35-Subpart A.)
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27. CONTINUING RESOLUTION: Legislation enacted by Congress to
provide budget authority for Federal agencies and/or specific
activities to continue in operation until the regular appropriations are
enacted. Continuing Resolutions are enacted when action on
appropriations is not completed by the beginning of a Fiscal Year.
("Principles of Federal Appropriations Law")
28. CONTRACT;
(a) A procurement contract under a grant or subgrant, and a
procurement subcontract under a contract. (40 CFR Parts 30
&31)
(b) A mutually binding legal relationship obligating the seller to
furnish the supplies or services (including construction) and the
buyer to pay for them. It includes all types of commitments
that obligate the government to an expenditure of appropriated
funds and that, except as otherwise authorized, are in writing.
In addition to bilateral instruments, contracts include (but are
not limited to): awards and notices of awards; job orders or
task orders issued under basic ordering agreements; letter
contracts; orders, such as purchase orders, under which the
contract becomes effective by written acceptance or
performance; and, bilateral contract modifications. Contracts
do not include grants and cooperative agreements covered by 31
U.S.C. 6301 et seq.
9. CONTRACTOR: Any party to whom a recipient awards a contract.
30. COOPERATIVE AGREEMENT: (see also "Assistance Agreement",
"Award"): An assistance agreement in which substantial EPA
involvement is anticipated during the performance of the project
(does not include fellowships). (Federal Grant and Cooperative
Agreement Act)
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31. COST: An amount as determined on a cash, accrual, or other basis
acceptable to the Federal awarding or cognizant agency. It does not
include transfers to a general or similar fund. (OMB Circular A-87)
32., COST ALLOCATION PLAN (CAP): Central service cost allocation
plan, public assistance cost allocation plan, and indirect cost rate
proposal. (OMB Circular A-87)
(a) "Central service cost allocation plan" - the documentation
identifying, accumulating, and allocating or billing the
allowable costs of services provided by a governmental unit on
a centralized basis to its departments/agencies as described in
Attachment C of OMB Circular A-87.
(b) "Public assistance cost allocation plan" - the documentation
identifying, accumulating, and distributing the allowable costs
of services provided by a public assistance agency/department
in support of all federal financial assistance programs
administered or supervised by that agency/department as
described in Attachment D of OMB Circular A-87. A narrative
description of the procedures that will be used in identifying,
measuring and allocating all administrative costs to all of the
programs administered or supervised by State public assistance
agencies as described in Attachment D of OMB Circular A-87.
(c) "Indirect cost rate proposal" - the documentation prepared by
a governmental unit or component thereof to substantiate its
request for the establishment of an indirect cost rate as
described in Attachment E of OMB Circular A-87.
33. COST OBJECTIVE: A function, organizational subdivision,
contract, grant, or other activity for which cost data are needed and
for which costs are incurred. (OMB Circular A-87)
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4. COST SHARING: (see also "Matching Funds") The portion of
allowable project costs that a recipient contributes toward completing
its project (i.e., non-Federal share, matching share). (40 CFR Part 30)
35. COST-TYPE CONTRACT: A contract or subcontract under a grant
in which the contractor or subcontractor is paid on the basis of the
costs it incurs, with or without a fee. (40 CFR Part 31)
36. DATE OF COMPLETION; The date on which all work under an
award is completed or the date on the award document, or any
supplement or amendment thereto, on which Federal sponsorship
ends. (40 CFR Part 30)
37. DECISION OFFICIAL; (see "Approval Official")
38. DEVIATION; Written approval from the Director, Grants
Administration Division for exception(s) from financial assistance
regulations not based on statutory or Executive Order requirements.
(Grants Administration Division)
39. DISALLOWED COSTS; Those charges to an award that the Federal
awarding agency determines to be unallowable, in accordance with
the applicable Federal cost principles or other terms and conditions
contained in the award. (40 CFR Part 30)
40. EQUIPMENT; Tangible, nonexpendable, personal property
including exempt property charged directly to the award having a
useful life of more than one year and an acquisition cost of $5,000 or
more per unit. However, consistent with recipient policy, lower limits
may be established. A recipient may use its own definition of
equipment provided that such definition would at least include all
equipment defined above. (40 CFR Parts 30 & 31)
10
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41. ENVIRONMENTALLY RELATED MEASUREMENTS; Any data
collection activity or investigation involving the assessment of
chemical, physical, or biological factors in the environment which
affect human health or the quality of life.
42. EXCESS PROPERTY; Property under the control of any federal
awarding agency that, as determined by the head thereof, is no longer
required for its needs or the discharge of its responsibilities. (40 CFR
Part 30)
43. EXEMPT PROPERTY; Tangible personal property acquired in
whole or in part with Federal funds, where the Federal awarding
agency has statutory authority to vest title in the recipient without
further obligation to the Federal Government. An example of exempt
property authority is contained in The Federal Grant and
Cooperative Agreement Act (31 U.S.C. 6306) for property acquired
under an award to conduct basic or applied research by a non-profit
institution of higher education or non-profit organization whose
principal purpose is conducting scientific research. (40 CFR Part 30)
44. EXPENDITURE REPORT;
(a) For non-construction grants, the SF-269 "Financial Status
Report" (FSR) (or equivalent report);
(b) For construction grants, the SF-271 "Outlay Report and
Request for Reimbursement" (or equivalent report). (40 CFR
Part 31)
45. FEDERAL AWARDING AGENCY; The Federal agency that
provides an award to the recipient. (40 CFR Part 30)
46. FEDERAL FUNDS AUTHORIZED; The total amount of Federal
funds obligated by the Federal Government for use by the recipient.
