United States         Administration And      EPA 202-B-94-001
             Environmental Protection    Resources Management    May 1994
             Agency           (3903F)
&EPA      Managing Your Financial
             Assistance Agreement

             Project Officer Responsibilities

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            TABLE OF CONTENTS
INTRODUCTION

MODULE I

MODULE II
MODULE V
BACKGROUND

REQUIREMENTS GOVERNING
ASSISTANCE AGREEMENTS
MODULE III   PREAPLICATION/APPLICATION PHASE

MODULE IV   AWARD PHASE
PROJECT ADMINISTRATION AND
MANAGEMENT PHASE
MODULE VI   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, "GENERAL REGULATION
FOR ASSISTANCE AGREEMENTS FOR
OTHER THAN STATE AND LOCAL
GOVERNMENTS"

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APPENDIX E
APPENDIX F
APPENDIX G
APPENDIX H
APPENDIX I
APPENDIX J
APPENDIX K
APPENDIX L
APPENDIX M
APPENDIX N
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 33, "PROCUREMENT UNDER
ASSISTANCE AGREEMENTS
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

 PERFORMANCE BASED ASSISTANCE
 POLICY

CARRYOVER POLICY (COMPTROLLER
 POLICY ANNOUNCEMENT 88-09)

USE OF DISADVANTAGED BUSINESS
ENTERPRISES (DBE)

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APPENDIX O   POLICY ON THE TIMELY AWARD OF
            ASSISTANCE FUNDS FOR CONTINUING
            ENVIRONMENTAL PROGRAMS
APPENDIX P   STATE GRANT GUIDANCE, "INTEGRATION
            OF POLLUTION PREVENTION"
APPENDIX Q   SF 424, "APPLICATION FORM"
APPENDIX R   LIST OF HEADQUARTERS AND REGIONAL
            MBE/WBE COORDINATORS
APPENDIX S   OFFICIAL PROJECT AND GMO FILES
APPENDIX T   CLOSEOUT POLICY FOR ASSISTANCE
            AGREEMENTS
APPENDIX U   PERSONAL PROPERTY UNDER EPA
            ASSISTANCE AGREEMENTS
APPENDIX V   EPA ORDER 2200.4: "REVIEW PROCESS FOR
            SCIENTIFIC, INFORMATIONAL AND
            EDUCATIONAL DOCUMENTS"
APPENDIX W   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

                   • CERTIFICATION OF ASSISTANCE
                    PROJECT OFFICERS

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.
    EPA (and other Federal agencies) award funds through one of two
    methods - "acquisition" or "assistance." The basic difference
    between acquisition and an 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 benefit someone
    other than the Federal government, e.g., build awastewater
    treatment plant, then an assistance relationship  exists and EPA's
    rules which apply to  assistance programs apply.  It is the latter
    situation which 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.
•   EPA obligates approximately $3.5 Billion (or about 50% of its
    budget) through assistance agreements.
    The Project Officer (PO) plays a key role in assuring the proper
    expenditure of these funds.
    Several recent assessments identified PO training as one of the
    highest needs in  the assistance management area.


   5/23/94                     lntro 1

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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 the management of assistance agreements.
  •   This course will provide:
      - A framework.for the POs' responsibilities;
      - Awareness of the interactions between the POs and others;
      - Listing of the cradle-to-grave responsibilities of POs; and a
      - Groundwork for future PO Certification.
      This course will not provide specific PO programmatic
      requirements. This is a responsibility of the National Program
      Manager (NPM) for each program.  Some NPMs (e.g., Office of
      Water, §106 grant program and the Office of Research and
      Development) are developing training courses on the
      programmatic aspects of their POs1 responsibilities.
      This manual is organized into 8 modules:
      - The first module provides background information;
      - The second module discusses sources of administrative
        requirements governing assistance;
      - The third through sixth modules cover the phases from
        preapplication through closeout;
      - The seventh module covers audits of assistance awards; and
      - The eighth  module addresses Interagency Agreements
       (lAGs).
      The modules are followed by the Appendices.  Items in the
      Appendices are cross-referenced throughout the text of the
      modules.
  •   A Subject Index and Glossary are included and follow the
      Appendices.
5/23/94                     lntro 2

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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
   VIEWGRAPHI1
   TITLE:       OVERVIEW
   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.

  5/23/94                    '-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.
  5/23/94                     '-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 as long as the procurement is 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 Senior Resource Official (SRO) if appropriate] to justify an
    assistance relationship. If the Program (PO or SRO) has a problem
    justifying an assistance relationship, the GMO and auditors will also
    have a problem.
    5/23/94                      !-3

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             DECISION MAKING RESPONSIBILITIES

                   • APPROVAL OFFICIAL

                   • SENIOR RESOURCE OFFICIAL

                   • GRANTS MANAGEMENT OFFICE

                   • AWARD OFFICIAL

VIEWGRAPH #3
TITLE:       Decision Making Responsibilities

KEY POINTS:

 Approval Official

     Each 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 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, 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
     the policy.
     The Decision Memorandum (see Module 4) must state that
     the assistance instrument is appropriate based on the
     criteria in the policy.
 Senior Resource Official:

     The Senior Resource Official will concur in the Program's
     decision to use a contract or assistance agreement before the
     award package is sent to the GMO.
  5/23/94

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VIEWGRAPH #3 (Continued)
TITLE:         Roles and Responsibilities

KEY POINTS:

Grants Management Office
•   The GMO will review the determination of the office or laboratory
    and decide whether to concur. The GMO will make this decision in
    conjunction  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.  If a proposed agreement is awardable, the Award
    Official'is responsible for making the official offer to the designated
    recipient by signing  the assistance agreement.
  5/23/94                     '-5

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                     ACQUISITION VS ASSISTANCE
                                ACQUISITION


                                   vs.


                                ASSISTANCE
VIEWGRAPH # 3
TITLE:       Acquisition vs. Assistance

KEY POINTS:
    The critical determinant to remember when selecting the appropriate
    award instrument is based solely on 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 supercedes 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.
     5/23/94
                                 1.6

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               IDENTIFYING PRINCIPAL PURPOSE


               • DIRECT BENEFIT OR USE

                 - INCIDENTAL USE OF BENEFIT

               . SUPPORT OR STIMULATION

               • NON-PROFIT VS PROFIT

                • TYPE OF ORGANIZATION NOT
                  A FACTOR
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  that is not principally for
    the direct benefit or use of the Federal government.
    The, program office plays the key role in determining whether the
    two tests.are-met.
    Direct Benefit or Usei
    - The paginating office must determine whether the 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.
   5/23/94                     I-7

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   VIEWGRAPH # 4 (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.
   Non-Profit vs. Profit Organizations:

      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.
5/23/94                      '-8

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                        CONFERENCES

                 • DEPENDS ON PURPOSE

                 • EXCEPTION FOR ASSOCIATIONS
                  OF STATE OFFICIALS

VIEWGRAPH #5
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 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 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.)

    5/23/94                      '-9

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                                GRANTS VS
                               COOPERATIVE
                               AGREEMENTS
                         SUBSTANTIAL FEDERAL INVOLVEMENT
                                    vs.
                             NO SUBSTANTIAL FEDERAL
                                    INVOLVEMENT
                  ^gSSSffSa
VIEWGRAPH # 6
TITLE:        Grants vs Cooperative Agreements

KEY POINTS:

        The legal instrument for providing an award of assistance from EPA
        to the recipient is either through a grant or a cooperative agreement.
        It is important to note that the administrative requirements are the
        same regardless of whether a grant or a cooperative agreement is
        used.
        The distinguishing factor between a grant and a cooperative
        agreement is the degree of Federal participation or involvement
        during performance.

        Section 5(2) of the Act requires that a grant instrument be used
        whenever:

        "(2) no substantial involvement is anticipated between the
            executive agency, acting for the Federal Government, and
            the State or local government or other recipient during
            performance of the contemplated activity."
        Section 6(2) of the Act requires that a cooperative agreement be
        used whenever:
        "(2) substantial involvement is anticipated between the
            executive agency, acting for the Federal Government, and
            the State or local government or other recipient during
            performance of the contemplated activity."
   5/23/94
                              1.10

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 VIEWGRAPH #6 (continued)
 TITLE:        Grants vs Cooperative Agreements

 KEY POINTS:

•   Substantial involvement 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 any 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.
    HOWEVER, whether a cooperative agreement or a grant is
    used, EPA must:
    - Approve the narrative (workplan/scope of work)  prior to award of
     the agreement;
    - Address any deficiencies in performance;
    - Review 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.
 5/23/94

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                      IN-KIND ASSISTANCE


                      • CRITERIA

                      • DOCUMENTATION
 VIEWGRAPH #7
 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.
•   Programs should provide the following documentation in their files
    when providing in-kind assistance:

    - The expected savings of cost or time;
    - That all charges are to the grants object class series; and
    - 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.
    5/23/94                      ll12

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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 wrongly awarded where 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 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
    Federal Grant and Cooperative Agreement Act. GAD will
    seek to ensure that future funding decisions by the involved
    office or laboratory are consistent with the 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.
  5/23/94                    '-13

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                    COMPETITION IN
                ASSISTANCE AGREEMENTS
            • ENCOURAGED BUT NOT REQUIRED

            • MAY BE REQUIRED BY PROGRAM
             OFFICES

VIEWGRAPH # 9
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  and  some
   training.
   Programs should look at the nature of activities they fund and
   make a decision on whether to compete an award.
   The proposed EPA Order on Senior Resource Official (SRO)
   responsibilities requires that the SRO (through the
   Approval/Decision Official) make an affirmative determination that
   competition is not appropriate for a particular project.
 5/23/94                     '-14

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                       CONFLICTS OF INTEREST

                     USING PUBLIC OFFICE FOR
                     PRIVATE GAIN

                     PREFERENTIAL TREATMENT

                     LOSING INDEPENDENCE OR
                     IMPARTIALITY OF DECISIONS
VIEWGRAPH # 9
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) and are codified for EPA in 40 CFR Part 3, "Employee
     Responsibilities and Conduct."
     Per these regulations,  EPA employees may not take any action which
     would, among other things, create the reasonable appearance of:
     - Using a public office for private gain;
     - Giving preferential treatment to any organization or person; or
     - Losing independence or impartiality of action.
 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.

     5/23/94                      '-15

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 VIEWGRAPH # 9 (Continued)
 TITLE:         Conflict of Interest

 KEY POINTS:

    Disciplinary action for violating the new governmental ethics rules will
    not be taken against an employee who has engaged in conduct based
    on advice of an EPA ethics official, provided that employee has made
    full disclosure of all relevant circumstances.
EXAMPLES
    May an EPA employee who serves without compensation on the board
    of directors of a non-profit corporation that engages in environmental
    activities review a grant application submitted by the nonprofit
    organization?  No, because even though the employee's personal
    financial interests will not be affected, the employee must
    disqualify 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 determine 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
    30.613 and 40 CFR 31.36(b)(3). (See Appendices  D and E).

    5/23/94                     !-16

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MODULE II

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          ASSISTANCE
        PROJECT OFFICERS
        TRAINING COURSE
        MODULE II
REQUIREMENTS GOVERNING
ASSISTANCE AGREEMENTS

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                                 OVERVIEW
                   REQUIREMENTS GOVERNING EPA
                   ASSISTANCE PROGRAMS


                  HIERARCHY OF REQUIREMENTS


                   SPECIAL PROVISIONS GOVERNING
                   INDIAN TRIBAL GOVERNMENTS
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,
       PQs 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.
       This module also reviews the special provisions pertaining to Federally
       recognized Indian Tribal governments.
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                  FEDERAL STATUTES
           LEGAL BASIS FOR PROGRAMS
          • NEED STATUTORY AUTHORITY
           TO MAKE AN AWARD
VIEWGRAPH # 2
TITLE:      Federal Statutes


KEY POINTS:

  •   Federal statutes form the legal basis for all EPA assistance
      programs. All EPA projects/programs must have a statutory basis
      before EPA can legally fund them.
  •   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.
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            DELEGATIONS OF AUTHORITY


             •  REQUIRED TO AWARD ASSISTANCE AGREEMENT

             •  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 allow 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).
      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.

      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.

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VIEWGRAPH #3 (Continued)
TITLE:       Delegations of Authority

KEY POINTS:

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 to the Division Directors or Assistant
    Regional Administrator.  Currently, the award authority may not be
    redelegated below the Division Director/Assistant Regional Administrator
    level.
HEADQUARTERS AWARDS
•   The authority to make Headquarters awards is delegated from the Director
    of Grants Administration Division to the Chief of the Grants Operation
    Branch, and the Chief of the Grants Information and Analysis Branch.
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                              EXECUTIVE ORDERS

                •  E.0.11738-Clean Air/Water Violators
                •  E.0.12549 - Debarment and Suspension Rules For
                            Nonprocurement Activities
                •  E.0.11625 • National Minority Business Enterprise
                            Program
                •  E.0.12432 - Minority Business Enterprise
                            Development
                •  E.0.12138 - National Women's Business Enterprise
                            Policy
                •  E.0.12372 - Intergovernmental Review of Federal
                            Programs
                •  E.0.12803-Infrastructure  Privatization
                •  E.0.12898 - Federal Actions to Address
                            Environmental Justice in Minority
                            Populations & Low-Income Populations

  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.
     This viewgraph identifies the primary Executive Orders governing.EPA
     assistance agreements.
 "BAD ACTORS"
     Executive Order 11738, "Clean Air/Water Violators," issued September 10,
     1973, prohibits the utilization of clean air/water violators for Federal
     contracts and projects funded, wholly or in part, with Federal grants or
     loans.  If an entity is convicted of violating these provisions, they are listed
     along with the suspended and debarred bidders in the General Service
     Administration's, "List of Parties Excluded from Federal Procurement and
     Nonprocurement Programs" (contact the General/Regional Council, or
     GMO for a copy of this list).
     Executive Order 12549, "Debarment and Suspension Rules for
     Nonprocurement Activities," provides authority to suspend or debar any
     "person" from participation  in any Federally assisted project if necessary to
     protect the government's interest. It is implemented in 40 CFR Part 32.
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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 2.23.
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VIEWGRAPH # 4 (Continued)
TITLE:       Executive Orders
KEY POINTS:

   LEVERGING FEDERAL DOLLARS

       Executive Order 12372, "Intergovernmental Review of Federal
       Programs," provides States the opportunity to review and comment
       on activities proposed for Federal funding. It is implemented in 40
       CFR Part 29.
   NEW FEDERALISM
   •    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.
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           OVERVIEW OF ADMINISTRATIVE REQUIREMENTS
         TYPE OF RECIPIENT   ACTIVITY

                         PROCUREMENT
         STATE, LOCAL&
         INDIAN TRIBE
         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
                       ADMINISTRATION
  AUDIT
COST PRINCIPLES
REGULATION/CIRCULAR


 40CFRPART31/A-102

 40CFRPART33/A-110

 48CFRPART31/A-102

 40CFRPART31/A-102

 40CFRPART30/A-110

 40CFRPART30

 40CFRPART31/A-128

 40CFRPART30/A-133

 GOVERNMENT AUDITORS

40CFRPART31/A-87

40CFRPART30/A-21
40CFRPART30/A-122
48CFRPART31
 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 requirements of each.
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        2.8

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                             OMB CIRCULARS
                                                      40CFR
           • A-102   Uniform Administrative Requirements for       Part 31
                    Grants-in-Aid to State and Local Governments
           • A-110   Grants and Agreements with Institutions of     Parts 30 & 33
                    Higher Education, Hospitals, and Other
                    Non-Profit Organizations
           • A-21    Cost Principles for Educational Institutions     Part30&33
           • A-87    Cost Principles for State and Local Governments Part 31
           • A-122   Cost Principles for Non-Profit Organizations     Part 30 & 33
           • A-128   Audits of State and Local Governments        Part 31
           • A-133   Audits of Institutions of Higher Learning and     Part 30
                    Other Non-Profit Organizations

  VIEWGRAPH #6
  TITLE:       OMB Circulars
  KEY POINTS:

    OMB Circulars are guidelines issued by the Office of Management and
    Budget.  They pertain only to the business of Federal agencies.  While
    they are binding on the Federal agency or agencies to which they relate,
    they do not hold the full force and effect of law.  In other words, while EPA
    must follow the Circulars, unless the Circular is implemented in a Federal
    regulation, recipients are not required to follow them.  For instance,
    recipients are required to follow the cost principles because they are
    incorporated by reference in EPA regulations.

