oEPA
United St
Environmental Protection
Agency
Office of
Solid Waste and
Emergency Response
DIRECTIVE NUMBER:
TITLE- STATE PART^IPATI
- Volume 1:
9375.1-4-C
IN THE SUPERFUND PROGRAM,
1x C - Documenting State CERCLA
December 31s 1
December 31,
OERR/HSCD/SRCB
and Advance Match
APPROVAL DATE:
EFFECTIVE DATE:
ORIGINATING OFFICE:
ft FINAL
D DRAFT
STATUS:
REFERENCE (other documents):
9375.1-4 STATE PARTICIPATION IN THE SUPERFUND PROGRAM,
Volume 1
OSWER OSWER OSWER
VE DIRECTIVE DIRECTIVE Dl
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&EPA
United States Environmental Protection Agency
Washington, OC 20460
OSWER Directive Initiation Reauest
1. Directive Number
9375.1-4-C
2. Originator Information
Name of Contact Person
Deborah Swichkow
Mail Code
WH-548-E
Office
OERR/HSCD/SRCB
Telephone Number
(202) 382 2453
3. Title
STATE PARTICIPATION IN THE SUPERFUND PROGRAM, Volume 1: Appendix C: Documenting
State CERCLA Credits and Advance Match
I. Summary of Directive (Include brief statement of purpose!
Provides guidance on the identification and application of. CERCLA section 104(c)(3)
credits and advance match funds towards a State's cost share for response actions.
5. Keywords
Superfund. CERCLA. Cooperative Agreements. Credit, Advance Match
6a. Does this Directive Supersede Previous Directives)? fX| Yes (_J No What directive (number, title)
9375.1-4-C, Same title, 5/2/86
b. Does It Supplement Previous Directives)? ^ Yes Q No What Directive (number, trtlef
9375.1-4 State Participation in the Superfund Program, Volume 1
..Draft Level
LJ A — Signed by AA/DAA LJ 8 — Signed by Office Director Lj C — For Review & Comment LJ
In Development
his Request Meets OSWER Directives System Format
8. Signature of Lead Office DirectivesJoordinator
I. NameTSnd Title of Approving I
Sam Morekas, Chief, State & Regional Coordination Branch
Data
JAN 9
Date
12/31/86
OS WER OS WER OS WER
DIRECTIVE DIRECTIVE
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f l UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
9375.1-4-C
OFFICE OF
SOLID WASTE AND EMERGENCY RESPONSE
PEC 3 I 1986
MEMORANDUM
SUBJECT: Addendum to the manual State Participation in the
Superfund Program -- Appendix C, "Documenting State
CERCLA Credits and Adva^cd Match"
/ /(
FROM: Sam Morekas, Chief >O • /^/M
State and Regional P'oordi nation Branch
Hazardous Site Control Division
TO: Maili ng List
The attached Appendix C, "Documenting State CERCLA Credits
and Advance Match" has been revised to reflect that the Federal
obligation during the use of State credits should include both
the 90% Federal share and funds to cover the amount of State
credit being applied to the State's cost share. The revisions
also include information on the application of advance match as
credit for the State's cost share.
Appendix C that you currently have should be discarded and
replaced with this revised Appendix C.
Attachment
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APPENDIX C
DOCUMENTING STATE CERCLA CREDITS
AND ADVANCE MATCH
OSWER DIRECTIVE
9375.1-4-C
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12/31/86
9375.1-4-c
APPENDIX C
DOCUMENTING STATE CERCLA CREDITS AND ADVANCE MATCH
PURPOSE
This appendix provides guidance on the identification
and application of CERCLA section 104(c)(3) credits and
advance match funds toward a State's cost-share for re-
sponse actions. It is intended for the use of RPMs, Re-
gional staff members, and SPOs. The material presented
here represents current EPA policy and procedures and re-
places previously issued guidance that did not reflect
delegation of responsibilities to the Regions. The new
credit provisions of the Superfund Amendments and Reauthor-
ization Act (SARA) are not discussed in this appendix.
Guidance on these provisions will be issued at a later
time. In the interim, questions on these new requirements
should be directed to the appropriate EPA Headquarters Re-
gional Coordinators.
APPENDIX SUMMARY
This appendix is organized into two sections:
Credits
Advance Match.
Each section presents background information on the subject
being discussed, explains the procedures the State can use
to obtain credit or advance match, and details tracking
mechanisms. In addition, each section contains Cooperative
Agreement application budget sheets demonstrating the ap-
propriate manner in which to display credits and funds pro-
vided as advance match.