This amount may include any authorized carryover of unobligated
funds from prior funding periods when permitted by agency
regulations or agency implementing instructions. (40 CFR Part 30)
11
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47. FEDERAL SHARE OF REAL PROPERTY, EQUIPMENT, OR
SUPPLIES: That percentage of the property's acquisition costs and
any improvement expenditures paid with Federal funds. (40 CFR
Part 30)
48. FEDERALLY RECOGNIZED INDIAN TRIBAL GOVERNMENT;
The governing body or a governmental agency of any Indian Tribe,
band, nation, or other organized group or community (including any
native village as defined in Section 3 of the Alaska Native Claims
Settlement Act, 85 Stat. 688) certified by the Secretary of the Interior
as eligible for the special programs and services provided through the
Bureau of Indian Affairs. (OMB Circular A-87 & 40 CFR Part 31)
49. FINANCIAL STATUS REPORT (FSR): A standard, government
wide report recipients must submit to the Federal funding agency
that identifies the status of funds for a specific grant or cooperative
agreement. (40 CFR Part 31)
50. FUNDING PERIOD: (see also "Budget Period") The period of time
when Federal funding is available for obligation by the recipient. (40
CFR Part 30)
51. GOVERNMENT; A State or local government or a Federally
recognized Indian tribal government. (40 CFR Part 31)
52. GRANT: (see also "Assistance Agreement", "Award", "Cooperative
Agreement", "Grant Agreement") An award of financial assistance,
including cooperative agreements, in the form of money, or property
in lieu of money, by the Federal government to an eligible grantee.
The term does not include technical assistance which provides
services instead of money, or other assistance in the form of revenue
sharing, loans, loan guarantees, interest subsidies, insurance, 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. (40 CFR Part 31)
12
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53. GRANT AGREEMENT: (see also "Assistance Agreement") An
assistance agreement that does not substantially involve EPA in the
project and where the recipient has the authority and capability to
complete all elements of the program (does not include fellowships).
(40 CFR Part 30)
54. GRANT SPECIALIST: The EPA official designated in the assistance
agreement as EPA's administrative contact with the recipient. The
grant specialist provides administrative guidance to recipients and
Project Officers; reviews and approves the administrative portion of
the application; prepares the assistance agreement; evaluates
effectiveness/compliance with administrative conditions, and closes
out assistance agreements.
55. GRANTEE: (see also "Recipient") 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. (40 CFR Part 31)
56. INDIRECT COSTS: Costs
(a) incurred for a common or joint purpose benefiting more than
one cost objective and
(b) not readily assignable to the cost objectives specifically
benefitted without effort disproportionate to the results
achieved. (OMB Circular A-87)
57. INDIRECT COST RATE; A device for determining in a reasonable
manner the proportion of indirect costs each program should bear.
It is the ratio (expressed as a percentage) of the indirect costs to a
direct cost base. (OMB Circular A-87)
58. INDIRECT COST RATE AGREEMENT; An agreement between
the recipient and the cognizant Federal agency which identifies the
basis for the indirect cost rate. (Region 9)
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59. INDIRECT COST RATE PROPOSAL: The documentation
prepared by a governmental unit or component thereof to
substantiate its request for the establishment of an indirect cost rate
as described in OMB Circular A-87.
60. IN-KIND CONTRIBUTION; The value of a non-cash contribution to
meet a recipient's cost sharing requirements. An in-kind contribution
may consist of charges for real property and equipment or the value
of goods and services directly benefiting the EPA funded project. (40
CFR Part 30) note: the assistance amount may also include an EPA
in-kind contribution. (See "cost sharing" and "cash contributions.")
(Assistance Administration Manual)
61. INTEGRATED FINANCIAL MANAGEMENT SYSTEM (IFMS):
EPA's official automated accounting system.
62. INTERAGENCY/INTERGOVERNMENTAL
AGREEMENT/INTERNATIONAL AGREEMENT (IAG):
(a) a written agreement between Federal agencies under which
goods and services are provided in exchange for funds, or where
services are provided without payment.
(b) A written agreement between a Federal agency and a State or
local government under which the State or local government
reimburses the Federal agency 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.
(c) A written agreement between a Federal agency and a foreign
government under which work will be conducted for, or
services provided to, a foreign government or international
organization. (Grants Administration Division)
63. INTANGIBLE PROPERTY AND DEBT INSTRUMENTS: Means
(but is not limited to) trademarks, copyrights, patents and patent
14
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applications and such property as loans, notes and other debt
instruments, lease agreements, stock and other instruments of
property ownership, whether considered tangible or intangible. (40
CFR Part 30)
64. LOCAL GOVERNMENT; A county, municipality, city, town,
township, local public authority (including any public and Indian
housing agency under the United States Housing Act of 1937), school
district, special district, intrastate district, council of governments
(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. (OMB Circular A-
87 & 40 CFR Part 31)
65. MAINTENANCE OF EFFORT: A requirement contained in certain
legislation or regulations that a recipient must maintain/contribute a
specified level of financial effort in a specified area in order to receive
Federal assistance funds, which ensures that those Federal funds are
used to supplement, but not supplant, expenditures of the recipient's
funds. (Assistance Administration Manual)
66. MATCHING FUNDS: (see also "Cost Sharing") The portion of
allowable project costs a recipient contributes to a Federally funded
project (sometimes determined by statute). The match may include
in-kind as well as cash contributions. (Region 9)
67. NEGOTIATION; The process of give and take by assistance Project
Officers and applicants to agree on work plans and funds available to
carry out the work plan activities. (Region 9)
68. NONEXPENDABLE PERSONAL PROPERTY; Personal property
with a useful life of at least two years and an acquisition cost of $500
or more. (Assistance Administration Manual)
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69. OBLIGATIONS: The amounts of orders placed, contracts and
grants/subgrants awarded, goods and services received and similar
transactions during a given period that will require payment by the
grantee/recipient during the same or a future period. (40 CFR Parts
30 & 31)
70. OFFICIAL FILE; The administrative file for each assistance
agreement (or each application or unsolicited proposal) that is
established and maintained by the appropriate grants management
office and/or State office when provided for under a delegation
agreement. (The official technical file and the official financial
management file both complement the official administrative file.)