•   This viewgraph identifies the primary OMB Circulars governing EPA
    assistance programs.
    For a listing of other OMB Circulars that relate to  EPA assistance
    programs,  see Appendix 1 -A of the Assistance Administration Manual.
ADMINISTRATIVE REQUIREMENTS
    OMB Circulars A-102 and A-110 provide uniform  administrative
    requirements for managing the pre-award, award, and post-award
    phases.
    - OMB Circular A-102, issued on March 3,1988, establishes
      requirements for State and local governments. This Circular is
      implemented in 40 CFR Part 31.
    - OMB Circular A-110, issued April 1,1976, establishes requirements for
      institutions of higher learning, hospitals, and other non-profit
      organizations. This  Circular is  implemented in 40 CFR Parts 30 and 33.
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VIEWGRAPH # 6 (continued)
TITLE:      OMB Circulars
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, issued February 26,1979, and last revised on
      October, 1991, provides guidelines for educational institutions.
    - OMB Circular A-87, issued January 20,1981, provides guidelines for
      State and local governments.
    - OMB Circular A-122,  issued August 8,1980 and revised May 19,1987
      provides guidelines for non-profit organizations other than States, local
      governments, and educational institutions.
    - 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 any audit
     of a profit maker receiving an assistance agreement.
     EPA auditors may also conduct an audit of any other assistance  recipient,
     but is to rely, as much as  possible, on  audits conducted under A-128 and
     A-133.

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                            TITLE 40 OF THE
                     CODE OF FEDERAL REGULATIONS
:••:'•:••.••:•• I
PART 29
PART 30
PART 31
PAKI 9!I
PART 33
PART 34
PART 35
PART 40
PART 45
PART 48
PART 47

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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.

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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 EO 12372 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).


  5/23/94                           2.13

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VIEWGRAPH #8 (Continued)
TITLE:         40 CFR Part 29

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.
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                        40 CFR PART 30
                   Provides Administrative Requirements for
                   Assistance Agreements to Other Than State
                   and Local Governments
                   Implements OMB Circulars A-21, A-110,
                   A-122, and A-133
VIEWGRAPH #9

TITLE:       40 CFR Part 30

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

      Profit makers receiving assistance agreements must comply with the
      administrative requirements in 40 CFR Part 30.
 5/23/94
2.15

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                      40 CFR PART 31

                  Provides Administrative Requirements for
                  Assistance Agreements to State, Local,
                  and Indian Tribal Governments
                  Implements OMB Circulars A-87, A-102,
                  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."
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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, issued May 26,1988,  and last amended May 3,
     1990, implements Sections 3 and 6 of Executive Order 12549
     (regarding government-wide debarment or suspension) and selected
     provisions of the Drug-Free Workplace  Act of 1988.  It establishes:
     (1) rules for debarring or suspending parties; (2)  government
     authority for compiling and distributing lists of parties debarred or
     suspended from receiving Federal assistance; (3) requirements
     governing EPA reporting of parties debarred or suspended from
     Federal activities; and (4) rules governing drug use among
     assistance recipients and their contractors in the project workplace.
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                      40 CFR PART 33
                  PROCUREMENT REQUIREMENTS FOR:
                  - INSTITUTIONS OF HIGHER EDUCATION,
                   AND
                   OTHER NONPROFITS
VIEWGRAPHI12

TITLE:      40 CFR Part 33

KEY POINTS:

  •   40 CFR Part 33, issued March 28,1983 and last amended March
      11,1988, describes requirements for procurement under assistance
      agreements for recipients other than States, local governments,
      Indian Tribes, and profit makers.  This regulation discusses
      procurement of supplies, services, and construction under EPA
      assistance agreements and supplements 40 CFR Parts 30,32, and
      35. (See Appendix H).
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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 Environmental Education 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 0).
           Financial Assistance for the National Estuary Program (Subpart P).
      Subparts B, F, G, L, and N are reserved for future use.

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                    40 CFR PARTS 40,45,46, and 47

                    •  PART 40
                      Requirements for Research and Demonstration
                      Grants
                    •  PART 45
                      Requirements for Training Assistance
                    •  PART 46
                      Requirements for Fellowships
                    •  PART 47
                      Environmental Education Grants
VIEWGRAPH414
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 I).
 •   40 CFR Part 40, issued May 15,1973, and last amended June 24,1983,
     establishes EPA's requirements for awarding and managing research and
     demonstration grants.  Research and demonstration projects are funded to
     research and analyze various environmental issues.
     40 CFR Part 45, issued October 18,1984, implements EPA's requirements
     for awarding and managing training projects. The purpose of this
     assistance is to improve and develop the skill base of students and
     professionals  in the environmental field. Training assistance under 40 CFR
     Part 45 includes the following: (1) developing, expanding, planning,
     implementing, and improving environmental training; (2) increasing the
     number of trained pollution control and abatement personnel; (3) upgrading
     the level of occupational and professional training among State and local
     environmental control personnel; (4) training people to train others in
     occupations involving pollution abatement and  control; and (5) bringing new
     people into the environmental control field.
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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, "National Environmental Education Act Grants
       Regulations; Interim Final Rule", is a program awarded out of both
       Headquarters  and the Regions/ The Environmental Education
       grants are available to local education agencies, colleges,
       universities, State education or environmental agencies, not for
       profit organizations, or noncommercial educational broadcasting
       entities.
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                          EPA ORDERS, POLICIES &
                                 GUIDANCE
                          • RECYCLED PAPER
                          • FUNDING ASSISTANCE AGREEMENTS
                          • PERFORMANCE-BASED ASSISTANCE
                          • CARRYOVER OF UNOBLIGATED
                           BALANCES
                          • USE OF DISADV ANT AGED BUSINESS
                           ENTERPRISES
                          • TIMELY AWARD OF ASSISTANCE
                          • POLLUTION PREVENTION GUIDANCE
                          • ASSISTANCE VS. ACQUISITION

 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
    EPA's policy on recycled paper is provided in EPA Order No. 1000.25 "Use
    of Recycled Paper." Issued on January 24,1990 and last amended on April
    12,1990, this order was developed to promote the use of recycled paper.
    Specifically, it requires new contracts and assistance agreements to specify
    that reports delivered to EPA in conjunction with EPA contracts or assistance
    agreements must be printed on recycled paper (even if recycled paper is
    more costly). (See Appendix J)
•   To help resolve problems EPA program and GMO staffs are experiencing in
    making awards for one-time projects, new programs, and using Administrator
    or Regional Administrator discretionary funds, EPA established consistent,
    standard operating procedures for funding assistance agreements.  (See
    Appendix K 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.

  5/23/94                          2.22

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VIEWGRAPHI15 (Continued)
TITLE:       EPA Orders, Policies, and Guidance
KEY POINTS:
      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.
  EPA POLICIES
  •   EPA's performance-based assistance policy, issued May 31,1985,
      establishes agency-wide procedures for negotiating and overseeing
      assistance agreements. It includes guidelines for: (1) assessing
      performance, (2) rewarding accomplishments,  (3) correcting problems,
      and (4) imposing penalties. (See Appendix L.) While the policy applies
      to Continuing Environmental Program Grants, the guidelines may be
      helpful to other programs.
      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 M.)

      - Carryover of unobligated balances is authorized for both project type
        assistance agreements and Continuing Environmental programs in
        cases where the source appropriation has not expired. For project
        type assistance agreements, carryover may also be approved
        when the  source appropriation has expired, if the scope of the work
        has not changed and the project period has not expired.
      EPA's requirements on the use of disadvantaged business
      enterprises (DBE) are contained in two EPA plans. (See Appendix N)
      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
5/23/94                          2.23

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VIEWGRAPH #15 (Continued)
TITLE:       EPA Orders, Policies, and Guidance

KEY POINTS:

      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 33.240 (for universities and other nonprofits); 40 CFR
       31.36 (e) (for States, local governments, and Indian tribes); and 40 CFR
       35.6580 (for Superfund recipients).

      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 O)
  EPA GUIDANCE
      The Agency's implementation of pollution prevention is provided in EPA's
      "State Grants Guidance: Integration of Pollution Prevention," dated
      November 12,1992. (See Appendix P.) 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.
  5/23/94                          2.24

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                      SPECIAL PROVISIONS FOR
                   INDIAN TRIBAL GOVERNMENTS

                      • Minimum Requirements For Establishing
                       'Treatment as States"

                      • Exemption from Certain Statutory
                       Requirements

                      • Exclusion from Intergovernmental,Review

                      • Multi-Media Grants


VIEWGRAPH#16
TITLE:       Special Provisions for Indian Tribal Governments
KEY POINTS:

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

5/23/94                          2.25

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                   Hierarchy

           STATUTES

           EXECUTIVE ORDERS

           FEDERAL REGULATIONS
           OMB CIRCULARS (implemented
           through Federal regulations)

           EPA ORDERS & POLICIES

           EPA GUIDANCE
  VIEWGRAPH#17
  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 precedent
      over those that do not.

   •   The viewgraph lists in descending order which document has
      precedent 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.
5/23/94                     2.26

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MODULE

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     ASSISTANCE
   PROJECT OFFICERS
    TRAINING COURSE
   MODULE
PREAPPLICATION
  APPLICATION
     PHASE

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                        OVERVIEW



              • PRE-APPLICATION ASSISTANCE

              • APPLICATION REVIEWS

              • PROGRAM GUIDANCE

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 may
    be helpful to keep a record of all discussions with the applicant
    in case an issue  arises later which was discussed during this
    phase.

  5/23/94                   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
KEY POINTS:

•   The award of an assistance agreement begins with the issuance of
    Agency guidance to the applicant. 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;
    - If the award is competed, the evaluation criteria and the relative
      weight of each criteria;
    - Statutory cite;
    - Evaluation criteria;
    - Any special emphasis, e.g. the need to meet DBE 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.
   5/23/94                   3.2

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VIEWGRAPH #2 (Continued)
TITLE:      Guidance

KEY POINTS:
    The Program may distribute the guidance or solicitation by:
    - Sending directly to the applicant, 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.
     5/23/94                    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 to develop the proposal, or sharpen
    the focus of a proposal, and will help avoid delays caused by
    submitting an incomplete application.

    Preapplication assistance may be formal, i.e. the prospective applicant
    requests in writing or sends in an SF 424 "Application For Federal
    Assistance," (see Appendix Q) designated as a Preapplication; or
    informal, i.e., discussions with the PO and GMO concerning various
    aspects of the proposed project or questions on the process itself.
    Preapplication assistance should take place if it is appropriate, i.e., it
    may not be necessary for Continuing Environmental Program grants,
    but may be desirable for new recipients or for projects where the
    applicant wants to "grease the skids" to speed up the process.
    The POs and GMOs should review preapplications generally within 45
    days of receipt.
    Applicants for Continuing Environmental Program grants should
    request preapplication assistance well before the 60 day application
    due date to allow sufficient time for a thorough review.

    The discussions the PO will have with the prospective applicant will
    focus on programmatic activities EPA will fund, e.g., does the
    application meet statutory goals and objectives and is it consistent with
    program goals and objectives. The program staff performs a
    programmatic evaluation of the application.  When the programmatic
    review of a proposal requires specific qualifications not available in the
    program, the reviewer must obtain assistance from other EPA staff
    with expertise in the subject area, such as reviewing a Quality
    Assurance Plan.


     5/23/94                    3.4

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VIEWGRAPH # 3 (Continued)
TITLE:          Pre-application Assistance

KEY POINTS:
    The discussions with the GMO will focus on the administrative issues,
    e.g., what needs to be submitted with the application to make it
    acceptable from the administrative point of view, what certifications are
    required, what justification is needed to support the budget.

    Release of information:
    - If the Award is to be made based on competition, no EPA official  may
      provide information regarding priorities, criteria, or other pertinent
      matters to a particular applicant or other interested person, unless such
      information is available to all parties.
    - If the award is not based on competition. EPA employees may review
      draft narrative/workplans and provide input.  EPA employees may also
      negotiate with the applicant to change the proposed outputs, reduce the
      assistance amount, or condition the award based on approval of a
      revised workplan.
    - As a rule, EPA employees should not prepare an application on behalf
      of an individual or organization. It is permissible to help applicants by
      answering questions, but the applicant should be preparing the
      application, after all, this is their proposal!
    After evaluating a pre-application, the Approval/Decision Official or their
    designee must notify the applicant, preferably in writing, of the results of
    the evaluation and either:

    - Encourage submission of a formal application for assistance. The
      reviewer may suggest modifications or revisions to any aspect of the
      application, but under no circumstances should the applicant be
      assured of funding; or

    - Reject the pre-application. This letter should give specific reasons for
      rejection, e.g., lack of scientific/technical merit, not relevant to Agency's
      objectives, lack of funds; or
    - Take other action.  Suggest the preapplication be submitted to another
      Federal agency which has a more direct interest in the project.
         5/23/94                     3.5

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VIEWGRAPH #3 (Continued)
TITLE:       Preapplication Assistance
KEY POINTS:
    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.
      5/23/94                    3.6

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                          APPLICATION PHASE
                     • GMO RECEIVES APPLICATION

                     • GMO CONDUCTS ADMINISTRATIVE
                      REVIEW

                     • PO CONDUCTS PROGRAMMATIC
                      REVIEW

                     • REVIEW AND EVALUATE
                      APPLICATIONS IN 60-90 DAYS

VIEWGRAPH #4
TITLE:       Application Phase

KEY POINTS:

    During this phase the PO and GMO will review the application to
    ensure that it meets programmatic and administrative requirements.
    The application should be sent to the GMO who will assign an
    Assistance Identification Number, establish the official assistance file,
    and conduct legal and administrative evaluations. Remember, an
    application is not officially received in EPA until the GMO assigns an
    Assistance Identification Number and enters it into the Grants
    Information and Control System (GIGS).
    The GMO is responsible for sending a copy of the application to
    the PO, who will perform a technical review and also obtain the
    required in-house or extramural reviews. These two reviews should be
    done concurrently to minimize delays.  While the length of the
    programmatic review will vary depending upon the complexity of the
    proposal, time of year, program workload, other EPA staff involvement,
    the PO should attempt to complete the review within 3 weeks from
    receipt of the application.
    Technical Review. The PO's technical review is an appraisal to
    select those proposals that will contribute most effectively to
    EPA's program objectives and priorities.  The PO must ensure that
    the proposal is consistent with applicable regulations and
    established EPA program criteria and annual guidance.  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.
       5/23/94                   3.7

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VIEWGRAPH # 4 (Continued)
TITLE:       Application Phase

KEY POINTS:
    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.
    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.
    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.
    POs who furnish information to the public must make sure the information
    is consistent with program objectives and guidance,  as well as releasable
    under the Freedom of Information Act. If there is any question over
    whether the information is releasable under FOIA, the PO must contact the
    Office of General Counsel/Office of Regional Counsel.  Never release a
    draft workplan.
      5/23/94                   3.8

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                  THE APPLICATION PACKAGE
                  Standard   |   I lnt»fgov»mm»nai R«vl«wSlgintl
                 Application
                 Form I (SF 424) I  I T [ Procurement Syttom C«nHlc«llon. H ippllMbto
I Budget Detail |
                | Project NarraUveJ
                             [C«itmeHlonBig»fdlngD»binn»Bt«ndSuip>nilon |

                             | Currant Approval Indirect Coil R«l« Agr»»m»nt  |

                             | Ami-Lobbying C«itHICJllon       •    |
                             | QialBy Am«urane« Pro|«ct Plan. H ippllcibto
                             | lnt«ndod UM Pltn. SRF only	
                             | millh ind SiHty Pl»n. Suptrtund only
                Requirements  | f | Cammunlty RtUllont Plan. Sup«rtund onV
                             | Entere»Bi»nt t«tt«r, Supartuni) only
VIEWGRAPH # 5
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.
        5/23/94                       3.9

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                 SF 424 - APPLICATION FOR FEDERAL
                            ASSISTANCE
                             FACESHEET

                             BUDGET INFORMATION

                             ASSURANCES

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

KEY POINTS:

     The application (SF 424) consists of four parts -- the Facesheet, Budget
     information, Assurances, and a Program Narrative/Workplan.
     Even if an application has already been through a preapplication
     evaluation, it still may be necessary for the GMO  and PO to work with the
     applicant to revise the application further before it is approvable.