C-l
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12/31/86
9375.1-4-c
1. CERCLA CREDITS
CERCLA section 104(c)(3)(C) provides that EPA shall
grant a State or political subdivision credit for direct,
out-of-pocket expenditures or obligations of non-Federal
funds for hazardous waste response activities between
January 1, 1978, and December 12, 1980, if any. The State
then may apply verified credits to its share of costs for
remedial activities conducted under response agreements for
the same NPL site.
A. Credit Submission
It is the State's responsibility to identify potenti-
ally creditable expenditures or obligations and to notify
EPA in writing that a CERCLA credit exists for a site.
This should be done as soon as the site is placed on the
NPL. In its notification the State should provide the fol-
lowing information:
Specific amounts claimed for credit, by site (es-
timated amounts are unacceptable), based on sup-
porting cost documentation
Units of government (State agency, county, local)
that incurred the costs, by site
Brief description of the specific function per-
formed by each unit of government at each site
Certification (signed by the State's fiscal man-
ager or the financial director for each unit of
government) that credit costs have not been previ-
ously reimbursed by the Federal government or any
other party, and have not been used for matching
purposes under any other Federal program or grant.
Based on the information the State provides, EPA may accept
the credit at face value, pending an audit to verify the
eligibility and allowability of identified credit costs.
Upon receipt of the State's credit submission in the
Regional office, the RPM is responsible for ensuring that
it is complete. This may entail obtaining additional in-
formation or returning the submission to the State for re-
vision, if necessary. As soon as the State's submission
fulfills the above criteria, the RPM should provide one
copy to the appropriate EPA Divisional Inspector General
C-2
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12/31/86
9375.1-4-c
for Audit (DIGA) so that an audit can be scheduled and one
copy to the Regional Financial Management Officer (FMO) for
tracking purposes.
The DIGA is responsible for auditing credit submissions
to verify the actual dollar amount expended or obligated.
Procedures used in this audit are similar to those des-
cribed in Chapter IX of this manual. Documentation main-
tained in the State's files will be used during the credit
verification audit. In general, supporting documentation
necessary for credit verification is the same as the docu-
mentation required to support a Federally funded assistance
agreement. (See 40 CFR Part 30 and Appendix U of this
manual.)
B. Application of CERCLA Credit Toward the State's Cost
Share ;
When a State-lead remedial action is contemplated at a
site that has an unverified or verified credit, the State
must indicate its intention to apply the credit against its
required cost share. This may be accomplished by display-
ing the credit amount on the budget sheets of the State's
Cooperative Agreement application as illustrated in Exhi-
bits C-l, C-2, and C-3 on the following pages. The amount
displayed on the budget sheets for Federal funding should
include the 90% Federal cost share plus funds to cover the
amount of credit being applied by the State (see Exhi-
bits C-l, C-2, and C-3). In addition, the EPA offer of
award to the State must include a special condition that
acknowledges the use of such credit and its disposition
(see Appendix F). The SSC must contain a similar provision
for Federal-lead remedial actions (see Appendix H). If a
credit does not adequately satisfy the State's cost share,
the State is required to pay the difference to EPA.
A credit is verified during an EPA audit which may take
place at one of three possible points:
After the State submits a summary of its credit-
able expenditures or obligations to the EPA, for
Federal-lead sites
During an interim audit of a Superfund Cooperative
Agreement
C-3
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EXHIBIT C-l
APPLICATION OF CREDIT ON COOPERATIVE AGREEMENT APPLICATION
BUDGET SHEETS: PART III, SECTIONS A AND B, SCHEDULE A
9375.1-4-c
12/31/86
rorm Approved
OMB No. 158R01W
PART III -BUDGET INFORMATION
SECTION A-BUDGET SUMMARY
GRANT PROGRAM.
FUNCTION OR ACTIVITY
(a)
i. Remedial Action
2.
3.
4.
ESTIMATED UNOBLIGATED FUNDS
FEDERAL
CATALOG NO.