(Assistance Administration Manual)
71. OMB: The U.S. Office of Management and Budget.
72. OUTLAYS OR EXPENDITURES: Charges made to the project or
program. They may be reported on a cash or accrual basis. For
reports prepared on a cash basis, outlays are the sum of actual cash
disbursements for direct charges for goods and services, the amount
of indirect expense incurred [charged], the value of [third-party] in-
kind contributions applied, and the amount of cash advances and
payments made to contractors and subgrantees [subrecipients]. For
reports prepared on an accrued expenditure [accrual] basis, outlays
are the sum of actual cash disbursements [for goods and services], the
amount of indirect expense incurred, the value of [third-party] in-
kind contributions applied, and the new [net] increase (or decrease)
in the amounts owed by the grantee for goods and other property
received, for services performed by employees, contractors,
subgrantees/subrecipients, subcontractors, and other payees, and
other amounts becoming owed under programs for which no current
services or performance are required, such as annuities, insurance
claims, and other benefit payments. (A combination of OMB
Circulars A-102 & A-110; 40 CFR Part 35)
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73. OUTPUT: An activity or product which the applicant agrees to
complete during the budget period.
74. PERCENTAGE OF COMPLETION METHOD: A system under
which payments are made for construction work according to the
percentage of completion of the work, rather than to the
grantee's/recipient's cost incurred. (40 CFR Part 31)
75. PERSONAL PROPERTY:
(a) Property of any kind except real property. It may be tangible,
having physical existence, or intangible, having no physical
existence, such as copyrights, patents, or securities. (40 CFR
Part 30)
(b) 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. (40 CFR Part 30 & Assistance
Administration Manual)
76. PLANNING TARGET: The amount of financial assistance which the
Regional Administrator suggests that an applicant for Continuing
Environmental Program Support (State, interstate or local agency)
consider in developing its application and work program. (Assistance
Administration Manual)
77. PRICE ANALYSIS; The process of evaluating a prospective price
without regard to the contractor's separate cost elements and
proposed profit. Price analysis determines the reasonableness of the
proposed contract price based on adequate price competition,
previous experience with similar work, established catalog or market
price, law, or regulation. (Assistance Administration Manual)
78. PRINCIPAL INVESTIGATOR; (see "Project Manager")
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79. PRIOR APPROVAL: Documentation/written approval by an
authorized official evidencing consent prior to incurring specific cost.
(40 CFR Parts 30 & 31)
80. PROFIT; The net proceeds obtained by deducting all allowable costs
(direct and indirect) from the price. (Because this definition of profit
is based on applicable Federal Cost Principles, it may vary from
many firms' definition of profit, and may correspond to those firms'
definition of "fee".)
81. PROGRAM ELEMENT: One of the major groupings of outputs of
a Continuing Environmental Program (e.g., administration,
enforcement, monitoring). (Assistance Administration Manual)
82. PROGRAM INCOME:
(a) Gross income earned by the recipient that is directly generated
by a supported activity or earned as a result of the award (see
exclusions in paragraphs 30.24(e) and (h)). Program income
includes, but is not limited to, income from fees for services
performed, the use or rental of real or personal property
acquired under Federally-funded projects, the sale of
commodities or items fabricated under an award, license fees
and royalties on patents and copyrights, and interest on loans
made with award funds. Interest earned on advances of
Federal funds is not program income. Except as otherwise
provided in Federal awarding agency regulations or the terms
and conditions of the award, program income does not include
the receipt of principal on loans, rebates, credits, discounts, etc.,
or interest earned on any of them. (40 CFR Part 30)
(b) 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 allowances, 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
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have been generated without an award is not considered
program income. Such revenues include fines or penalties
levied under judicial or penal power and used as a means to
enforce laws. (Revenue from wastewater treatment
construction 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
facilities.) (Assistance Administration Manual)
83. PROJECT COSTS; All allowable costs, as set forth in the applicable
Federal cost principles, incurred by a recipient and the value of the
contributions made by third parties in accomplishing the objectives
of the award during the project period. (40 CFR Part 30)
84. PROJECT MANAGER: (see also "Principal Investigator") The
researcher, business officer, or other person authorized and
designated by the recipient to serve as its principal contact with EPA.
85. PROJECT NARRATIVE; (see "Work plan/Work program")
86. PROJECT OFFICER; The EPA official designated in the assistance
agreement as EPA's program contact with the recipient. Project
Officers are responsible for monitoring the project. (Assistance
Administration Manual)
87. PROJECT PERIOD;
(a) The period established in the award document during which
Federal sponsorship begins and ends. (40 CFR Part 30)
(b) The length of time EPA specifies in the assistance agreement for
completion of all project work. It may be composed of more
than one budget period. (Assistance Administration Manual)
88. PROPERTY; Unless otherwise stated, real property, equipment,
intangible property and debt instruments. (40 CFR Part 35; 40 CFR
Part 30)
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89. QUALITY ASSURANCE NARRATIVE STATEMENT; A
description included in an application which explains how precision,
accuracy, representativeness, completeness, and comparability will be
assessed, and which is sufficiently detailed to allow an unambiguous
determination of the quality assurance practices to be followed
throughout a research project. (Assistance Administration Manual)
90. 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: (a)
produce data of documented quality, and (b) provide for the
preparation of Quality Assurance Project Plans and standard
operating procedures. (Assistance Administration Manual)
91. QUALITY ASSURANCE PROJECT PLAN; An organization's
written procedures which delineate how it produces quality data for
a specific project or measurement method. (Assistance
Administration Manual)
92. REAL PROPERTY; Land, including land improvements, structures
and appurtenances thereto, excluding movable machinery and
equipment. (40 CFR Parts 30 & 31; Assistance Administration
Manual)
93. RECIPIENT; (see also "Grantee")
(a) An organization receiving financial assistance directly from
Federal awarding agencies to carry out a project or program.