     The PO is also responsible for:
     - Reviewing the application to ensure that all budget items, proposed
       contracting and subcontracting, and work elements are reasonable and
       necessary.  To do this, the PO needs to review the narrative/workplan
       and must ask the applicant questions if the application does not
       provide a clear understanding of why the costs  in the budget are
       necessary and reasonable.
     - Reviewing the application budget to ensure the activities are eligible
       under the program statute(s), guidance, and regulations, and the work
       is allocable to the project.
  •   GMOs are responsible for reviewing and analyzing the application to
     ensure that all information is complete and correct.  This includes
     ensuring that all costs are allowable and that assistance is the
     appropriate funding mechanism. The GMOs also ensure that the
     application meets all statutory, regulatory, and legal requirements.
     The SF 424 application (see Appendix Q) 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.
       5/23/94                    3.10

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                               FACESHEET
                    GENERAL SUMMARY INFORMATION
                         SF424
                       Facestieet:

                       • General
                        Information

                       • Project
                        Summary
 Provides General
 Information About
 Applicant

 Provides Summary
 Information on the
 Proposed Project
VIEWGRAPH # 7
TITLE:        SF 424 - Facesheet

KEY POINTS:
       The applicant provides the information on the Facesheet. The
       Facesheet provides:
       - General administrative information about the applicant, e.g., type of
         entity, location of the project, name of the applicant's contact
         person, Congressional district, and
       - Summary information about the proposed project, e.g., budget,
         length of budget and project periods.
       The GMO will review the Facesheet to ensure that all items are
       properly completed.
       If the award of assistance involves verification of the recipient having
       met the required level of effort under a previous award (e.g., §106 of
       the Clean Water Act and §105 of the Clean Air Act), the most recent
       Financial Status Report and supporting documentation must be
       carefully reviewed to ensure the requirement was met.
         5/23/94
3.11

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                              BUDGET INFORMATION
                         SF421A

                         Budget
                         Information
                 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
VIEWGRAPH # 8
TITLE:

KEY POINTS:
SF 424 - Budget Information
    SF 424A (Budget Information) - Budget information indicates total funding
    needs and summary information for proposed projects.
    Sections A, B, C, and D call for budget estimates for the entire project,
    except for projects funded on an annual or other incremental basis.  In the
    latter case,  Section E provides the budget information for subsequent
    budget periods. The form itself provides detailed  instructions for completing
    the form.
    The applicant is responsible for preparing the budget.
    The narrative/workplan must justify the necessity for every item .  There is
    no one way to determine the reasonableness of any particular item.  If the
    PO questions whether a particular item is "reasonably" priced, they should
    ask other POs or call various suppliers. The PO may also ask the GMO for
    advice, other EPA persons, or the applicant how they arrived at the cost.
    The PO is responsible for reviewing the proposed budget against the
    Narrative/Workplan to determine whether the budget is reasonable from a
    programmatic perspective. In making this determination, the PO should
    consider the technical necessity for and price reasonableness of proposed
    personnel, travel, equipment, supplies, procurements, and other items in the
    budget.
    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).
         5/23/94
                    3.12

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VIEWGRAPH # 8 (Continued)
TITLE:         SF 424 - Budget Information

 KEY POINTS:

 •   The PO should also consider what will happen to the property after it is
     no longer needed for the project/program or the project/program is
     terminated. The GMO will add a condition to the agreement regarding
     disposition.
     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. If the information supplied is not
       sufficient to determine that the costs are reasonable and allowable, the
       GMO or PO will contact the applicant to obtain additional support.
     - For Personnel, the applicant must identify all staff positions by title,
       annual salary, and the percentage of time each position will be assigned
       to the project/program. The  PO must examine staffing requirements for
       the project and must determine whether project staff support is adequate
       and the right mix to meet the project objectives. (The GMO will review
       this category to determine if the salary ranges proposed are reasonable.
       Some of the questions the PO should consider are:
          -  Who is charged with the ultimate responsibility to manage the
            project?
          -  Will key staff members participate full time?
          -  Are there gaps in areas of expertise?
     -  For Equipment, the applicant must identify each item and its cost. The
        PO must review the list and determine that each item is necessary to
        carry out the objectives of the project.
        -  Some programs (such as Superfund) require the applicant to conduct
          a cost/benefit analysis of  purchasing equipment, leasing, or letting the
          contractor purchase the equipment.   The PO is responsible for
          ensuring that the applicant complies with any preaward program
          specific  requirements regarding property (or any other cost item).
         5/23/94                    3.13

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VIEWGRAPH # 8 (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.  The PO must review
       this list and satisfy themselves that:
        -  The contract support proposed is necessary to carry out the
          objectives of the project/program;
        -  That the applicant has determined that any proposed contractors
          are not suspended or debarred; and
        -  The proposed costs appear reasonable.
      - The GMO may also be reviewing the costs from a reasonableness
       standpoint.
      -  If the applicant is proposing to award a sole-source contract, they
       must provide their reasoning so that the PO and GMO can
       determine if there is adequate justification .
      -  For Indirect Costs, the applicant must provide a copy of its current
       approved indirect cost rate. EPA will not allow a recipient to draw
       down on indirect costs unless they have an approved, current rate.
       The  GMO 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.)

       5/23/94                     3.14

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 VIEWGRAPH # 8 (Continued)
 TITLE:           SF 424 - Budget Information

 KEY POINTS:


    Section C - Non-Federal Resources includes a list of funding sources and
    amounts other than those provided by EPA or other Federal agencies. If
    the applicant is required to cost share, this section is where those costs will
    be shown. For universities of higher education and other non-profits, there
    is a minimum 5% cost share (unless a statute or program requires a higher
    cost share or an approved deviation has waived the requirement).  For all
    other recipients, the amount of the cost share, if any, will be determined by
    statute or by program regulations or guidance.
•   Section D - Forecasted Cash Needs shows the estimated rate of
    expenditures by quarter over the Fiscal Year.  EPA does not generally
    require that its applicants complete this Section.
•   Section E - Budget Estimates of Federal Funds Needed for the Balance of
    the Project provides useful information to estimate funds necessary for
    future years.
•   Section F - Other Budget Information is used to list and explain specific
    direct  and indirect charges that appear in Section B. Space is also
    provided to allow the applicant to clarify other parts or sections of the
    application.
        5/23/94                    3.15

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                    COST SHARING
            Requirements Vary
            With Program
            Only Allowable
            Costs Can Be Used
            Cannot Use Federal
            Funds As Match
            May Use In-Kind
VIEWGRAPH # 9
TITLE:       Cost Sharing

KEY POINTS:
   The amount of the cost share is specified in the regulations
   applicable to the program.
   Cost sharing requirements may be required by statute (e.g., Air
   §105 grants), program policy (Superfund Technical Assistance
   Grants), or by regulation (5% minimum cost share for recipients
   subject to the provisions in 40 CFR Part 30.)
   Appendix 14-A of the Assistance Administration Manual
   contains a list of the statutory/regulatory cost sharing
   requirements.
   Recipients can claim only allowable costs to meet cost sharing
   requirements.
   The Director, Grants Administration Division, may approve a
   deviation from non-statutory cost sharing requirements.
   Funds awarded under assistance programs of other Federal
   agencies cannot be used to  meet EPA cost sharing
   requirements unless the other agency's legislation explicitly
   authorizes such use, e.g., Department of Housing and Urban
   Development's Community Development Block Grant program,
5/23/94                    3.16

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VIEWGRAPH # 9 (Continued)
TITLE:        Cost Sharing

KEY POINTS:
   Sources of funds for recipient cost sharing are either:

   - "In-kind" contributions e.g., facilities, equipment, materials,
     professional services, volunteer staff time provided by
     non-Federal public agencies, organizations, or individuals, or
   - Cash.
   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.
    5/23/94                    3.17

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                ELIGIBLE, ALLOWABLE, REASONABLE,
                      AND ALLOCABLE COSTS

                 •  ELIGIBLE-STATUTORY BASIS

                 •  ALLOWABLE - PERMITTED BY
                   REGULATION, CIRCULAR, ETC.

                 •  REASONABLE - PRUDENT PERSON
                   THEORY

                 •  ALLOCABLE - BENEFITS
                   RECEIVED

VIEWGRAPHI10
TITLE:        Eligible, Allowable, Reasonable, and Allocable Costs

KEY POINTS:

     Eligible: To be  eligible, the cost must be permitted by statute, program
     guidance, or regulations. The costs must also conform to any Federal
     limitations (e.g., real property purchases under the Construction Grants
     program, mobile treatment systems under Superfund);
 •   Allowable:  To  be allowable, the costs must meet the following general
     criteria:
     -  Be necessary and reasonable for the performance of the award;
     -  Be authorized by the appropriate Cost Principles;
     -  Be authorized, or not prohibited, under Federal, State or local laws or
       regulations;
     -  Be consistent with the recipient's policies, regulations, and
       procedures. The recipient must apply the same policies, regulations,
       etc. to both Federally assisted and non-Federally assisted activities;

     -  Be consistent with Generally Accepted Accounting Principles;
     -  Not be included as a cost or used to meet cost sharing/matching
       requirements of any other federally financed program (unless
       specifically authorized by Federal law); and
     -  Be adequately documented.
      5/23/94                   3.18

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VIEWGRAPH #10 (Continued)
TITLE:          Eligible, Allowable, Allocable

KEY POINTS:

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

      -  Whether the cost is of a type generally recognized as ordinary
        and necessary for the operation of the organization or
        performance of the award.
      -  The restraints or requirements imposed  by such factors as
        general|y 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.

      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.
   5/23/94                    3.19

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          CRITERIA FOR APPROVING COSTS
              Costs Are Allowable, Allocate and
              Reasonable

              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
VIEWGRAPH#11
TITLE:        Criteria for Approving costs

KEY POINTS:
    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.)
    Recipients must maintain and report costs in accordance with
    the regulation that governs the agreement, i.e., either 40 CFR
    30.500 or 40 CFR 31.20.
    The recipient cannot be reimbursed for costs that are contrary to
    the specific terms of the agreement or are outside its scope.
    The recipient may only charge costs if they resulted from
    obligations made during the approved funding period.
 Preaward Costs
 •   Recipients may not be reimbursed for costs incurred before the
    Award Official signs the agreement unless pre-award costs are
    specifically allowed.  EPA allows pre-award costs only in
    specific circumstances in the following programs:
    Construction Grants
    - The Award Official must specifically approve preaward costs
      before they are allowable. (See 40 CFR 35.2118 for the
      limitations of pre-award costs.)
     5/23/94
3.20

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VIEWGRAPH#11 (Continued)
TITLE:       Criteria for Approving Costs

KEY POINTS:
     Continuing Environmental Program Awards/Superfund
     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
       [40 CFR 35.6275(b) for Superfund awards].
     Project Type Awards
     - Recipients may charge to the award only those costs resulting
       from obligations incurred during the funding period.
     - If the recipient incurs pre-award costs, they must obtain a
       deviation from the Director, Grants Administration Division
       before those costs can be charged to the agreement. (See
       pages 5.13 and 5.14 for a discussion of the deviation process.)
       5/23/94                    3.21

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                CLASSIFICATION OF PROPERTY
            Personal Property  Real Property  Intangible Property
 VIEWGRAPH#12
 TITLE:       Classification of Property

 KEY POINTS:

There are two types of personal property:  equipment and supplies.

  Equipment
  - State, Local, and Indian tribal recipients must follow the definitions for
     equipment in Part 31. Equipment is defined as items with a useful
     life of at least 1 year and an acquisition cost of $5,000 or more per
     unit.
  - For universities and non-profits, equipment is defined as items with a
    useful life of at least 2 years and an acquisition cost of $1,000 or more
    per unit.

  Supplies.
  - Under all EPA assistance programs, supplies are defined as tangible
    personal property other than equipment.
Real property under all EPA assistance programs is defined as land,
including land improvements, structures, and right-of-ways, excluding
movable machinery and equipment.
Intangible property includes copyrights, rights in data, and patents.
  5/23/94                    3.22

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

VIEWGRAPH4M3
TITLE:      Acquisition of Property

KEY POINTS:

 •   In order to purchase property under an assistance agreement,
     it must first be authorized in the agreement.
     Recipients may purchase property only during the
     budget/project period of the assistance agreements.
     The title to personal property purchased under an assistance
     agreement is always vested with the recipient; however, EPA
     reserves the right (in condition(s) to the agreement) to
     transfer title to another entity within 120 days after the end of
     the project.  Also, EPA has an "interest" in the property equal
     to the percent of Federal funds in the property, e.g., if the
     match is 90% Federal and 10% recipient, EPA has.a 90%
     "interest" in the property.  At time of disposal, EPA gets 90%
     of the proceeds from the sale or, if EPA gets the property,
     EPA owes the recipient 10% of the proceeds from the sale.
 •   When Federally owned property is provided to the recipient,
     the title remains with the Federal government.
     The title to supplies also vests with the recipient.
   5/23/94                   3.23

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

                 Assurance
                 of compliance
               Outlines Applicable Federal Laws
               for Applicants
               Assures EPA of an Applicant's
               Compliance with Applicable
               Federal Requirements
VIEWGRAPH*  14
TITLE:

KEY POINTS:
Assurances
    The purpose of the assurances in the SF 424B is to emphasize to the
    applicant the Federal laws and requirements which are applicable to
    all Federally assisted projects, i.e., "crosscutting" requirements.
    The applicant must sign this page as well as the Facesheet.  Usually,
    the same person signs both places, but whoever signs must have
    the authority to bind the organization to the terms of the
    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.
     5/23/94
                3.24

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                PROJECT NARRATIVE/
                       WORKPLAN
             PROJECT NARRATIVE

            I. History
  Describes the History of
  the Problem, and
  Proposed Actions
                                 Indicates Compliance
                                 with Regulatory
                                 Requirements
VIEWGRAPH4M5
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.
    5/23/94
3.25

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VIEWGRAPH # 15 (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).
   5/23/94                    3.26

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                  TIPS FOR NEGOTIATING
                      WORKPLANS
              • STRIVE FOR REALISTIC GOALS
              • ADDRESS MAJOR OBJECTIVES
              • USE DIPLOMACY
              •COMPROMISE
              • PAY ATTENTION TO DETAIL

VIEWGRAPH416
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 Project Officer will, in most cases, be EPA's lead negotiator.
    The PO also may often need to negotiate internally to establish their
    program's official position 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.