FEDERAL
(b) (c)
S
5. TOTALS $
SECTION B-SCHEDULE
6. Object Class Categories
a. Personnel
b. Fringe Benefits
c. Travel
d. Equipment
e. Supplies
I. Contractual
g. Construction
h. Other
i. Total Direct Charges
j. Indirect Charges
k. TOTALS
7. Program Income
GRANT
Remedial
Action
$ 375,810
45 670
23,770
210,960
39,550
2,953,710
1,038,900
75,200
4,763,520
64,600
S 4,828,120
S
NON -FEDERAL
(d)
$
S
NEW OR REVISED BUDGET
FEDERAL
(e)
*4, 554, 178*
*4, 554, 178*
A BUDGET CATEGORIES
PROGRAM. FUNCTION OR ACTIVITY
(21
$
$
S
(3)
S
S
$
NON FEDERAL TOTAL
ID (g)
$273,942** *4, 828, 120
* 273. 942** $4,82R.170
(4)
$
$
S
TOTAL
(51
$ 375.810
45,620
23,770
210,960
39.550
2. 553. 710
1,038,900
75.200
4.763.520
64,600
* 4,828,120
$
EPA Fo,m 5700-33 (R.v. 10-79)
*Fe^ral share is $4,345,308; additional $208,870 is amount of State credit being applied
**^™e's (verified or unverified) credit is $208,870^—lance of State share is $273,942.
PAGE 7 OF 12
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EXHIBIT C-2
12/31/86
9375.1-4-c
APPLICATION OF CREDIT ON COOPERATIVE AGREEMENT APPLICATION
BUDGET SHEETS: PART III, SECTION B SCHEDULE B Form Approved
OMB No. 1S8-R01W
SECTION B - SCHEDULE • - BUDGET CATEGORIES
6. Program Elwntnts
•• Remedial Action
b.
c.
d.
e.
f.
9-
h.
i. Total Program Element!
j. STATE TOTAL
FUNDING
(1) FEDERAL
$ 4,554,178*
* 4,554,178*
S
(2) NON-FEDERAL
$ 273,942**
* 273,942**
$
(3) TOTAL
$ 4,828,120
* 4,828,120
$
(41
MAN-
YEARS
* Amount includes Federal 90% share of $4,345,308 plus $208,870 to cover the amount of
credit being applied by the State.
** State's (verified or unverified) credit for work at the site during the CERCLA credit
window period is $208,870 applied to the 10% cost share at the site, leaving the State
with a payment balance of $273,942. The total non-Federal share is $482,812.
EPA Perm 5700-33 (R«v. 10-79)
C-5
PAGE • OF 12
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EXHIBIT C-3 12/31/86
9375.1-4-c
APPLICATION OF CREDIT ON COOPERATIVE AGREEMENT APPLICATION
BUDGET SHEETS: PART III, SECTIONS C,D,E AND F
Form Approved
OMB No. 158-R01W
SECTION C-NON-FEDERAL RESOURCES
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12/31/86
9375.1-4-c
During a close-out audit of a Superfund Coopera-
tive Agreement or a site-specific project under an
MSCA.
If the audit results in a difference between the State's
credit submission and the verified credit amount, any re-
sponse agreement in effect for the site must be adjusted
accordingly. This may entail increased cost-share payments
to EPA. Under CERCLA, any credit remaining at the conclu-
sion of a fund-financed remedial action could not be ap-
plied toward the State's cost share requirements for reme-
dial action at another site. (This requirement will be
changed by SARA, however, which does allow State credit
remaining at the end of fund-financed remedial response at
one site to be applied toward the State's required cost
share at another site. Guidance on this aspect of SARA is
forthcoming.)
C. Tracking Credits
Each Region must ensure that all verified and unveri-
fied credits for each site are tracked and monitored in
EPA's Financial Management System (FMS) through the Region
FMO and are documented in an official site file. The pur-
pose of tracking credits is twofold:
To provide adequate records for accounting and
cost-recovery activities
To ensure that both the State and the Federal
government have contributed their required cost
share toward remedial action.
Instructions for update and maintenance of the FMS will be
developed and issued by the Headquarters Financial Manage-
ment Division, Superfund Accounting Branch.
C-7
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12/31/86
9375.1-4-c
2. ADVANCE MATCH
Instead of providing all of its required cost share at
the time that a remedial action is undertaken, a State may
prefer to expend its own funds during an earlier phase of
site response. This practice is called advance match.
Advance match may be provided in cash, or in State services
documented under a Cooperative Agreement, during the course
of the remedial activity. Once the remedial action is ini-
tiated, such expenditures are applied against the State's
required cost share. Costs incurred as advance match must
be reasonable, necessary, allocable to the project, and
fully supportable and traceable to the site-specific activ-
ities undertaken.
A State electing to use advance match as a cost share
payment method must document the fact in an executed Co-
operative Agreement or SSC before site work can commence.