The term includes public and private institutions of higher
education, public and private hospitals, and other quasi-public
and private non-profit organizations such as, but not limited to,
community action agencies, research institutes, educational
associations and health centers. The term may include
commercial organizations, foreign or international
organizations (such as agencies of the United Nations) which are
recipients, subrecipients, or contractors or subcontractors of
20
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recipients or subrecipients at the discretion of the Federal
awarding agency. The term does not include government-
owned contractor-operated facilities or research centers
providing continued support for mission-oriented, large-scale
programs that are government-owned or controlled, or are
designated as Federally-Funded Research and Development
Centers. (40 CFR Part 30)
(b) Any entity which has been awarded and accepted an EPA
assistance agreement. (Assistance Administration Manual)
94. RECURRENT EXPENDITURES; Those expenses associated with
the activities of a Continuing Environmental Program. All
expenditures, except those for equipment purchases with a unit
acquisition cost of $5,000 or more, are considered recurrent unless
justified by the applicant as unique and approved as such by the
Award Official in the assistance award. (Assistance Administration
Manual; 40 CFR Part 35)
95. RENEWAL: (see also "Continuation Award") An extension for an
additional funding/budget period for a project having no projected
completion date, but for which Federal support must be renewed
each year. (Assistance Administration Manual)
96. RESEARCH AND DEVELOPMENT: All research activities, both
basic and applied, and all development activities that are supported
at universities, colleges, and other non-profit institutions. "Research"
is defined as a systematic study directed toward fuller scientific
knowledge or understanding of the subject studied. "Development"
is the systematic use of knowledge and understanding gained from
research directed toward the production of useful materials, devices,
systems, or methods, including design and development of prototypes
and processes. The term research also includes activities involving
the training of individuals in research techniques where such
activities use the same facilities as other research and development
activities and where such activities are not included in the instruction
function. (40 CFR Part 30)
21
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97. SERVICES: A contractor's labor, time, or efforts which do not
involve the delivery of a specific end item, other than documents,
(e.g., Reports, design drawings, specifications). This term does not
include employment agreements or collective bargaining agreements.
(Assistance Administration Manual)
98. SHARE: When referring to the awarding agency's portion of real
property, equipment or supplies, share means the same percentage as
the awarding agency's portion of the acquiring party's total costs
under the grant to which the acquisition cost of the property was
charged. Only costs are to be counted — not the value of third-party
in-kind contributions. (40 CFR Part 31)
99. SMALL AWARD: A grant or cooperative agreement not exceeding
the small purchase threshold fixed at 41 U.S.C. 403(11) (Currently
$100,000). (40 CFR Part 30 and 40 CFR Part 31)
100. STATE: Any of the several States of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency or instrumentality of
a State exclusive of local governments. The term does not include any
public and Indian housing agency under United States Housing Act
of 1937. (OMB Circular A-87)
101. CONTRACT: 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. Subagreements include contracts and
subcontracts for personal and professional services, agreements with
consultants, and purchase orders. (Assistance Administration
Manual)
102. SUBAWARD: An award of financial assistance in the form of
money, or property in lieu of money, made under an award by a
recipient to an eligible subrecipient or by a subrecipient to a lower
tier subrecipient. The term includes financial assistance when
22
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provided by any legal agreement, even if the agreement is called a
contract, but does not include procurement of goods and services nor
does it include any form of assistance which is excluded from the
definition of "award". (40 CFR Part 30)
103. SUBGRANT: An award of financial assistance in the form of money,
or property in lieu of money, made under a grant by a grantee to an
eligible subgrantee. The term includes financial assistance when
provided by contractual legal agreement, but does not include
procurement purchases, nor does it include any form of assistance
which is excluded from the definition of grant in 40 CFR Part 31. (40
CFR Part 31)
104. SUBGRANTEE: The government or other legal entity to which a
subgrant is awarded and which is accountable to the grantee for the
use of the funds provided. (40 CFR Part 31)
105. SUBRECIPIENT; The legal entity to which a subaward is made and
which is accountable to the recipient for the use of the funds
provided. The term may include foreign or international
organizations (such as agencies of the United Nations) at the
discretion of the Federal awarding agency. (40 CFR Part 30)
106. SUPPLIES:
(a) All tangible personal property other than equipment as defined
in 40 CFR Part 31. (40 CFR Part 31)
(b) AH tangible personal property excluding equipment, intangible
property, and debt instruments, and inventions of a contractor
conceived or first actually reduced to practice in the
performance of work under a funding agreement ("subject
inventions"), as defined in 37 CFR 401, "Rights to Inventions
Made by Nonprofit Organizations and Small Business Firms
Under Government Grants, Contracts, and Cooperative
Agreements." (40 CFR Part 30)
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107. SUSPENSION:
(a) An action by a federal awarding agency that temporarily
withdraws Federal sponsorship under an award, pending
corrective action by the grantee/recipient or pending a decision
to terminate the award by the Federal awarding agency.
Suspension of an award is a separate act from suspension under
Federal agency regulations implementing E.O.s 12549 And
12689, "Debarment and Suspension." (40 CFR Part 30)
(b) Depending on the context, either (1) temporary withdrawal of
the authority to obligate 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 Official in
accordance with agency regulations implementing E.0.12549
to immediately exclude a person from participating in grant
transactions for a period, pending completion of an
investigation and such legal or debarment proceedings as may
ensue. (40 CFR Part 31)
108. TERMINATION:
(a) Permanent withdrawal of the authority to obligate previously
awarded grant funds before that authority would otherwise
expire. It also means the voluntary relinquishment of that
authority by the grantee or subgrantee. Termination does not
include: (1) withdrawal of funds awarded on the basis of the
grantee's underestimate of the unobligated balance in a prior
period; (2) withdrawal of the unobligated balance as of the
expiration of a grant; (3) refusal to extend a grant or award
additional funds, to make a competing or noncompetihg
continuation, renewal, extension, or supplemental award; or (4)
voiding of a grant upon determination that the award was
obtained fraudulently, or was otherwise illegal or invalid from
inception. (40 CFR Part 31)
(b) The cancellation of Federal sponsorship, in whole or in part,
under an agreement at any time prior to the date of completion.