  5/23/94                    3.27

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VIEWGRAPH #16 (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 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.
   5/23/94                   3.28

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                       CERTIFICATIONS


                  •PROCUREMENT SYSTEM
                   CERTIFICATION

                  •ANTI-LOBBYING

                  •SUSPENSION AND DEBARMENT

                  • DRUG-FREE WORKPLACE

VIEWGRAPH4H7
TITLE:         Certifications

KEY POINTS:

    The applicant must make the following certifications.
    The Procurement System Certification Form (EPA Form 5700-48)
    indicates whether or not the applicant will follow its own procurement
    system (provided system(s) comply with EPA requirements).
    - If the applicant indicates it will not follow its own system (either
      because that system does not comply with EPA's requirements or
      because the applicant does not wish to certify), they are required to
      follow 40 CFR Part 31 (local governments and Indian tribes) or 40
      CFR Part 33 (universities of higher education and other non-profits).
      By not certifying, the applicant also is agreeing they will allow EPA to
      conduct a preaward review of proposed contract awards.
    - The form does not apply to State governments except under the
      Superfund program (see 40 CFR 35.6550(a)).
    The 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 grant.


    5/23/94                   3.29

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VIEWGRAPH # 17 (continued)
TITLE:         Certifications

KEY POINTS:

•   Suspension and Debarment are methods which can be used to keep
    "bad actors" from receiving Federal funds.  Suspended or debarred
    entities are listed in the General Services Administration's publication,
    "Lists of Parties Excluded from Federal Procurement and
    Nonprocurement Programs." The Program Offices and the GMO
    should ensure that the list has been checked before an award is
    made.  In the Regions,  the GMO or the Headquarters/Regional
    Counsel's office will probably have the current list.
    - Debarment requires a formal investigation, notification, a hearing,
      and (if requested) an appeals process before the EPA Debarment
      Official (Director of the Office of Grants and Debarment) can debar
      someone.
    - Suspension is an immediate temporary action taken to protect the
      Federal government and/or public interest pending the completion
      of an investigation or ensuing legal or debarment proceedings. The
      EPA Debarment Official is the only person that can suspend
      someone.
•   The Drug Free Workplace Act of 1988 requires contractors and
    recipients of Federal funds to certify that they will provide a drug-free
    workplace. The Act applies to all Federal assistance programs and
    contracts, regardless of value.  No separate certification form is
    required. The applicant certifies by signing the application.
      5/23/94                   3.30

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                QUALITY ASSURANCE/
                  QUALITY CONTROL
                          Recipients are Required to Develop a QAPP.
                           • A QAPP Outlines Procedures for
                                 ig G
                                 ing
Ensuring Quality In Environmental
Monitorim
                            The Application Must Include Either a
                            QAPP or a Schedule for Its Development
                           •  A QAPP Must be Approved Before
                             On-slte Sampling Can Begin
VIEWGRAPH4M8
TITLE:       Quality Assurance/Quality Control

KEY POINTS:

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

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

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

   Quality Assurance Program Plan: A formal document which
   describes an orderly assembly of management policies, objectives,
   principles, organizational responsibilities, and procedures  by which
   an agency or laboratory specifies how it intends to:
   - Produce data of documented quality, and

   - Provide for the preparation of quality assurance project plans and
    standard operating procedures.
    5/23/94
   3.31

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VIEWGRAPH #18 (Continued)

TITLE:       Quality Assurance/Quality Control


KEY POINTS:

    Quality Assurance Project Plan: An organization's written
    procedures which delineate how it produces quality data for a
    specific project or measurement method.

    If an applicant is unfamiliar with EPA Quality Assurance (QA)
    requirements, the PO should direct them to the appropriate QA
    office in Headquarters, laboratories, or the Region.
    QA requirements by type of applicant:
    - If the application is for research financial assistance, the
     application  must include a QA narrative statement which either
     addresses certain areas or provides justification why any areas
     do not apply (see 40 CFR 30.503(d)).
    - If the application is from a State or local government (except for
     a Wastewater Treatment Construction Grant or Superfund) the
     applicant must submit a QA program plan.
    - All other applicants must submit a QA project plan with their
     application. (Under the Superfund program a recipient may not
     begin field work before EPA approves the plan.)
•   The requirements for quality assurance are contained in 40 CFR
    Part 30 for universities and other non-profits, and in 40 CFR Part
    31.45 for States, local governments, and Indian tribal
    governments.
       5/23/94                    3.32

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                    APPLICATIONS INVOLVING
                   INTERNATIONAL ACTIVITIES
                               • ALL APPLICATIONS
                                THROUGH AA FOR IA

                               • STATE DEPARTMENT
                      ^	^     REVIEW MAY BE NECESSARY

VIEWGRAPH4M9
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

     - 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
     other 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.
       5/23/94                    3.33

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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 #20
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 may be beneficial.
     - Informing the prospective applicant that EPA does not pay for costs
       incurred before  an award is made (except in limited circumstances,
       seep. 3.10)
     - Informing the prospective applicant that there is no. obligation by
       EPA to fund the proposal.
     - Negotiating the  level of funding within constraints of the available
       funds.
     - Providing the prospective applicant with the Catalog of Federal
       Domestic Assistance (CFDA) number for the assistance program,  if
       applicable.   If in doubt, the PO should contact the GMO.
      - Notifying the GMO of anticipated applications/solicitations and
       receipt date. This will help the GMO plan their work and may help
       avoid unnecessary delays in making the award.
    5/23/94                     3.34

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VIEWGRAPH #20 (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.
    5/23/94                    3.35

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

VIEWGRAPH #21
TITLE:         GMO Roles and Responsibilities
               Preapplication/Application

KEY POINTS:

    In this phase the GMO is responsible for:
    - Developing and distributing application kits.
    - Responding to the prospective applicant's administrative questions
      and issues.
    - Receiving, logging in the formal pre-application/application, and
      distributing a copy to the PO for their programmatic review.
    - Reviewing the application (in conjunction with the PO) to ensure that it
      is complete and complies with EPA's administrative requirements.
     - Performing a cost review of the budget to ensure that the costs are
      allowable and are adequately supported. This may require working
      with the PO to obtain additional information.
    - Notifying the recipient if any administrative deficiencies are found in
      the application and working with the applicant to resolve the issues.
    - Conducting a review of the applicant's management systems
      (procurement,  property, administrative and financial - with the FMO), if
      necessary.
    - Reviewing the program decision to ensure that an appropriate
      instrument is proposed and determining that an assistance agreement
      rather than a contract is the appropriate funding instrument.
     5/23/94                     3.36

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                             OTHER PLAYERS
                      ROLES AND RESPONSIBILITIES
                  PRE-APPLICATION/APPLICATION PHASE

                       • APPLICANT

                       • FMO/SFO

                       • OGC/ORC

                       • MBE/WBE COORDINATOR


VIEWGRAPH #22
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.
        5/23/94                   3.37

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VIEWGRAPH #22 (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.
        5/23/94                    3.38

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MODULE IV

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      SB,
      resctf"
   ASSISTANCE
 PROJECT OFFICERS
  TRAINING COURSE
MODULE IV
  AWARD

-------
                     THE ASSISTANCE AGREEMENT:
                           AWARD PHASE
                 RESPONSIBILITIES OF DIFFERENT OFFICES


                 DIFFERENCE BETWEEN PROGRAM
                 APPROVAL AND THE AWARD DECISION


                 PREPARATION OF FUNDING
                 RECOMMENDATION AND THE ASSISTANCE
                 AGREEMENT
VIEWGRAPH # 1
TITLE:        The Assistance Agreement: Award Phase


KEY POINTS:

     This module discusses the award stage of funding an application.
     The award stage consists of making the program and award
     decisions; preparing the funding recommendation package and
     the assistance agreement; notifying the Congressional delegation,
     various EPA offices, and the recipient, and executing the
     assistance agreement.
     During the award phase, the PO and the GMO must prepare
     various documents, including the funding
     recommendation/Decision Memorandum and the assistance
     agreement.
    5/23/94                      4.1

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                   OVERVIEW OF THE AWARD PHASE
Program Office
IS8U8S
Programmatic
Approval

—
Financial Management
Office (Regions)
Allowance Holder (HO)
Cammtte Funds

—
Program onioe
Prepares/Approve*
Funding
twconifnondctlon
i
SRO Reviews Award*
Ovw Thmhokts
-*
QUO Prepares
Aaeletanoe
Agreement/ Amendment

—
Award Official Execute*
the

1
               GAD notifies the
              Congressional Affairs
                 Office
5 Day Watting Period
                  Award mailed to
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 will review all program grants and
    State Revolving Fund grants over $5 million, and all other
    awards over $1  million to ensure that the proper funding
    mechanism is being proposed and, if there was no competition,
    there is adequate justification for not competing the award.
  5/23/94
  4.2

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

  •   The GMO prepares the assistance agreement and forwards it to the
      Award Official.  The GMO must also verify commitments against
      data in IFMS (Prevalidation) before the Award Official signs the
      award.
  •   Once the Award Official signs the assistance agreement, the GMO
      informs the Grants Administration Division which, in turn, informs
      the Congressional and Legislative Affairs, which is responsible for
      notifying the appropriate House and Senate members.
  •   After the 5 workday Congressional notification hold period has
      passed, the GMO mails the award offer to the applicant for their
      signature.
5/23/94                        4.3

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                             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).
  5/23/94
4.4

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                       CONTENTS OF FUNDING
                    RECOMMENDATION PACKAGE

DECISION MEMORANDUM
FUNDING ORDER
PROGRAMMATIC TERMS &
CONDITIONS,
COMMITMENT NOTICE
IN-HOUSE REVIEW
EXTRAMURAL REVIEWS
(OR PANEL REVIEW)
RESEARCH ONLY
ENVIRONMENTAL REVIEW,
ORD GRANTS ONLY
QUALTTY 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
N/A
X
CONTINUATION
AWARD
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: 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,
      usually more than one budget period is required. The PO
      should consult appropriate regulations for limits that apply to
      duration of budget and project periods.
5/23/94
4.5

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 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 a 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).
     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;
5/23/94                        4.6

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VIEWGRAPH # 4 (Continued)
TITLE:       Content 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);

   -  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.

   -  Justify using funds from two different appropriation accounts
     (mixing appropriations), e.g., funding a project with both
     Research and Solid Waste funds.  If more than one appropriation
     account is used, contact your Senior Budget Officer to ensure
     that 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.
5/23/94                        4.7

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                   CONDITIONS IN THE
               ASSISTANCE AGREEMENT
             Terms and
             Conditions
             Special Conditions
VIEWGRAPH # 5
TITLE:
KEY POINTS:
              Conditions in the Assistance Agreement
     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
     -  The requirement is added to emphasize a requirement for a particular
       project, recipient, or group of recipients, e.g., the approved indirect
       cost rate.
 5/23/94
                              4.8

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VIEWGRAPH # 5 (Continued)
 ITLE:       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
           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.
    5/23/94                         4.9

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                           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 its share of the legal obligation and incurs a fiscal obligation
     as well.

     Immediately after the Award Official signs the agreement, the GMO
     enters the signature date into the Grants Information Control System
     (GIGS).

     Each day, the Grants Information and Analysis Branch pulls a GIGS
     report showing awards entered since the day before and sends the
     report to the Office of Congressional Liaison (OCL).

     The OCL notifies the appropriate Congressional representative or
     designee.

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

     In emergencies, the five-day hold (workdays) for Congressional
     notification may be waived pursuant to OCL procedures.

 •   Once a recipient signs an agreement and sends it back to the 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.
 5/23/94
4.10

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                       PROJECT OFFICER
                          ROLES AND
                       RESPONSIBILITIES

               • PREPARE FUNDING PACKAGE

               • OBTAIN PROGRAMMATIC
                CONCURRENCES

               • ESTABLISH THE OFFICIAL PROJECT
                FILE

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

    •   In this phase, the PO is responsible for:
       - Preparing a funding package consisting of the: Decision
         Memorandum; Funding Order (EPA Form 5700-14), if required
         by the Grants Management Office; and Commitment Notice
         (EPA Form 2550-9), if required by the Grants Management
         Office.
       - Obtaining the necessary programmatic concurrences and
         signatures on the.funding package and sending the package to
         the next level in the concurrence chain.
       - Obtaining Office of International Activities' approval for all
         international awards.
       - Obtaining the Office of Research and Development's Office of
         Health Research approval for all projects involving human
         subjects.
       - Establishing an official file for the project (see Appendix S).
5/23/94                       4.11

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                GRANTS MANAGEMENT OFFICE
                         ROLES AND
                      RESPONSIBILITIES
               • REVIEW FUNDING PACKAGES
               • PREPARE AWARD DOCUMENT
               • ASSURE COMPLIANCE WITH
                CONGRESSIONAL NOTIFICATION
               • SEND AWARD OFFER TO
                APPLICANT

 VIEWGRAPH # 8
 TITLE:        Grants Management Office Roles and
               Responsibilities
 KEY POINTS:

    In this phase, the GMO is responsible for:
    - Ensuring that all elements of the application and funding package
      meet legal and regulatory requirements.
    - Reviewing the funding package and assuring it is complete and is
      signed by authorized officials.
    - Assuring that there is a Commitment Notice and verification of
      available funds.
    - Assuring the agreement contains all required administrative and
      program conditions, and any Special Conditions for a "High Risk"
      recipient.
    - Preparing the award/amendment document (EPA Form
      5700-20A/B).
    - Forwarding the award package to the Award Official for signature.
    - Assuring compliance with the Congressional Notification
      requirements.
    - Verifying the  Indirect Cost Rate.
    - Mailing the award offer to the applicant.
    - Confirming the statutory authority and delegation of Authority.
    - Assuring appropriate funding mechanism.
5/23/94                       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 (see 40 CFR Part 30 and EPA
      policy.)
  Financial Management Office Roles and Responsibilities

  •    The FMO will record an obligation in the  Integrated  Financial
      Management System (IFMS) immediately after receiving the
      signed agreement from the Award Official.
  Senior Resource Official
      The SRO will be reviewing and concurring on funding
      recommendations for awards over $1 million for project awards,
      and $5 million for Continuing Environmental Program grants and
      State Revolving Fund 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.