A. Documenting Advance Match in a Response Agreement
For State-lead projects, the State's Cooperative Agree-
ment application must display the advance match funds in
the budget section of EPA Form 5700-33, and must clearly
define in the SOW those tasks that the State will perform
or services that the State will provide. The appropriate
manner in which to display advance match is shown in Exhi-
bits C-4 and C-5, on the following pages. The State also
must include in Part III, Item 23, an explanation that the
amounts shown in the non-Federal funding columns in Part
III, Section B, Schedule B and in Section D are to be used
as advance match. A Cooperative Agreement is the required
mechanism for advance match in services. Cooperative
Agreements require that full, itemized project budgets be
submitted for approval along with workplans and other sup-
porting documentation prior to undertaking any phase of
remedial response.
When a State supplies cash advance match during a
Federal-lead project, the amount is included in an SSC ar-
ticle under specified payment terms (see Appendix H).
B. Verifying Advance Match
Advance match of State in-kind services provided via a
Cooperative Agreement is verified during audit of State
C-8
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EXHIBIT C-4
9375.1-4-c
12/31/86
APPLICATION OF ADVANCE MATCH ON COOPERATIVE AGREEMENT APPLICATION
BUDGET SHEETS: SECTIONS A AND B SCHEDULE A rorm Approved
OMB No. 158R01W
PART III-BUDGET INFORMATION
SECTION A-BUDGET SUMMARY
GRANT PROGRAM.
FUNCTION OR ACTIVITY
(a)
Remedial Planning
'• (RI/FS)
2.
3.
4.
ESTIMATED UNOBLIGATED FUNDS
FEDERAL
CATALOG NO. ^^
(b) (c)
66-802 $
5. TOTALS $
SECTION B-SCHEOULE
6. Object Class Categories
a. Personnel
b. Fringe Benefits
c. Travel
d. Equipment
e. Supplies
f. Contractual
g. Construction
h. Other
i. Total Direct Charges
j. Indirect Charges
k. TOTALS
7. Pria-.'am Income
GRANT
Planning
11 (RI/FS)
$ 32,474
6r495
3,526
250
550
. 400,000
-0-
1,600
444,895
5,105
$ 450,000
$
NON-FEDERAL
(d)
$
S
NEW OR REVISED BUDGET
FEDERAL
(e)
$ 50,000
$ 50,000
A BUDGET CATEGORIES
PROGRAM. FUNCTION OR ACTIVITY
(2)
$
$
$
E PA •ArOO-33 (Rev. 10-79)
(31
$
$
$
NON-FEDERAL TOTAL
(f) (g)
$ 400,000* $ 450,000
$ 400,000* $ 450,000
(4)
$
$
$
TOTAL
(S)
$ 32,474
6,495
3,526
250
550
400,000
-0-
1,600
444,895
5,105
$450,000
$
PAGE 7 OF ^t
* c*-"(-" is advance marr-hine towal^«cs cost share for remedial action,
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EXHIBIT C-5
12/31/86
9375.1-4-c
APPLICATION OF ADVANCE MATCH ON COOPERATIVE AGREEMENT APPLICATION Form Approved
BUDGET SHEETS: PART III, SECTION B SCHEDULE B OMB No. tsX-ROIW
SECTION B - SCHEDULE B - BUDGET CATEGORIES
6. Program Elements
Remedial Planning
' (RI/FS)
b.
c.
d.
e.
f.
9-
h.
i. Total Program Elements
j. STATE TOTAL
FUNDING
(1) FEDERAL
$ 50,000
$
$ 50,000
(2) NON-FEDERAL
$ 400,000
$
$ 400,000
(3) TOTAL
* 450,000
$
$ 450,000
(4)
MAN-
YEARS
EPA Form 5700-33 (R.v. 10-79)
c-io
PAGE 8 OF 12
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12/31/86
9375.1-4-c
credit under a Cooperative Agreement. Eligibility and al-
lowability of costs are determined in accordance with the
policies described in Appendix G of this document.
C. Tracking Advance Match
The Region's FMO is responsible for tracking all ad-
vance match payments; therefore, the RPM must ensure that a
copy of each Cooperative Agreement or SSC that involves
advance match is provided to that office. All advance
match activities for each site must be tracked and moni-
tored in EPA's FMS. The purpose for this is twofold:
To develop adequate records for auditing and
cost-recovery activities
To ensure that both the State and the Federal
government have contributed their required cost
share toward remedial action.
Instructions for update and maintenance of the advance
match tracking system will be issued by FMD in EPA
Headquarters.
D. Use of Advance Match
At the time of remedial action, the State can use its
documented advance match as a credit toward its cost
share. The procedure for application of CERCLA credit to-
ward the State's cost share would be used. The Federal
obligation should be adjusted to include the 90% Federal
cost share and the amount necessary to cover the State's
credit obtained by its advance match.
C-ll
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