(40 CFR Part 30)
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(c) The cancellation of an assistance agreement, in whole or in part,
before the scheduled project completion date. The recipient is
entitled to be paid the EPA share of allowable costs incurred up
to the date of termination and of allowable costs related to non-
cancelable commitments made prior to termination.
(Assistance Administration Manual)
109. TERMS OF A GRANT OR SUBGRANT: AH requirements of the
grant or subgrant, whether in statute, regulations or the award
document. (40 CFR Part 31)
110. THIRD PARTY IN-KIND CONTRIBUTIONS:
(a) The value of non-cash contributions provided by non-Federal
third parties. Third party in-kind contributions may be in the
form of real property, equipment, supplies and other
expendable property, and the value of goods and services
directly benefiting and specifically identifiable to the project or
program. (40 CFR Part 30)
(b) Property or services which benefit a Federally assisted project
or program and which are contributed by non-Federal third
parties without charge to the grantee, or a cost-type contractor
under the grant agreement. (40 CFR Part 31)
111. TOTAL COST; Total cost of Federal award is comprised of the
allowable direct cost of the program, plus its allocable portion of
allowable indirect costs, less applicable credits. (OMB Circular A-87)
111. UNEXPENDED FEDERAL FUNDS; (see also "Unobligated
Balance") Federal funds obligated but not yet disbursed. Represents
the difference between the amount of EPA funds awarded to the
recipient of an assistance agreement and the amount EPA has paid
that recipient. (Assistance Administration Manual)
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112. UNLIQUIDATED OBLIGATIONS:
(a) For reports prepared on a cash basis -- the amount of
obligations incurred by the grantee that have not been paid.
For reports prepared on an accrued expenditure basis, they
represent the amount of obligations incurred by the grantee for
which an outlay has not been recorded. (40 CFR Part 31)
(b) The portion of the funds authorized by the Federal awarding
agency that has not been obligated by the recipient and is
determined by deducting the cumulative obligations from the
cumulative funds authorized. (40 CFR Part 30)
(c) An obligation for which payment has not been made;
contingent liabilities for contracts and orders outstanding.
(Assistance Administration Manual)
113. UNOBLIGATED BALANCE: The portion of the funds authorized
by the federal awarding agency that has not been obligated by the
grantee/recipient and is determined by deducting the cumulative
obligations from the cumulative funds authorized. (40 CFR Parts 30
&31)
114. UNOBLIGATED FEDERAL FUNDS: Federal funds that the
recipient has not spent; the difference between the amount of EPA
funds awarded to the recipient of an assistance agreement and the
EPA share of the project obligations that the recipient has incurred
under that agreement. (Assistance Administration Manual)
115. UNRECOVERED INDIRECT COST: The difference between the
amount awarded and the amount which could have been awarded
under the recipient's approved negotiated indirect cost rate. (40 CFR
Part 30)
116. UNSOLICITED PROPOSAL: An informal written offer to perform
EPA funded work for which EPA did not publish a solicitation. (40
CFR Part 30; Assistance Administration Manual)
26
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117. VIOLATING FACILITY: Any facility that is owned, leased, or
supervised by an applicant, recipient, contractor, or subcontractor
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. (40 CFR Part 30;
Assistance Administration Manual)
118. VOLUNTARY EXCLUSION: A term of settlement in lieu of a
finding for debarment under which a person or entity agrees to
voluntarily abstain from participation in EPA assisted projects.
(Assistance Administration Manual)
119. WORKING CAPITAL ADVANCE: A procedure whereby funds are
advanced to the recipient to cover its estimated disbursement needs
for a given initial period. (40 CFR Part 30)
120. WORK PLAN/WORK PROGRAM: (see also "Project Narrative")
The document which identifies how and when the applicant will use
program funds to produce specific outputs. (40 CFR Part 35;
Assistance Administration Manual)
27
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' 198
From the desk of:
TEAM LEADER
GRANTS AND CONTRACTS MANAGEMENT BRANCH
TO: Region 2 Project Officers
Re: Modifications to the Project Officer Manual
Attached are revised pages to the Project Officer Manual (Managing Your Financial
Assistance Agreement; Project Officer Responsibilities). The manual was revised to include
information on EPA's Small Grants Policy that was issued on September 1, 1998. Please
replace the Table of Contents, pages 2.22 through 2.25 of Module II and insert EPA Order
5700.2 (Small Grants Policy) as Appendix V in your manual with the attached pages.
The purpose of the Small Grants Policy is to simplify and improve the administration of small
grants and cooperative agreements (SIQQ^QO or less) without compromising accountability.
The Policy becomes effective for, new grants awarded on or after October 1, 1998. GCMB will
provide additional information as we implement the Small Grants Policy in Region 2.
Attachments
CC: $qnna Vizian, Chief, GCMB
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TABLE OFCONfENTS?