5/23/94                      4.13

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MODULE V

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        ASSISTANCE
      PROJECT OFFICERS
      TRAINING COURSE
      MODULE V

PROJECT ADMIN & MGT

-------
                     OVERVIEW
           PO RESPONSIBILITIES IN THIS PHASE INCLUDE:

           • MONITORING RECIPIENT PERFORMANCE

           • REVIEWING REPORTS

           • PROVIDING TECHNICAL ASSISTANCE

           • REVIEWING MODIFICATION (AMENDMENT)
            REQUESTS

           • HANDLING DEVIATIONS/DISPUTES

           • RESPONDING TO NONCOMPLIANCE BY
            RECIPIENT

VIEWGRAPH #1
TITLE:       Overview

KEY POINTS:

     This module discusses the general responsibilities of GMOs,
     POs, and SFOs during project administration.
     Generally,  the GMO serves as a source of administrative
     oversight for all EPA assistance agreements.  However, the
     GMO also  serves as the liaison between the Project Officer
     and SFO, and the recipient's project manager and
     administrative staff with regard to the administrative aspects
     of assistance.
     The Project Officer serves as EPA's technical manager and
     liaison with the recipient's project manager on all matters
     relating to project performance.
     The Project Officer serves as a source of programmatic
     oversight (on-site reviews; review/approval of progress
     reports, FSRs, payment requests), and provides technical
     assistance if needed.
5/23/94
                             5.1

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         MONITORING RECIPIENT PERFORMANCE

           • On-Site:
             - Performance Reviews
             - Technical Assistance
           • In-House:
             - Reports
             • Payment vs. Progressjg
             - Audit Follow-up
VIEWGRAPH # 2
TITLE:       Monitoring Recipient Performance

KEY POINTS:

    The overall management of assistance agreements is a cooperative
    effort among the POs, GMOs, and SFOs. During project/program
    performance, these monitoring duties must be performed through the
    closeout of the assistance agreement.
    Some monitoring activities may be the responsibilities of more than
    one EPA office to help ensure that potential problems are identified
    and proper corrective actions are taken.  Examples are:
    -  Monitoring the project or budget  period end dates to ensure that
      the agreement is extended, if necessary, before the budget or
      project period expires.
    -  Monitoring recipient performance.
      Responding to allegations of mismanagement by recipient
      employees or others.
    -  Responding to audit reports on an assistance agreement.
    Besides audits, EPA performs a variety of other recipient monitoring
    activities, both on-site and "in-house" (at Headquarters or a Regional
    Office).
5/23/94                     5-2

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VIEWGRAPH # 2 (Continued)
TITLE:        Monitoring Recipient Performance

KEY POINTS:
 On-Site Reviews include the following:
 •   Mid-year and end-of-year reviews to evaluate recipient
     performance. These reviews are required under the "Performance
     Based Assistance Policy" for Continuing Environmental Program
     Grants, and are strongly encouraged for the other programs.

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

 In-House Reviews include:

 • Reports:
     - Financial Status Reports: The SF 269, "Financial Status Report"
       must be reviewed to ensure that the recipient uses EPA funds
       properly.  This review is done by the GMO as well as the  PO.
       The PO should review the report in connection with the progress
       reports.  If there appears to be a discrepancy between the
       financial information on the SF 269 and progress on the
       project/program, the PO should determine if there is in fact a
       problem, or if the discrepancy can be satisfactorily explained.
     - Progress Reports: The frequency of these reports will vary with
       the program. The frequency will usually be required in  a
       regulation  or by program policy, but the reports should not be
       required more often than the program needs.  (However,  they
       cannot be  required more often than quarterly.) The content of
       the report will also vary with the program.   Each program office
       must determine what information they need to adequately
       monitor the recipient's technical and financial progress.
     5/23/94                       5-3

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VIEWGRAPH # 2 (Continued)
TITLE:       Monitoring Recipient Performance

KEY POINTS:
      o The PO should review the recipient's progress against the
       rate of expenditure, and if there appears to be a problem,
       notify other EPA offices to determine what steps need to be
       taken to correct the problem.  (The progress report format
       should require the recipient to provide information on the rate
       of expenditure versus progress on the project, actual
       accomplishments, and any problems encountered during the
       performance period which may interfere with meeting
       program/project objectives.)
       o POs can obtain information on the funds disbursed for
        specific assistance agreements from the Integrated
        Financial Management System (IFMS). While a report from
        IFMS will only indicate past disbursements, the report can
        help the PO by providing information along with the progress
        reports to keep track of  the project/program. A copy of this
        report can be obtained from the Service Finance Office (or
        anyone else with access to IFMS).
    - Payment Requests: Under the reimbursement payment
      system, Regional POs should review the request and
      determine that payment should be made. For Headquarters
      awards, the Financial Management Center, Las Vegas
      performs this function. Under the ACH payment system, the
       PO will not be informed before the draw down is made.
    Communications
    -  Keep in touch with the recipient.  This is the best way to keep
       aware of what is going on in the project. Telephone calls,
       however, do not substitute for on-site visits, but may be all
       that can be done when resources do not permit on-site
       reviews.
 •   Audit Follow-up
    -  EPA uses its Management Audit Tracking System (MATS) to
      ensure complete and timely follow-up on the resolution of all
      audit (or other review) findings and the completion of all
      corrective actions.


 5/23/94                       5'4

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                    RECIPIENT  REPORTS
                Recipient Report*
VIEWGRAPH # 3
TITLE:       Recipient Reports

KEY POINTS:
    A recipient must submit reports to EPA indicating the use of
    funds, the status of accomplishments, and recipient compliance
    with administrative and program requirements.
    The GMO is responsible for obtaining administrative reports
    required by the agreement, and will follow up if the reports are
    not received. Some of these reports may be sent directly to other
    EPA offices e.g., MBE/WBE reports to the MBE Coordinator,
    which means that the PO and others should let the GMO know if
    the report was received on time.
    The PO is responsible for obtaining and reviewing programmatic
    reports to determine their adequacy. |f there are  problems with
    the content of the report or the report is not received when
    required by the application, the PO should deal directly with the
    recipient. If the situation warrants, the PO should work with the
    GMO to discuss what further action may be necessary.
    The POs and others who receive a report should let the GMO
    know when the report is received.  During closeout, the GMO will
    be asking the other offices if all reports were received when
    requested and met EPA requirements.
  5/23/94
                               5.5

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  PO RESPONSIBILITIES
FOR PAYMENT REQUESTS
                  Electronic
              • Advance Payment
                (EPA-ACH or         Tran.
                Treasury Check)       Transfer

              • Reimbursement
                Payment
                (Treasury Check)

VIEWGRAPH # 4
TITLE:       PO Responsibilities for Payment Requests

KEY POINTS:

    There are three payment methods available
    -  Advance Payment, including Working Capital Advance;
    -  Reimbursement; and
    -  Combination Advance/Reimbursement.
    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.

 •  Also, each SFO and GMO may have different arrangements for
    reviewing payment requests, e.g., the PO and the GMO may
     review reimbursement requests in some Regions, the GMO may
     review the requests in other Regions, or the SFO may review
    and process all payment requests.
   5/23/94                     5-6

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VIEWGRAPH #4 (Continued)
TITLE:       PO Responsibilities for Payment Requests

KEY POINTS:
 ADVANCE PAYMENTS METHODS

 Automated Clearing House Payment System
 •   If the recipient is on the ACH payment system, the PO and GMO
     will not generally see the requests for payment. The recipient
     sends the request directly to the SFO, and EPA has 24 hours to
     disapprove the draw down.
     If the PO wants to restrict the recipient's drawn downs (e.g.,
     cannot draw down above a certain percentage until a specific
     task or product is delivered), the PO must make'this a condition
     of the award and inform the GMO and SFO of the limitation.

     The PO may obtain a report from the Integrated Financial
     Management System (IFMS) through their budget office (or
     anyone else with access to IFMS) which may assist their
     program by providing amounts disbursed by the SFO for specific
     agreements.  While this report shows only past disbursements, it
     can help the PO by providing information  along with the
     progress reports to keep track of the project/program.

     If there is a question on payments under the ACH payment
     system, the GMO and PO must decide if there is a need to
     restrict future requests and if so, contact the SFO to decide on a
     course of action.
 Working Capital Advance
 •   If a recipient cannot met the criteria for the ACH 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.
5/23/94                      5J

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VIEWGRAPH # 4 (Continued)
TITLE:       Payment Process

KEY POINTS:

  REIMBURSEMENT PAYMENT METHOD

      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.
      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.)
      If the PO wants to restrict the recipient's request (e.g., cannot
      request above a certain percentage until a specific task or
      product is delivered), the PO must make this a condition of the
      award and inform the GMO  and SFO of the limitation.


   5/23/94                     5'8

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                   CHANGES REQUIRING PRIOR APPROVAL/
                         FORMAL AMENDMENT
                 SITUATIONS WHICH APPLY
                 TO ALL RECIPIENTS
                • ADDITIONAL
                 REQUIREMENTS FOR
                 STATE, LOCAL AND INDIAN
                 TRIBAL GOVERNMENTS

                * ADDITIONAL
                 REQUIREMENTS FOR
                 NONPROFITS

 VIEWGRAPH45
 TITLE:       Changes Requiring Prior Approval/Formal Amendment

 KEY POINTS:

    Recipients are permitted to rebudget within the approved direct
    cost budget to meet unanticipated requirements and may make
    limited program changes to the approved project. However,
    certain post-award changes cannot be made without a formal
    amendment to the agreement.
    A recipient's request for a change must be accompanied by a
    narrative justification for the proposed revision, and must be
    submitted to the PO.

    The PO should notify recipients in writing of disapprovals (with a
    copy to the GMO) of requests for changes.  This is necessary to
    answer any future claims against EPA because the recipient
    "thought" EPA had approved the change.
    The PO must forward to the GMO requests for changes requiring
    formal amendments. The PO must also include their
    recommendation for approval.

Changes Which Require a Formal Amendment

All recipients
     Any revision resulting in the increase or decrease in funds.
    Transfer of funds allotted for training allowances,  i.e., from
    direct payments to trainees to other expense categories.
    Carryover of funds.

 5/23/94                      5-9

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

KEY POINTS:

     Rebudgeting funds from construction to nonconstruction
     activities, or vice versa.
     Revisions to the objectives of the project.
     Extensions to the period of availability of funds.
 State, local government, and Indian Tribal Governments
     Cumulative transfers among direct cost categories, or, if
     applicable, among separately budgeted programs, projects,
     functions, or activities which exceed or are expected to exceed
     10% of the current total approved budget, whenever EPA's
     share exceeds $100,000.  (If less than  $100,000, the recipient
     does not need prior written approval, but should discuss with the
     PO before doing.) For example, for a grant with an EPA share of
     $150,000, the recipient transfers $15,000 from one budget
     category to another, there is no requirement for prior approval. If
     the recipient then transfers $18,000 from one category to another
     (whether from the same category as before or not), the recipient,
     must obtain prior approval from the Award Official.
     Under nonconstruction projects, contracting out or otherwise
     obtaining services of a third party to perform activities central to
     the purpose of the award.  (The procurement of equipment,
     supplies, and general support services are approved in the
     budget section.)
     Changes in key project personnel, if key personnel are
     identified in the  agreement. For research projects, this means
     a change in the project manager or principle investigator.
 Universities of Higher Education and other Non-Profits
 •   Transfer of an award from one recipient to another.
     Rebudgeting funds for indirect costs to absorb increases in direct
     costs.
   5/23/94                       5>1°

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                  CHANGES WHICH DO NOT
                 REQUIRE PRIOR APPROVAL/
                   FORMAL AMENDMENT
              Minor Adjustments to
              Methodology or Approach
              Minor Adjustments to
              Project Budget
              Staff Changes
VIEWGRAPH # 6
TITLE:       Changes Which Do Not Require Prior Approval/
             Formal Amendment

KEY POINTS:

    Recipients may need to change their projects to respond to
    changed conditions. Neither a formal amendment nor prior
    written approval is necessary for minor changes that are
    consistent with the project objective and within the scope of the
    agreement.  For example, recipients may, without prior written
    approval:

    -  Make minor changes to the methodology, approach, or other
      aspects of the project to meet objectives or to expedite
      completion.
    -  Adjust their project budgets (except for adjustments requiring
      formal amendments) provided they use the funds in
      accordance with the approved workplan/narrative, EPA
      regulations, arid 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.
 5/23/94                     5-11

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                   TRANSFERRING AN AWARD
                Transfer By Award of
                New Assistance
                Agreement
                Transfer By
                Amendment
VIEWGRAPH # 7
TITLE:       Transferring an Award

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

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

   - Terminate the existing award and make a new award. This is
     called a "novation" and 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.
  5/23/94
                              5.12

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                              DEVIATIONS
                   Deviation Requests Include:
                   •  Name, Assistance Identification
                     Number, Agreement Date, and
                     Award Amount
                   •  Section of Regulation From
                     Which a Deviation is Needed
                   •  Description of Circumstances
                     and Justifications
                   •  Statement as to Whether
                     Similar Deviation Has Been
                     Made Previously for the Project
                     in Question
VIEWGRAPH#8
TITLE:        Deviations

KEY POINTS:

     Recipients are required to comply with all EPA requirements.  In
     some cases, however, it may be necessary to "waive" (deviate)
     from a regulatory provision.  EPA does not have the authority
     to deviate from  statutory or Executive Order requirements.
     The Director, Grants Administration Division is the person
     delegated by the Administrator to approve or disapprove
     deviations from regulatory provisions.
     Recipient deviation requests for Regional awards must be
     submitted in writing to the Region or delegated State agency, as
     appropriate. The Region (generally the GMO), with input from the
     PO and the delegated State agency, as appropriate, then submits
     the request to the Director, GAD for signature.
     For deviations from Headquarters awards, the recipient sends the
     request directly to the GMO, which 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.
     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.


  5/23/94                       5-13

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VIEWGRAPH # 8 (Continued)
TITLE:        Deviations

KEY POINTS:

     - 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.
    5/23/94                       5-14

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                          DISPUTES
              Responsibility for Disputes
              Resolution


              Some EPA Actions not Subject
              to Review
VIEWGRAPH # 9
TITLE:        Disputes

KEY POINTS:

  Whenever possible, disputes between EPA and recipients
  should be resolved  at the lowest level possible.
  Each Award Official (Regional and Headquarters) may
  designate one or more Disputes Decision Officials (DDO). The
  Disputes Decision Official is responsible for deciding
  disagreements between EPA and recipients (they may also
  decide disputes with applicants).
  The most frequent disputes are a result of recipient
  disagreements with audit findings.
  The following EPA actions cannot be disputed:
  - Denials of deviation requests (40 CFR  Parts 30 and 31);

  - Bid protest decisions (40 CFR Parts 31 and 33);
  - National Environmental Policy Act decision (40 CFR Part 6);
  - Audit Resolution Board decisions (EPA Order 2750); and

  - Debarments/suspensions (40 CFR Part 29).
  For Headquarter awards,  the disputee may request that the
  appropriate Assistant Administrator review the dispute and
  render the Agency's final decision. These requests must be
  sent directly to the Assistant Administrator.


5/23/94                       5-15

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VIEWGRAPH #9 (Continued)
TITLE:     Disputes

KEY POINTS:
    For disputes of Regional awards, if a recipient disagrees with a
    decision made by a Disputes Decision Official, the disputee may
    request a review by the Regional Administrator. The Regional
    Administrator's decision is final unless the disputee requests a
    discretionary review by the Assistant Administrator of the affected
    program.  If the Assistant Administrator does not elect to review the
    dispute, the Regional Administrator's decision is the final Agency
    action.  If the Assistant Administrator reviews the dispute, the
    Assistant Administrator's decision is the final Agency action.
   5/23/94                       5-16

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                          EPA RESPONSE TO
                       RECIPIENT PERFORMANCE

                     • NONCOMPLIANCE AND HIGH
                      RISK
                     • PERFORMANCE-BASED
                      ASSISTANCE POLICY
VIEWGRAPH4HO
TITLE:        EPA Response to Recipient Performance

KEY POINTS:

   EPA officials are faced with a wide range of potential problems
   involving participants in the assistance process.  The participant may
   be an assistance recipient, a contractor, a subcontractor, or a
   supplier to a recipient.  In some cases, the problem may involve a
   technical matter which can easily be resolved by  informal discussions
   with the participant. At other times, the matter may involve
   nonperformance, poor performance, or a criminal matter which places
   the Agency's assistance programs at significant risk.
   To deal with noncompliance or high risk participants, Award Officials
   may impose special conditions on the award, find a person or
   organization non-responsible  to receive an award, issue stop work
   orders, withhold payment of funds, terminate or annul an award, or
   initiate an investigation to determine if further action is necessary.
   Further, after all administrative remedies are exhausted, the Director,
   OGD, may suspend and/or debar any person or organization from
   participation in all EPA assisted activities for a specified period of
   time.
   For Continuing Environmental Program grants, EPA developed a
   "Policy on Performance-Based Assistance" to ensure a consistent
   effort within the Agency to assess recipient performance against
   negotiated commitments, to reward accomplishments, and to correct
   problems (See Appendix L for a copy of the policy.)
   Because the remedies for recipient noncompliance may have
   ramifications outside the Agency, it is important that any Agency
   action be coordinated among  the various offices concerned. Principal
   participants in the decision to  take an action are the program office,
   GMO, and the Office of General 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.
   5/23/94                       5-17

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

 VIEWGRAPH4M1
 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.
5/23/94
                             5.18

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VIEWGRAPH#11 (Continued)
TITLE:       Project Officer Responsibilities

KEY POINTS:

    - Reviewing requests for modifications (time extensions,
      additional funding , etc.) and recommending to the GMO
      whether the agreement should be changed.
    - Recommending to the GMO whether an agreement should be
      terminated.
    - Reviewing the Financial Status Reports (SF 269 or 269a).
    - Meeting with the GMO to discuss administrative/financial
      problems and issues on an "as needed" basis.
    - Conducting periodic reviews to assure that the recipient is
      complying with the terms and conditions of the agreement.
      The PO should provide the GMO a copy of the evaluations.
    - Communicating regularly with any other program staff with
      responsibility for aspects of the project/program to keep
      apprised of the progress on issues which need resolution.

    - Assisting the recipient, where appropriate, with the development
      of an Action Plan for conducting subsequent years of the project.
    - Providing input to their GMO on recipient's requests for any
      rebudgetihg or other actions which require EPA prior approval.

    - Notifying the GMO if the recipient is not complying with the
      terms & conditions of the agreement.
5/23/94
                             5.19

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                 GRANTS MANAGEMENT OFFICE
                         ROLES AND
                      RESPONSIBILITIES

              • ADMINISTRATIVE EXPERTISE

              • ASSURE ADMINISTRATIVE
               REQUIREMENTS ARE MET

              • FOCAL POINT FOR ADMINISTRATIVE
               ISSUES

VIEWGRAPH* 12
TITLE:        Grants Management Office Roles and
               Responsibilities

KEY POINTS:
   In this phase, the GMO is responsible for:
   - Maintaining the official administrative file and ensuring that the file
     contains all required materials, records, and documentation.
    - Assuring that all reports and 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.
5/23/94                      5-20

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                              RECIPIENT
                              ROLES AND
                           RESPONSIBILITIES

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

KEY POINTS:

       In this phase, the recipient is responsible for:
       -  Expending and accounting for funds in accordance with the
         agreement, program regulations, and statutes.
       -  Accounting for total project costs and segregating allowable and
         unallowable costs.

       - Conducting procurements in accordance with the appropriate
         procurement rules, including ensuring that debarred or suspended
         bidders are not awarded a contract using Federal funds.
       -  Complying with the appropriate Disadvantaged Business Utilization
         requirements and ensuring that their subcontractors comply with the
         requirements.
       -  Recording the receipt and expenditure of program income as a
         project transaction.

       -  Complying with the appropriate property purchase, management,
         and disposition requirements.

       -  Complying with EPA requirements and the Uniform Relocation
         Acquisition Assistance and Real  Property  Acquisition Act, if real
         property is purchased under the agreement.
       -  Requesting the Award Official's required approval for a formal
         assistance amendment.
       -  Requesting the PO's approval for an informal amendment.
       -  Complying with all applicable reporting requirements, including
         submitting progress reports, Financial Status Reports, MBE/WBE
         reports.
  5/23/94                      5-21

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                        OTHER OFFICE
                         ROLES AND
                       RESPONSIBILITIES

                 • FINANCIAL MANAGEMENT OFFICE

                 • OFFICE OF GENERAL COUNSEL

                 • MBE/WBE COORDINATORS
VIEWGRAPH4M4
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")
 5/23/94                      5-22

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MODULE VI

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    ASSISTANCE
  PROJECT OFFICERS
  TRAINING COURSE
MODULE VI
CLOSEOUT

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

               Understand the Process For Closeout of
               Assistance Agreements


               Describe the Roles and Responsibilities
               During Closeout
VIEWGRAPH # 1

TITLE:      Closeout of Assistance Agreements

KEY POINTS:
     This module describes the major steps of the Closeout process for
     EPA program and project-type assistance agreements and indicates
     unique closeout procedures for: (1) Waste Water Treatment
     Construction grants (WWT construction grants), (2) Continuing
     Environmental Program grants, and (3) Superfund Cooperative
     Agreements (Superfund CAs).

     This module also describes the specific roles and responsibilities of
     EPA staff and recipients during closeout.
   5/23/94                    6.1

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                   PURPOSE OF CLOSEOUT
               Proper Closeout  Ensures the
               Completion of All:
             Technical Work
           • Administrative Work
VIEWGRAPH#2
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 unobligated funds are
      deobligated.

   •   A task force developed new agency closeout policy on all EPA
      programs. A final  policy was  issued August 27,1992, and the
      Assistance Administration Manual will be updated. (See Appendix T.)
     5/23/94
6.2

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                      ROLES AND RESPONSIBILITIES
Category
Technical Issues
Rnancial Issues
Legal Issues
Institutional Issues
(Super-fund Clean ups)
Property
Inventions
Recipient Role
• Submits Final Technical
Report/Product
• Submits final FSR and/or
final payment request
• Completes Cost Recovery
Requirements (Supertund)
Provides Notification of
Settlements (Superfund)
• Provides Assurance that
Institutional Controls, if
Required, are in Place
• Requests disposition
Instructions
• Submits inventions
report
EPA Role
• PO provides comment to recipients
• PO Notifies GMO of acceptance or
rejection
• FMO Settles Billings and Payments
• GMO & PO Review and Approve
Rnancial 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 Provjdes Disposition
Instructions'
• OGC Resolve patent interest
• GMO provides instructions
VIEWGRAPH # 3

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, audit is
      not a requirement prior to closeout.
     5/23/94
6.3

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                              TIMING OF CLOSEOUT
                TYPE OF AGREEMENT



                CONTINUING ENVIRONMENTAL
                PROGRAMS
                SUPERFUND

                 Pre-Remedial CA


                 Single Site CA

                 Multi-Site CA



                 Core Program CA



                AH
   TIMING OF CLOSEOUT

   When Project Ends

   When previous Continuation Agreement
    Ends
   When PA &S! Activities Are
    Completed

   When Work Is Completed
   When Work Is Completed at Each
    Site/Activity and upon Completion of all
    Site Activities
   When Managerial and Administrative
     Responsibilities Have Been Completed

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

         Formal closeout can occur only when all parties are satisfied with the
         final product, 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 closeoui.
         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 Continuing Environmental Program  grants begins on the
         date the previous, most recent, Continuation Agreement expires.
         Closeout of Superfund Cooperative Agreements occurs at the following
         times:
              Pre-remedial - when all preliminary assessment/ site inspection
              (PA/SI) activities have been  completed or terminated at all sites.
              Single-Site CA - when all activities covered by the statement of
              work (SOW) are completed or terminated at that site.
         5/23/94
6.4

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VIEWGRAPH # 4 (CONTINUED)
TITLE:      TIMING OF CLOSEOUT

KEY POINTS:
          Superfund Multi-Site Cooperative Agreement (MSCA) - is
          somewhat different from other CAs.
           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.
      5/23/94                    6.5

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                            INITIATING CLOSEOUT
                 To Initiate ClOMout, GMOs Must:
                 •  Obtain "Status Report of Projects
                   Completed But Not Closed Out"

                 •  Ensure the Accuracy of the Status
                   Report

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

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.
      5/23/94
6.6

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                   DELIVERY OF PRODUCTS AND REPORTS


                 THE RECIPIENT MUST DELIVER:
VIEWGRAPH # 6
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. (See Appendix U for property
     disposition requirements.)
    Other reports:
    -  Invention Report - EPA Form 3340-3: If the project resulted in
      any inventions being  produced, the recipient must report them on
      this form to the Award Official. The PO should be aware of any
      inventions, and should remind the recipient to submit this report;

      Request for final payment: The PO should remind the recipient
      to submit a final SF 270, "Request for Payment," 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,  and
    -  MBE/WBE Reports -  SF 334: The recipient must submit a final
      report on their contracting with MBE/WBE firms.
    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.

  5/23/94                     6.7

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

KEY POINTS:

    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 of the debt in
    order that IFMS can establish an accounts receivable. The
    assistance agreement cannot be closed out until the debt is
    paid.
    After receiving  and  reviewing all deliverables, the GMO will
    prepare a closeout letter/amendment (using the Assistance
    Adjustment Notice (EPA Form 5700-42), indicating the
    disposition of any unused funds. At this time, the GMO
    notifies the FMO to deobligate any unobligated balances.
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 V, page 7 for the exact wording of the disclaimer).
    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," 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.)

 5/23/94                      6.8

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

 KEY POINTS:
   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.
5/23/94                     6.9

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                      PROJECT OFFICER
                         ROLES AND
                      RESPONSIBILITIES

               CERTIFY ALL WORK PRODUCTS
               SUBMITTED

               RECOMMEND DISPOSITION OF
               PROPERTY

               RESPOND TO OIG QUESTIONS
VIEWGRAPH # 7
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.
  5/23/94                      6.10

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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 # 8
TITLE:        Grants Management Office Roles and
              Responsibilities

  In this phase, the GMO is responsible for:
  - Initiating the closeout process by sending the recipient and PO a
   reminder letter 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 that the recipient complies with the
   recommendations.
   5/23/94                     6.11

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                      OTHER PLAYER'S
                         ROLES AND
                      RESPONSIBILITIES

                   RECIPIENT

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

KEY POINTS:

• In this phase, the recipient is responsible for:

    - Responding to any inquiries from the PO and GMO.
    - Submitting technical, financial, and administrative reports as
      required.
    - If an audit is conducted, providing the auditors with all necessary
      information, documentation, etc. related to the agreement.
    In this phase, the 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.
5/23/94                     6.12

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            DOs and DONTs
   VIEWGRAPHtflO
   TITLE:     Dos and Don'ts

   KEY POINTS:
5/23/94                  6.13

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MODULE VII

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    ASSISTANCE
  PROJECT OFFICERS
   TRAINING COURSE
MODULE VII
    AUDIT

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                          AUDITS

               THIS MODULE WILL:

                 •  DESCRIBE THE BASIC AUDIT
                   PROCESS

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

        KEY POINTS:


           The Inspector General Act authorizes the Inspector General
           (IG) to have access to all records, reports, audits, reviews,
           documents,  papers, recommendatiphs, 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.
        EXERCISE:

           Discuss the  following questions based on the  audit experience
           of the class members.
           How can an audit help us perform our jobs?
        •   What does an auditor look for during an audit?
5/23/94                       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).
5/23/94                         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 alienability of costs claimed under the
                assistance agreement or contract and to ensure
                compliance with the applicable requirements and award
                conditions.
             -   Indirect cost audits are reviews conducted to determine
                whether the prospective indirect cost rate properly
                allocates allowable costs.
           Audits of recipients may be  requested by the 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.
           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.
5/23/94                         7.3

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                          AUDIT OFFICIALS
                                        •  Inspector General

                                        •  Agency Audit
                                          Follow-up Official

                                        •  Disputes Decision
                                          Official

                                        •  Audit Follow-up
                                          Coordinator

                                        •  Action Officials

                                        •  Award Officials
     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 responsible for
        resolving all action regarding recipients.  This  person also
        serves as the Action Official for grant reports.
        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, it is the Disputes Decision Official.
        The Award Official is responsible for designating the
        Disputes Decision Official.
5/23/94
7.4

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                             THE AUDIT PROCESS
L
Entrance Conference
1
t
f

1

1

1

1
Advisement of Findings
f
Exit Conference
1
Draft Report
t
Final Report
1
Audit Resolution
|

|

|

|

J
      VIEWGRAPH # 5

      TITLE: The Audit Process
      KEY POINTS:

          At the entrance conference, the auditors explain the purpose and
          scope of the audit and receive comments from the organization
          being audited regarding potential audit areas. All personnel with
          extensive knowledge of the area being audited should be at the
          entrance conference. The DIG will ask the AFC for the program
          and GMO contacts for this audit, and will provide a list of key audit
          personnel.

          During the audit, the auditors provide the organization with
          feedback about preliminary findings and developing issues. If the
          organization believes that any of these findings are invalid, based
          on factual information, it should discuss this with the auditors.
          Further, significant or sensitive findings should be brought to the
          attention of the organization's senior management immediately.
          At the exit conference, the auditors discuss the audit findings with
          the organization to clarify any questions they may have about the
          audit.
          Shortly after the audit is completed, a draft report is issued. The
          report contains the auditor's findings and documentation to support
          these findings.
5/23/94                         7.5

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      VIEWGRAPH # 5 (cont.)

      TITLE: The Audit Process
      KEY POINTS:

            After receiving the draft report, the organization is expected to
            provide a written response to the audit findings contained in the
            draft report within 30 days.  The organization's response should
            concur with the findings or provide an explanation for its
            disagreement.  If the organization has planned or implemented
            corrective actions, these should be documented in the response
            as well.
            After the exit conference, the auditors develop a draft audit report
            containing their findings and recommendations.  After receiving
            this report, the organization's management has 90 days, if the
            findings are over $100,000, to provide OIG with a response that
            either documents concurrence with the audit report or proposes
            alternative corrective actions for addressing the findings.
            Audit resolution occurs either when a "final determination" is
            issued (in the case of an external audit), or when a "final
            response" is issued (in the case of an internal audit).  For EPA
            OIG audits containing significant findings of $100,000 or more,
            the Action Official must obtain the concurrence of the EPA OIG
            on proposed corrective action.
        •    Under the Inspector General Act Amendments, EPA
            management must track audit follow-up actions until all corrective
            actions identified in its management decision are complete.
            Further, EPA management must report  to Congress
            semi-annually on the status of audit resolution and follow-up
            activities, as well as provide an explanation for audits not
            resolved within 180 days and final actions that have remained
            incomplete for one year or more. Currently, EPA's Resource
            Management Division prepares the semi-annual  report to
            Congress on audit resolution and implementation of corrective
            action.
5/23/94                        7.6

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                    SURVIVING AN AUDIT


                    • DOCUMENTATION

                    • COURTESY

                    • PREPARATION

                    • COMMUNICATION

       VIEWGRAPH # 6
       TITLE:      Surviving an Audit

       KEY POINTS:

          To help make the audit process proceed as smoothly .as
          possible, POs should keep the following in mind:
          Documentation:

          - The PO must document in the official Project File all
            decisions, communications, memos, etc. from the beginning
            of the agreement (see Appendix S).  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. Remember, everything
            in the file is subject to review, e.g., records, memos, and
            telephone messages.
       •   The following are some guidelines to follow when interacting
          with the auditors:
          Courtesy.