MODULE I
MODULES
MODULE ill
MODULE IV
MODULE V
MODULE VI
MODULE VII
MODULE VIII
BACKGROUND
REQUIREMENTS GOVERNING,
ASSISTANCEAGREEMENES;
RREAPPLIGATTON/APPLIGATION^
PHASE
AWARD PHASE
PROJECT ADMINISTRATION AND
MANAGEMENT PHASE
CLOSEOUT PHASE
AUDIT
INTERAGENCY~AGREEMEfltrS~
APPENDIX A- FEDERAL^GRANTrANDlCODPERATIVE
APPENDIX BF
POtlCY FOFFD1STINGUISH1NG BETWEEN
ASSISTANCE AND ACQUISITION
APPENDIX C EPA INVOLVEMENT IN^GRANTEE
UNDER GRANTS^ANDXJOBPEfSCTVE
AGREEMENTS^
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APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
APPENDIX H
APPENDIX I
APPENDIX J
APPENDIX K
APPENDIX L
40 CFR PART 30, "GRANTS AND
AGREEMENTS WITH INSTITUTIONS OF
HIGHER EDUCATION, HOSPITALS, AND
OTHER NON-PROFIT ORGANIZATIONS"
40 CFR PART 31, "UNIFORM ADMINISTRATIVE
REQUIREMENTS FOR GRANTS AND
COOPERATIVE AGREEMENTS TO STATE AND
LOCAL GOVERNMENTS"
LIST OF EPA ASSISTANCE PROGRAMS
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APPENDDCM
ENTERPRISES (DBE)
APPENDIX N POLICY ON THE
APPENDJX^O-
APPENDIX P
APPENDIX Q
APPENDIX R
APPENDIX S
APPENDIX T
APPENDIX U
APPENDIX V
ASSISTANCE FUNDS^OR'COWJNUING
ENVIRONMENTAL PROGRAMS
STATBGRANT GUIDANCE, "INTEGRATION'QF
POLLUTION PREVENTION"-
SF: 424rifAPPt:lCATfON FORMT
OFFICIAL PROJEGTAND GMOTILES:
CLOSEOUT POLICY FOR ASSISTANCE
AGREEMENTS
EPA ORDER 2200.4, "REVIEW PROCESS TOR
SCIENTIFIC, INFORMATIONAL AND
EDUCATIONAL DOCUMENTS"
SAMPLE INTERAGENCY AGREEMENT
AGREECTENTS7AWARO ED TO- NONPROFIT
ORGANIZATTONS ANDLEDUCATIOWAL-
EPA ORDER 5700.2, "IMPLEMENTATION
ORDER TO STREAMLINE SMALL GRANTS
SUBJECT INDEX
GLOSSARY
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EPA ORDERS, POLICIES
RECYCLEDPAPER"
ASSISTANGE^/S. ACQUISITION^
STREAMLINING SMALL GRANTS?
PERFORMANCE-: BASED ASSISTANCE :
USE OF. DISADVANTAGED BUSINESS ENTERPRISES
TIMELYAWARD13Fy»SSISTANCElPObLUTI0N«PREV£NTION*
GUIDANGEf:
VIEWGRAPHfclS.
TITLE!; EPA Orders^ Pol iciesrand Guidance a
KEY POINTS:
• EPA Orders and policies are^gencyfequirementsjssuediby £PA~
Headquarters. Regions may-also issue regional policies'end -guidance
consistent with Headquarters policies and guidance issued by EPA's
National Program Managers (NPM). Regions may alsoissue guidance
to implement EPA Orders, policies, or guidance.
• The following are the major Orders, policies, and -guidance -issuances
affecting assistance administration.
EPA ORDERS
Recycled Paper
• EPA's policy on recycled'pape&is in EPAK3rtler*t4c&j1 000:25 ^Useaof
Recycled Paper.- Issued onvJaauary 24/1 999:ancUasframended-orr
April :1 2,<.1 990, thisconcter--wa99developBd4o-pcx)mote^theiJse of recycled
paper; Specifically^it requireafiew contracts^nd^ssistance-
agreementstto^peeify^hfatM^portSKleiiveredrto EPAMn'Conjunction with
EBA^x3rrtractssor«ssistajxMeegj^ements'fnust berprintedBn recycled
paper (even if recycled -papems^more -costly). (See Appendix 1 )
Acquisition vs Assistance ^
• EPA's Order on the use of assistance agreements versus acquisition
(5700.1) is discussed in Module -1. This Order^see Appendix B)
describes when it is proper to use an assistance agreement and when a
contract is required.
10/1/96 2.22.
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VIEWGRAPH #15 (Continued)
TITLE: EPA Orders, Policies, and Guidance
KEY POINTS:
Funding Assistance Agreements
• 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 J for the 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.
Streamlining Small Grants
• To simplify and improve administration of small grants and cooperative
agreements without compromising standards of accountability. See
Appendix V.
EPA POLICIES .
Carryover of Unobligated Balances
• To EPA's policy on carryover of unobligated balances is .covered jn ERA
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 maybe
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 Appendix K.)
- 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.
10/1/96 2.23
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VIEWGRAPHtftS (Continued)
TITLE: EPA Orders, Policies, and Guidance
KEY POINTS:
Performance- Based Assistance
• EPA's performance- based -assistance-policy, issued May 31 , ,1 985,
establishes.agency>wide^cedures^fornegotiatingand2overseeingx:
assistance--agceements.Jt^ndud6s.guidelines fon (1 ) assessing r
perfoiTTianc^-v^Zl^ewarding^ccDmplishments, (3):correcting,prDbIemsr^
and (4) imposing penalties. (Sfee-Appendix L.) WhiJeihe-pDJicy applies*
to Continuing.,BMronrnental:(Pf0^rTrGrants, thesggidelines mayiea-
helpful to other programs^:
Disadvantaged Business Enterprises-
• EPA's requirements on the use of disadvantaged -business -.
enterprises (DBE) are contained in two EPA plans. (See Appendix Ivl)
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 2.6. 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€PA
establish a minimum 8% goal for the use of DBEs in contracts awarded
under all other assistance agreements.
• In additionlo the-two plansj-EPA^s requirements onllre use-otDBEssaie
contained in^Q;CFR30.44f b)Xfor.;universities andiother -nonprofits);^^:
CFR 31 ;36^(e).(for States, locaJ^govemments, and-Jndian tribes); and 40
Superfand recipients).
Timely Awaud-r
• TReiimelyrewardpolicy.(uPolicy--orrthe^nmely Award:of Assistance
Funds^forCbntinuing 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)
10/1/96 2.24
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VIEWGRAPH #15 (Continued)
TITLE: EPA Orders, Policies, and Guidance
KEY POINTS:
EPA GUIDANCE
Pollution Prevention
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 0.) 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.