          - Maintain good working relationships with the auditors.
          - Use audit as an opportunity to identify and address
            weaknesses.
5/23/94                      7.7

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     VIEWGRAPH #6 (Continued)
     TITLE:        Surviving an Audit
     KEY POINTS:

     Preparation.
         - Determine what auditors will look for.
         - Cooperate & demonstrate steps already taken to resolve issues
           oi 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.
5/23/94                         7.8

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                         bOS AND DONTS
   VIEWGRAPH #7
   TITLE:       Dos and Don'ts

   KEY POINTS:
5/23/94                     7.9

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MODULE VIII

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          ASSISTANCE
         PROJECT OFFICERS
         TRAINING COURSE
        MODULE VIII

INTERAGENCY AGREEMENTS

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                        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, and
          - "Servicing Agency," which provides the goods or services.
     •    lAGs are not assistance agreements.  They are used for different
          purposes. lAGs and assistance agreements are alike in the
          monitoring requirements for POs.
          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.
          EPA can provide funds to States and local governments only
          under an assistance agreement.
5/23/94                         8.1

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

     KEY POINTS:

     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 W 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 lead a Superfund 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.
5/23/94                          8.2

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

     KEY POINTS:

      International Agreements.
         These are 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 foreign 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 pur
         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.
         EPA can accept funds directly from the foreign governments and
          organizations to provide services to those entities (funds-in). These
          "foreign"agreements are authorized  by the Foreign Assistance Act
         and must be approved by the Trade Development Agency.
5/23/94                           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 Act is the general authority which authorizes Federal agencies
         to exchange goods and services and to reimburse one another.
         - The primary purpose of the Act is to allow an agency to obtain
          goods or services from another agency to improve economy and
          efficiency in the government.
         - This Act 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, EPA  provides the service or
          goods with its own staff or through agency contracts.
         - The "Ordering Agency" (Agency who paying for the service or
          goods received)  must also determine that the work does not
          conflict with any other  agency's authority or responsibility.

         - If the work involves the use of a commercial or industrial activity
          operated by the "Servicing Agency" (Agency providing the goods
          or service), the "Ordering Agency" must also determine that the
          acquisition conforms to the  "contractor versus government
          performance" requirements of the Federal Acquisition
          Regulation, which explains when the Federal government may
          compete with the private sector.

5/23/94                          8.4

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 VIEWGRAPH #2 (Continued)
 TITLE:       Authority

 KEY POINTS:

  COOPERATION AUTHORITIES

      EPA also has authority to enter into lAGs with other Federal agencies
      under "cooperation" provisions of our program statutes, e.g., §103 of the
      Clean Air Act, and §104 of the Clean Water Act. If the receiving agency
      will use any of the funds to fund a grant or cooperative agreement, EPA's
      IAG must identify EPA's statutory authority to award a grant or
      cooperative agreement.
  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.

      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.
5/23/94                           8.5

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                          IAG GUIDANCE
                     • COMPENDIUM


                     • PRINCIPLES OF
                       FEDERAL
                       APPROPRIATIONS
                       LAW
  VIEWGRAPH #3

  TITLE:       IAG Guidance


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

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

         - Appropriations law. Many IAG issues revolve around interpretation of
           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, Grants Information and Analysis Branch. Program offices may
         develop office-specific procedures where appropriate.
5/23/94                          8.6

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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 in the 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
         lAGs which cite the cooperation provisions of EPA's statutes for
         authority are available until the project period ends.  This includes
         funds used for personnel, travel, and other expenses, as well as
         funds used for contracts and grants and cooperative agreements.
5/23/94                           8.7

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                  CINCINNATI FINANCIAL
                  MANAGEMENT CENTER

                   RECORDS OBLIGATIONS

                   DEOBLIGATES UNUSED
                   FUNDS
   VIEWGRAPH # 5
   TITLE:       Cincinnati Financial Management Center

   KEY POINTS:
       The Cincinnati Financial Management Center (CFMC) is the
       Servicing Financial 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.
5/23/94                       8.8

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                     PAYMENT/BILLING

                   PAYMENT SYSTEM

                   POs MUST APPROVE
                   PAYMENTS

                   BILLING SYSTEM

                   POs MUST PROVIDE COST
                   INFORMATION
        VIEWGRAPH #6
        TITLE:      Payment/Billing

        KEY POINTS:

          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.
          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.
          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).


5/23/94                       8.9

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   VIEWGRAPH #6 (Continued)
   TITLE:      Payment/Billing

   KEY POINTS:


   •   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 before CFMC will make the payment. If there is a
       problem with the bill, EPA has 90 days to charge back to the account.
   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.
5/23/94                          8.10

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                           EPA REQUIREMENTS

                       • ASSISTANCE VS ACQUISITION

                       • TRAVEL

                       • MBE/WBE

                       • SUPERFUND COST RECOVERY
                         AND AUDIT

                       • INDIRECT COST

     VIEWGRAPH # 7
     TITLE:       EPA Requirements

     KEY POINTS:

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

        If an IAG budget includes indirect costs, the IAG must include an
        indirect cost condition.

5/23/94                           8.11

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

                • ASSIGN PROJECT OFFICERS

                • NEGOTIATE SCOPE OF WORK, FUNDING
                 AND BUDGET

                • OBTAIN NECESSARY APPROVALS

                • PREPARE FUNDING PACKAGE

                • ASSURE PERFORMANCE

                • REVIEW AND APPROVE PAYMENT REQUESTS

                • CLOSE OUT AGREEMENTS

     VIEWGRAPH#8
     TITLE:       Program Office 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
        costs necessary to carry out the project, e.g., personnel, equipment,
        extramural agreements, travel,  and indirect cost.

        After the scope of work is determined, the PO must prepare a Decision
        Memorandum which:

        -  Summarizes EPA's objectives to be met through the proposed IAG
          and certifies that the proposed IAG is consistent with the EPA program
          office's mission.
        -  States the IAG is the best means for achieving the objective and, if the
          Economy Act is the statutory  authority for the agreement, how the IAG
          will enhance government economy and efficiency.

        -  Assures all technical and scientific measures will be performed in
          accordance with an approved Quality Assurance Plan and, if required,
          include a Quality Assurance form signed by the Quality Assurance
          Officer.

5/23/94                          8.12

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     VIEWGRAPH # 8 (Continued)
     TITLE:       Program Office Responsibilities

     KEY POINTS:

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

        - Includes a statement that any funds to be used on an assistance
          agreement will not be for work that is for the direct benefit or use of the
          Federal government.
        The Decision Memorandum must be signed by the Decision Official (the
        individual in the program office delegated the responsibility for approving
        the office's use of funds -- generally the Allowance Holder.)

        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.
        If the IAG includes funds for a detail for an EPA employee for more than
        120 days, the package must include a completed Personnel Action form
        (SF  52).
        The PO must prepare EPA Form 1610-1 for each IAG. (GMOs will assist
        in preparing this form).

        The PO must determine and provide any special conditions which the
        GMO will add to the IAG, e.g., reporting.

        The PO must determine the method of payment. Generally, payment is
        made by reimbursement, i.e., after costs are incurred.  In  some cases,
        however, it may be necessary to make advance payments.  In such
        cases, the funding package must include a justification for advance
        payment. If the agreement is "funds-in" the PO should discuss payment
        method with the other agency's Project Manager.
        The PO must assure products to be produced under an IAG are  provided
        in a timely manner.
        Although the relationship under an IAG is with another Federal agency,
        inadequate performance should be considered in deciding whether to
        undertake future cooperative efforts with that agency.


5/23/94                           8.13

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                        GMO RESPONSIBILITIES

                     • PREVALIDATE COMMITMENT

                     • PREPARE AWARD

                     • SIGN IAG AND DISTRIBUTE

                     • MONITOR PROJECT TO
                      ASSURE TIMELY
                      COMPLETION AND CLOSEOUT

    VIEWGRAPH # 9
    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 funds, if appropriate.
         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 program wants a report, they
         can contact their GMO.
         The GMO staff will prepare a transmittal letter and submit the
         documents to the Action Official for signature, send the IAG to the
         other Agency for signature, and distribute copies (e.g., PO, Budget,
         other Agencies, Cincinnati).
         -  In Headquarters, the Action Official is the Chief, Grants
           Information and Analysis Branch, GAD.
         - In the Regions, the Action Official is the Regional Administrator or
          their designee.
         The GMO staff  maintains the official IAG file, and the PO maintains
         files which document their project  management activities.
         When lAGs are completed, the GMO will work with the PO to assure
         that the IAG is closed out in a timely manner.

5/23/94                           8.14

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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  States of America vn, Congress assembled, That this Act be  Federal Grant
cited as *he "Federal  Grant  and Cooperative Agreement  Act of  "d Cooperative
1977"                                                             Agreement Act of

                      FINDINGS AND PURPOSE
SEC. 2. (a) The Congress finds that—
    (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 they  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 note.

                                                                  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 terra—
                     (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 aiiy 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—
                     '•>)  whenever  the principal purpose of the instrument is the
                   acquisition, by purchase, lease, or barter, of property or services
                   for the direct benefit or use of the Federal Government; or
                    (2)  whenever  an executive agency determines in a specific
                   instance that  the  use of  a type of procurement  contract is
                   appropriate.
                                   USE  OF GRANT AGREEMENTS

41 USC 504.        SEC. 5. Each executive agency shall use a type of grant agreement as
              the legal instrument reflecting a relationship between the Federal Gov-
              ernment and a State or local government or other recipient whenever—
Transfer*.             (i)  the principal purpose of the relationship is the transfer of
                   money, property, services,  or anything of value to the State or
                   local government o. 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
                   property or services for the direct benefit or use of the Federal
                   Government; 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  Transfers.
    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
                                                                  agreements.
                                                                  41 USC 506.
                                                                  Scientific
                                                                  research.
  SEC. 7. (a) Notwithstanding any other provision of law, each ezecu- Contracts, grant
tive agency authorized by law to enter into contracts, grant or coopera- « cooperative
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 OF FEDERAL ASSISTANCE PROGRAMS

  SEC. 8.  The Director of the Office of Management and Budget, in 41 USC 507.
cooperation with the executive agencies, shall undertake a study to
develop a better understanding of alternative means 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 Contents.
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 Consultation.
representatives of the executive agencies,  the Congress, th  General
Accounting Uiiice, and Sta-e and local governments, other recipients
and other interested members of the public. The result of the  study Report to
shall be reported to the Committee on Government Operations of the congressional
House of Representatives and the Committee on Governmental Affairs comniltlee8-
of the Senate at the earliest practicable date, but m 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
  \rhirh thp use of  each aonears to  be most  desirable,  (2) detailed
n

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 92 STAT. 6
 41 USC 508.
Repeal; effective
date.
41 USC 501 note.
41 USC 509.
Exec pted
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, ana for other
 purposes", approved September 6, 1958 (72 Stat. 1793; 4.2 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 
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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
                           7CR DISTINGUISHING BETWEEN
                           ASSISTANCE AND ACQUISITION

        1.   PURPOSE AND APPLICABILITY.    The purpose of  this policy  --• t -
        clarify  the  criteria  for and  to  achieve consistency  in i.-.e
        selection and use of contracts,  cooperative agreements and grar.ns
        by all  EPA offices and laboratories. This  policy expands en ir.e
        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  Assiscar.ee
        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 outs ice
        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  (TAG

             The Federal Grant and Cooperative Agreement Act of  1977  ("CAA
        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 or.
        implementing  the  Act was  issued by  the  Office of Management .T-.-I
        Budget  (OMB) in 1978, (see 43  Fed.  Reg. 36860  [August 18,  197°.

             The Act  was  based on a congressional finding that  exec-.."
        agencies  were  not  adequately differentiating between procui  -   ~

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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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EPA ORDER                                         57XX XXX
                                                  XXXXXX

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 subsequent Redelegations. The Award Official

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EPA ORDER                                         57XX XXX
                                                  xxxxxx

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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EPA ORDER                                         57XX XXX
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          (3)  In most  instances,  offices and  laboratories must
allow at least 60 days lead time (Superfund awards require 90 davs^
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  quality  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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EPA ORDER                                         57XX XXX
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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  6r services from a
recipient  for  direct Agency  for 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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EPA ORDER                                         57XX XXX
                                                  XXXXXX

          (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.
                                8

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EPA ORDER                                         57XX XXX
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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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EPA ORDER                                          57XX XXX
                                                   XXXXXX

                (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.
                                10

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EPA ORDER                                         57XX XXX
                                                  XXXXXX

     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.
                                11

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EPA ORDER                                         57XX XXX
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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 authorises 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.
                                12

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EPA ORDER
57XX XXX
XXXXXX
10.   FAILURE TO COMPLY. In certain circumstances,  it may becone
apparent that an individual office, laboratory,  or recipient failed
to comply with this Order by awarding an assistance agreement -nere
a contract was required.

     Individuals  discovering  such situations  are   directed  to
consult with representatives-from the EPA office or laboratory, the
Award Official-,  a'nd 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 seek 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.
                                               MAR  22
                                13

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                                                  APPENDIX A
             ACQUISITION AMD ASSISTANCE CASE  STUDIES

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

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EPA ORDER                                         57XX XXX
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CASE STUDY #1

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.
                                15

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EPA ORDER                                         57XX XXX
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CASE STUDY #1  (continued)
QUESTION C:    Could this award be made to a  State or  local entity
               covered  by OMB  Circular  A-87  or an  educational
               institution covered by circular A-21?

ANSWER C:      Yes, if there is no statutory prohibition to do so.

QUESTION D:    Can  this  State  recipient  pay  travel  and  other
               conference  costs  for state and  other  non-federal
               participants at this conference?

ANSWER D:      Yes. A-87 and A-21 do not''directly address
               "participant costs" as does A-122; they  only address
               "selected items" of cost. However, both Circular A-
               87 and A-21 provide that if an item of cost is not
               addressed, a determination of allowability should be
               based on the treatment of similar items. Moreover,
               EPA believes  it would  not  be  appropriate to treat
               State   and   local  government   or   educational
               institutions  more  restrictively than  non-profit
               organizations in this regard. Therefore,  consistent
               with Circular A-122, as long as not  prohibited by
               the authorizing statute  (e.g.  Clean  Water Act), a
               state or  local recipient may  pay travel and other
               allowable conference costs for participants at an
               EPA funded conference.
                                16

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EPA ORDER                                         57XX XXX
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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.

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

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

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EPA ORDER                                         57XX XXX
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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.
                                18

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EPA ORDER                                         57XX XXX
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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.
                                19

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EPA ORDER                                         57XX XXX
                                                  XXXXXX

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.
                                20

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EPA ORDER                                         57XX XXX
                                                  XXXXXX

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.
                                22

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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
   y
                             24 1992
MEMORANDUM


SUBJECT:



FROM:
          EPA Involvement in Grantee Personnel and Contractor
                          Grant^ and Cooperative Agreements
TO:
Sallyanne ifarper,'Acting Deputy Assistant Administrator
  for Finance/ and Acquisition
             [£4^Wwt/V_
     H. "Skinner, Deputy Assistant Administrator
Office of Research and Development

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

     Under an assistance agreement, EPA transfers money,
property, services or anything else of value 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 to provide any financial benefit to themselves or others"
(40 CFR 3.103(d)).  The Code also states that EPA employees "must
not take any action, whether specifically prohibited or not,
which would result in or create the reasonable appearance of ...
giving preferential treatment to any organization or 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 nay 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, "GENERAL REGULATION
  FOR ASSISTANCE AGREEMENTS FOR
   OTHER THAN STATE AND LOCAL
         GOVERNMENTS"

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Environment*)! Protection Agency                                        Pt. 30

 SUBCHAPTER  B—GRANTS  AND  OTHER FEDERAL ASSISTANCE
PART   30—GENERAL   REGULATION
  FOR  ASSISTANCE PROGRAMS FOR
  OTHER  THAN  STATE AND  LOCAL
  GOVERNMENTS
 Subpart A—What is the Purpose and Scop* of
             this Regulation?