10/1/96 2.25
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APPENDIX V
EPA ORDER 5700.2
IMPLEMENTATION ORDER TO
STREAMLINE SMALL GRANTS
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Classification No: 5700.2
Approval Date:- 9/1/38, . •
I . PURPOSE. To simplify and improve admifflstration of small grants andcoopctativeagfeements,vdlhout.r.
compromising standards of accountability.
2. APPLICABILITY. This order applies to all grants and cooperative agreements (hereinafter referred lo as
small grants" or "grants") SI 00,000 o'rless in Federal funds; have budget^uidprojcctpEriodswMcn-aretjfthe-same
duration; and for which the totalamount of Federal grant funds is obligated at the time of-award.-Thist)rderdocs
not apply to the following: Performance Partnership "grants'; Fellowship ^rants;doans;'^enior £nvuonmiental
Employment (SEE) Program Cooperative Agreements; Environmental Program Grants to^tate^TntcrstateandLocal
agencies; ConstnictibnGi^ts;SuperIulttdQ>^^
the State Revolving Fund Program Capitalization Grants.
•.<•'. • '
This order does not relieve recipients from complying with any statutet>r^egulafion>_ThJcjoiider .clarifies
situations when a more flexible approach can Hbc -used if a-£rant^ward4s^lO{l,<}OQ;^^
submission of an application by a small grant recipient as thd'applicant's assuranoftthatitiwintocetthe following
criteria:
(I) a sarisfaotoiyjerfomaaoegcooi^ •
• * . •"• •
<^^
(3) .technical qualifications, experience, organization, and facilities -adequate to cany out' the
project, or a demonstrated ability to obtain these.-
* ' '
Agency officials must comply with-this pfderninless tiw applicant/recipient is a high risk grantee under 40
CFR 31.12 or is subject to special -award xx>nditibns under-40 CFR^O.14.
3. EFFECTIVE DATE. Tbis policy is effective for all new grants awarded on or after October 1, 1998.
•* *
4. BACKGROUND. The number.of Ep A ^grant programs has increased five-fold overtfie past tctty ears with
a dramatic increase in graot awards .of S 100*000 or less on average. These small awards account forabbut 50% of
new project grant awards, but less than^%of
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EPAOrder ' • 5700.2
' 9/1/98
Current practice subjects all grant awards regardless of the dollar amount to the same administrative
requirements and procedures. This order reduces the administrative burden for both the EPA arid :the
applicant/recipient while maintaining sufficient accountability. 'Its intent is to increase customer satisfaction $od
to focus EPA's limited resources on larger dollar grant programs. . ^
5. DEFINITIONS. • .
a. Advance Payment. A payment made by Treasury check or other, appropriate payment
mechanism to a recipient either before outlays are made by the recipient or through the use of pre-
determined payment schedules.
b. Approval Official. An EPA official delegated the authority to approve or reject applications
for assistance and the techrucal/programmatic terms and conditions of proposed assistance projects.
c. Award Official. The EPA official with the authority to execute assistance agreements^and
to take other actions authorized by 40 CFR Chapter I, Subchapter A and by EPA Orders.
d. Funding Recommendation. Decision and Approval Packaee. The EPA Program Office's
memorandum containing the decision and justification to fund an* assistance .proposal -jphe
memorandum is sent to the Grants Management 'Office (GMO) as part of the assistance funding
package. (See attached suggested Model Funding Recommendation, Decision'•and "Approval
Package). '
*i ' • • "•
e. " Indirect Cost Rate Proposal. .The documentation prepared by an organization ^substantiate'
its claim for the reimbursement of indirect costs.
f. . Supplemental Funding. Additional funding over and above what was'TigreetlTrptTn^rtbc
grant agreement for a given.budget period. • .'
5. POLICY. This order establishes simplified and^streamlined policies for small grants. Receiptof-asmall
grant does notrelieve the applicant/recipient from compliance with any statute, circularxarregula.tion.iu'faitlg
of this new approach, EPA establishes the following for Small Giants: •
a. • Limitation on Number of-Application'Copies Required for Submission. Applicants are
required to submit only the original application and one copy to EPA unless otherwise required by.
• the regulations. • . • . • .
< • •
b. • Abbreviated WoTkplan and Resume. TTae narrative workplan should not exceed five pages
in length. The workplan must include a: '
1) summary of specific objectives, expected outcomes and deliverables; and '
2) discussion of the budget and how the budget relates to the objectives,
outcomes and deliverables in the workplan. • .
•' •*•."**. •"
• 'Resumes and supplementary "biographical information, if any, should not exceed an
additional two pages.
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57002"
98*98?
c. ftudget. Applicants arc not required to submit supporting.budget detail over andbeyondthc
object class categories identified on the applicant's Form 424A (formal 1wdgetpage)*THe-EE2£_
Program Office should base the reasonableness of the cost of the grant on its evaluation ofsthe-
workplan, using its technical knowledge and previous experience with similar work; The wbrkplan -
should stand on its own merit in support of project costs. If the Program Office is unable to make
a determination solely on tHis basis, it should first request additional information on how -the
workplan supports the budget- However, ihere may be some circumstances where evaluating the
workplan. TKpse.;applicantsirequesting -
reimbursement for indirect costs -andjwht)vd6«ioX haveBn-established indirebtcostratewith'feiEedisral;.
agency must prepare an Iridirc'ct : Cost Rate Proposal -but?are only required-to retainirin^etritles,
subject to audit The proposal -must be based on.gujdan(»,in*heEPARecommendalioni|Prbcess» Grants -Management aOfficesrlshould
streamline meir-rFimding*/Reoonmiendafo^
•
andApprovali'acIcage.
w^
i
reguiattttyerequircmentsshaUlje cuminatiytfJivitfe?td;t
of theT^evarit^iegulatory-Tequircmenlsr- However; .terms. and condifions^detaUing.-reporting
requirements may be included in the assistance agreement at the discretion of the GMO or Program
Office.-- ' ' ' . • . • '
K. Limitation on^Length of Award-Document The .GMO will ensure that the EPA* award
document will, to the maximum extentpossible, not exceed four pages in length.
• *
i. Payment Policy. •.'..,
(1) -AU-SmairtGrant ^Recipients. GMOs, will: work with Program Offices and:
. ScrYicihgrFiiiancc^ffiixs40tensur^smaUvgra^ To
ensure expeditious^reimbuisttnentof payment requests, recipients of small grants
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EPA Order . " . 5700.2
9/1/98
should submit requests for payment directly to the EPA Servicing Finance Office.
Recipients shall be reimbursed for grant-jrelatcd eligible, allocable, allowable, and
reasonable costs up to die amount of the grant which have been incurred and which
the recipients arc currently and legally obligated to pay. Project Officers and GMOs
shall monitor grantee performance and compliance with applicable rules, and when
appropriate, may recommend withholding or requiring prior approval of future, grant ' •
payments. " . •
(2) Small Grants S5.000 or Less. Recipients of small grants up to and including
. S5,000 may request an advance payment of up to eighty (80) percent of the total
Federal share of the project by submitting a Request for Advance or Reimbursement
(Form SF-270) upon acceptance of the.assistance agreement The remaining twenty
(20) percent will be reimbursed to the recipient upon satisfactory completion of the
Final Project Report and Final Financial Status Report ' .
j. Simplified Minority Business Enterprise/Women's Business Enterprise^.Reporting
Requirements. Small Grant recipients av/arded assistance agreements under 40 CFTCTarODXi.e-.
Institutions of Higher Education, Hospitals and other Non-Profit Organizations) will meet
MBE/WBE reporting requirements by submitting xi MBE/WBE Utilization Form {Standard Form
5700-52A) origan annual basis. The reports are due within one month after the-end of .the Federal
fiscal year. • ' • '
Small Grantrecipients awarded assistance agreements under 40 CFRPart31^5.e.,Tkatearinfomancewiuithe'appropriatec^^
requirements of this policy. Further, recipients may be reimbursed for preraward costs they incur
.. 90 days prior to award provided they include such costs in the application and the application in its
entirety'is approved by EPA. . . .... *• .
7. " ROLES AND RESFONSIBtLnJES. Inadditionto the roles and responsibilities cited in Section 5, "Policy",
the following "are actions the Grants Management Office, Program Office and recipient are expected to take:
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5700.2..
• srimr
a. ' Grants Management Orhce.
(I) Develop and distribute application kits,
(2) Provide the same level of advice, technical assistance and guidance to
potential applicants and small award recipients as they would to any other recipients.
• #
(3) Ensure^application.includes all essential.information (erg,-; assurances,
certifications, narrative).
(4) Ensure'thatall elements oftheapplicationand funding package comply with
EPA's legal and regulatory requirements:-
(5) Review application and determine eligibility of EPA assistance recipientsto
receive indirect costs. *• o
(6) Determine that the grantee has sound financial management ''
(7) Prepare awards/amendments. .
(8) Monitor the financial and management aspects of awards through reviews of
• reports, correspondence, site visits, or other appropriate means.
(9) Ensure timely close out of awards when all project work in the agreement is
completed! . •
b.- ' Program Office.
(1) . Ensure :applican&&WBi^aasieas6na^
^
that foster accountabflityr-' . " ''cr;;!CV
(2)* DctcniaSneJthatthbiaHplac^
' - ' .- <-,.*•": . . .-...v ^r»- ..- , -..; ..,.,jj\> ;
(3) Review &e workplan and- budget (along, wim the GMO) to; determine.
appropriateness and reasonableness of the project, whether-diey comply witH^
program regulations and guidelines, and identify, any deficiencies in the application.
(4) If the proposal is approved, prepare and forward a funding recommendation,
which consists of the following primary documents:
", • • • . .
1) .Commitment Notice (EPATorm 2550-9), and • • •
.*_'_. • •
2) , ^ Decbion Documeatation
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•
,,,(5) Monitor the recipient's progress on the project.
(6) Conduct periodic reviews 'to assure that the recipient is complying with
applicable regulations and programmatic teems and conditions of die agreement.
" (7) Ensure that any/all delivcrables required under the award are received,'end
arc acceptable in a timely manner. .
Recipient
(1) Expend and account for funds in accordance with the assistance agreement,
program regulations and statutes." .
'(2) Maintain sound fiscal management. • . ^e
••/
(3) Comply with all applicable reporting requirements, including submitting
. timely Financial Status Reports, Final Technical Reports, Property -Reports and
MBE/WBE Reports. .
8- ADDITIONAL REFERENCES. • ' .
. '• ? a, iiFfederal Grant and Cooperative Agreement Act of 1977 (FGCAA), 3KJ.S:Cv$630 1-6308.
b. 40 CFR Parts 30, 3 1,35, 40, 45, and 47.
• c:-f< OMB Circular A-l 10,
d. • OMB Circular A-102.
c. OMB Circular A-133
; £ OMB Ci^bilar A-87 .
'
, iL EPA-Manafflns Your financial Assistance Agreement - Project Officer Responsibilities.
'-. L ' EPA 96-1 IndirectjCost Policy forNopprofiCOrganl^ofis and Educational Institutions.
/ 9. FORFiJRTOER'thffORMA'tTOR For furuaer infpmwtion regarding this Order, please contact
,\ Chief, Policy, InFormation and Training Branch, Grants Administration Division, on i
' -' -
10. APPROVMG SIGNATORE
; Director ( • . . ...„ . •' -*.,- ...1-™^—"":;" Date
: of fe&iman Resources aiKi Organizational Services „ ^ ' •
U:
„ -r?
,-»--": r
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