Sec.
30.100  What is the purpose of  this regula-
   tion?
30.101  What is the  scope of this  regula-
   tion?
30.102  What laws authorize EPA  to issue
   this regulation?

  Subpart ft—What Definitions Apply to this
               Regulation?

30.200, What definitions apply to this regu-
   lation?

 Subpart C—How do I Apply for and Receive
               Assistance?

30.300  What activities does EPA fund?
30.301  To whom  does  EPA award assist-
   ance?
30.302  How do I apply for assistance?
30.303  What steps must I  take when filing
   a standard application?
30.304  Is the information  I submit to EPA
   confidential?
30.305  How do I find out if EPA approved
   or disapproved my application?
30.306  How long will I have to complete my
   project?
30.307  How much must I contribute to the
   funding of my project?
30.308  When may I begin incurring costs?
30.309  What is the effect of accepting an
   assistance agreement?

     Subpart D—How does EPA Pay Me?

30.400  How does EPA make payments?
30.405  Can  I assign my payment to anyone
   else?
30.410  How does  EPA determine allowable
   costs?
30.412  How are costs categorized?

  Subpart E—How do I Manage My Award?

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

 Subpart F—What Other Federal Requirements
           Must I Comply With?

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

 Subpart O—Can an Assistance Agreement be
               Changed?

30.700  What  changes to my  assistance
   agreement require a formal amendment?
                                      325

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§30.100
         40 CFR Ch. I (7-1-91 Edition)
Sec.
30.705  What changes can I make to my as-
    sistance  agreement without  a formal
    amendment?
30?710  Can I terminate a part or all of my
    assistance agreement?

  Subpart H—Hew do I Clot* out my Project?

30.800  What records and reports  must I
    keep after I complete my project?
30.802  Under what conditions will I owe
    money to EPA?

 Subpart I—What Measures may EPA Take far
             Non-compliance?

30.900  What measures may EPA take for
    non-compliance?
30.901  What are  the  consequences  of a
    stop-work order?
30.902  What are the consequences of with-
    holding payments?
30.903  What are the consequences of ter-
    mination for cause?
30.904  What are the consequences of an-
    nulment?
30.905  May I request a review of a termina-
    tion, or annulment?
30.906  What are the consequences of sus-
    pension or debarment?

     Subpart  J—Can I got an Exception
    ('•Deviation") From Those Regulations?

30.1001  Will  EPA approve any exceptions
    to these regulations?
30.1002  Who may request a deviation?
30.1003  What information must I include
    In a deviation request?
30.1004  Who approves or disapproves a de-
    viation request?
30.1005  May I  request a review of ,  devi-
    ation decision?

  Subpart K—What Policies Apply to Patents,
          Data, and Copyrights?

30.1100  What  assistance  agreements  are
    subject to EPA patent rules?
30.1101  What Federal patent laws or poli-
    cies govern my assistance agreement?
30.1102  What are my invention rights and
    my reporting requirements if my award
    is other  than an award under section
    6914 of RCRA?
30.1103  What are my invention rights and
    obligations if I am a profitmaking firm
    with an award under section  6914  of
    RCRA?
30.1104  Can  I  get a waiver from section
    6981(0 of RCRA?
30.1106  Do the patent rules apply  to suba-
    greements?
30.1108  Does EPA require any type of li-
    censing of background patents that I
    own?
Sec.
30.1112  Are there any other patent clauses
   or conditions that apply to my award?
30.1130  What rights In data and copyrights
   does EPA acquire?

  Subpart L—How are Disputes Between EPA
        Officials and me Resolved?

30.120C  What happens  if an EPA official
   and I disagree about an assistance agree-
   ment requirement?
30.1205  If  1 file a  request for review, with
   whom must I file?
30.1210  What must I include in my request
   for review or reconsideration?
30.1215  What are  my rights after I file a
   request for review or  reconsideration?
30 1220  If  the Assistant Administrator con-
   firms the  final decision of  the Head-
   quarters disputes decision official, may I
   seek further administrative review?
30.1225  If  the Regional Administrator con-
   firms the final  decision  of the Regional
   disputes decision official, may I seek  fur-
   ther administrative review at EPA Head-
   quarters?
30.1230  Will I be charged interest if I  owe
   money to EPA?
30.1235  Are there any EPA decisions which
   may not be reviewed  under this subpart?

          APPENDICES TO PART 30

APPENDIX A—EPA PROGRAMS
APPENDIX   B—PATENTS   AND  COPYRIGHTS
   CLAUSES
APPENDIX  C—RIGHTS  IN DATA  AND COPY-
   RIGHTS
APPENDIX D—PART 30 REPORTING  REQUIRE-
   MENTS
APPENDIX E—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.; 1 U.S.C. 136  et seq.; 15
U.S.C. 2601 et seq.; 42 U.S.C. 9601 et seq.
  SOURCE:  48  FR  45062. Sept.  30.  1983.
unless otherwise noted.
 Subpart A—What is the Purpose and
       Scope of this Regulation?

§30.100  What  is the purpose of this regu-
    lation?
  (a) The U.S. Environmental Protec-
tion  Agency (EPA) is responsible  for
protecting and enhancing the quality
of the environment. To achieve these
objectives, EPA may  award assistance
in  the  form  of  grants,  cooperative
agreements, or fellowships  to support:
                                       326

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Environmental Protection Agency
                            §30.200
(1) State and local  pollution control
programs; (2) research, demonstration,
or  training projects;  and  (3)  other
projects that advance EPA's mission.
This regulation tells how to apply for
and manage an EPA project, describes
EPA involvement in the process, and
identifies recipients'  responsibilities.
Other EPA assistance regulations sup-
plement  these. They are found in  40
CFR  part 32  (Debarment), part  33
(Procurement Under Assistance Agree-
ments), part 35 (State and Local As-
sistance), part 40 (Research and Dem-
onstration),  part  45  Cn-'aining) and
part 46 (Fellowships).
  (c) This regulation incorporates the
requirements  of Office of Manage-
ment  and Budget  (OMB) Circulars
and EPA Orders.
  (d) Recipients must  provide the  re-
porting information required in this
part to be eligible for  EPA assistance
awards.
  NOTE: The OMB clearances required  by
the Paperwork Reduction  Act are identified
in Appendix D to this part.

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

§ 30.102  What laws authorize  EPA to issue
    this regulation?
  Reorganization Plan Number 3  of
1970 and the following statutes  au-
thorize the  Administrator  of EPA  to
issue this regulation.
  (a) The Clean Water Act. as amend-
ed (33 U.S.C. 1251 et seq.Y,
  (b) The Clean Air Act, as amended
(42U.S.C. 1401 et seq.);
  (c) The Solid Waste Disposal Act, as
amended (42 U.S.C. 6901 et  seq.);
  (d) The Safe Drinking Water Act, as
amended (42 U.S.C. 300f et seq.Y.
  (e) The Federal Insecticide,  Fungi-
cide, and Rodenticide Act. as amended
(7U.S.C. 136 et seq.);
  (f) The Toxic Substances Control
Act (15 U.S.C. 2601 et seq.Y,  and
  (g) The Comprehensive Environmen-
tal  Response, Compensation,  and Li-
ability Act of 1980 (42 U.S.C. 9601 et
seq.).

[48  FR 45062. Sept. 30, 1983; 49 FR 38944.
Oct. 2. 1984]

  Subpart B—What Definitions Apply
         to this Regulation?

§30.200  What  definitions  apply  to  this
    regulation?
  Allowable costs. Those project costs
that are: eligible,  reasonable, neces-
sary, and allocable to the project; per-
mitted by the appropriate Federal cost
principles,  and  approved by  EPA in
the assistance agreement.
  Applicant Any entity  that  files an
application or unsolicited proposal for
EPA financial assistance  under this
subchapter.
  Assistance agreement  The legal  in-
strument EPA uses to transfer money,
property,   services,  or  anything  of
value to a recipient  to  accomplish a
public purpose. It is either a grant or a
cooperative agreement and will speci-
fy:  budget and project periods;  the
Federal share of eligible project costs;
a description of the work to be accom-
plished; and any special conditions.
  A ward official  The  EPA  official
with the authority to execute assist-
ance agreements and to take other ac-
tions authorized by  this  subchapter
and by EPA Orders.
  Budget period. The  length  of time
EPA specifies in an assistance agree-
ment during  which the recipient may
expend or obligate Federal fu-   s.
  Consolidated assistance.  .-.  assist-
ance agreement awarded under more
than one EPA program authority or
funded  together with  one  or more
other Federal agencies. Applicants for
consolidated  assistance  submit  only
one application.
  Continuation  award. An assistance
agreement after the initial  award, for
a project which has more than  one
budget period in its approved project
period,  or annual  awards, after  the
first award,  to State,  Interstate, or
local agencies for  continuing  environ-
mental programs (see § 30.306).
  Contractor. Any party to whom a re-
cipient awards a subagreement.
                                   327

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§30.200
        40 CFR Ch. I (7-1-91 Edition)
  Cooperative agreement  An  assist-
ance agreement in which  substantial
EPA involvement is anticipated during
the performance of the project (does
ribt include fellowships).
  Cost  sharing. The portion of allow-
able project costs that a recipient con-
tributes toward completing its project
(i.e.,  non-Federal  share,   matching
share).
  Environmentally  related measure-
ments.  Any  data collection activity or
investigation involving the  assessment
of cheriical, physical,  or biological fac-
tors in the  environment which affect
human health or the quality of life.
The following are  examples of envi-
ronmentally related measurements: (a)
A determination  of pollutant  concen-
trations from sources or in the ambi-
ent environment, including studies of
pollutant transport and fate; (b) a de-
termination of the effects of  pollut-
ants on human health and on the en-
vironment; (c) a determination of the
risk/benefit of pollutants in the envir-
oment; (d)  a determination  of  the
quality of environmental data used in
economic studies; and (e) a determina-
tion of the environmental impact of
cultural and natural processes.
  Expendable  personal  property.  All
tangible personal property  other than
nonexpendable personal property.
  Force account work. The use of the
recipient's  own  employees or  equip-
ment for construction, construe ion-re-
lated  activities  (including A   Lid E
services), or for repair or improvement
to a facility.
  Foreign  awards. An EFA award of
assistance when  all  or  part  of  the
project is performed in a foreign coun-
try by (a) a U.S. recipient, (b) a for-
eign recipient, or (c)  an international
organization.
  Formal amendment A written modi-
fication of  an  assistance  agreement
signed by both the authorized repre-
sentative  of the recipient and  the
award official.
  Grant   agreement   An  assistance
agreement that does not substantially
involve EPA in the project and where
the recipient has the authority and ca-
pability to  complete  all elements of
the program (does not include fellow-
ships).
  In-kind contribution. The value of a
non-cash contribution to meet a recipi-
ent's cost sharing requirements. An in-
kind  contribution   may   consist  of
charges for real  property  and equip-
ment or the value of goods and serv-
ices   directly   benefiting  the  EPA
funded project.
  Nonexpendable  personal property.
Personal property with a useful life of
at least two years and an  acquisition
cost of $500 or more.
  Personal  property.  Property other
than real property.  It may  be tangible
(having physical  existence), such  as
equipment  and supplies, or intangible
(having no  physical existence), such as
patents, inventions, and copyrights.
  Program  income.  Gross income the
recipient  earns  during  its  project
period from charges for the  project.
This may include income from service
fees, sale of commodities,  trade-in  al-
lowances, or usage or rental fees.  Fees
from  royalties are  program  income
only  if  the assistance  agreement  so
states. Revenue generated under the
governing powers of  a State or local
government which could  have been
generated  without  an  award  is not
considered  program income. Such rev-
enues include fines  or penalties levied
under judicial or penal power and used
as a  means to enforce laws. (Revenue
from  wastewater  treatment construc-
tion  grant  projects under  Title II  of
the Clean  Water Act, as amended, is
not program income. It must be used
for operation  and maintenance costs
of the  recipient's  wastewater facili-
ties.)
  Project. The activities or tasks EPA
identifies in the assistance  agreement.
  Project costs. All costs the recipient
incurs in   carrying  out  the  project.
EPA  considers all  allowable  project
costs to include the Federal share.
  Project officer. The EPA official des-
ignated  in the assistance agreement as
EPA's program contact with the recip-
ient.  Project officers are  responsible
for monitoring the project.
  Project period.  The length of time
EPA specifies  in the assistance agree-
ment for  completion of  all  project
work. It may be composed of more
than one budget period.
  Quality  assurance  narrative state-
ment. A description of how precision,
                                   328

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Environmental Protection Agency
                            §30.301
accuracy,  representativeness,  com-
pleteness, and compatibility will be as-
sessed, and which  is sufficiently de-
tailed to allow an unambiguous deter-
mination of  the  quality  assurance
practices to be followed throughout a
research project.
  Quality assurance program plan. A
formal document which describes  an
orderly assembly of management poli-
cies, objectives,  principles,  organiza-
tional responsibilities, and procedures
by  which  an  agency or laboratory
specifies how It intends to:
  (a)  Produce data  of  documented
quality, and
  (b) Provide for the  preparation  of
quality  assurance  project plans and
standard operating  procedures.
  Quality assurance project  plan. An
organization's   written    procedures
which delineate how it produces qual-
ity data for a specific project or meas-
urement method.
  Real property. Land, including land
improvements, and  structures and ap-
purtenances, excluding movable ma-
chinery and equipment.
  Recipient.  Any  entity   which has
been awarded and accepted an EPA  as-
sistance agreement.
  Standard  operating  procedure.  A
document which describes in detail  an
operation, analysis, or  action which is
commonly  accepted as the  preferred
method for performing certain routine
or repetitive tasks.
  Subagreement. A  written agreement
between  an EPA recipient and another
party  (other  than  another public
agency) and any lower tier agreement
for services,  supplies, or construction
necessary to complete the project. Su-
bagreements  include  contracts  and
subcontracts for personal and profes-
sional  services, agreements with con-
sultants, and purchase orders.
  Violating facility. Any  facility that
is owned, leased, or supervised by  an
applicant, recipient, contractor, or sub-
contractor that  EPA  lists  under  40
CFR part 15 as not in compliance with
Federal.  State, or  local  requirements
under  the Clean  Air Act  or Clean
Water Act.  A  facility includes any
building, plant, installation, structure,
mine, vessel, or other floating craft.
  Unsolicited proposal.  An  informal
written offer to perform  EPA funded
work for which EPA did not publish a
solicitation.
[48 PR 45062. Sept. 30. 1983. aa amended at
49 PR 38944. Oct. 2. 19841

 Subpart C—How do I Apply for and
         Receive Assistance?

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

8 30.301  To whom does EPA  award assist-
   ance?
  (a)  EPA awards  assistance only to
applicants which are eligible under ap-
plicable  statutes and regulations  and
which have the ability to meet the fol-
lowing criteria:
  (1)  Financial  resources,  technical
qualifications,  experience,  organiza-
tion,  and facilities adequate to carry
out  the project,  or a demonstrated
ability to obtain these;
  (2)  Resources  to  meet  the  project
completion  schedule contained in the
assistance agreement;
  (3)   A  satisfactory  performance
record for completion of projects  and
subagreements;
  (4)  Accounting and auditing  proce-
dures  adequate  to  control  property,
funds, and  assets, as required in sub-
part E of this part;
  (5)   Procurement  standards  that
comply with part 33 of this subchap-
ter;
  (6)  Property  management  systems
for acquiring, maintaining, safeguard-
ing,  and disposing  of property, as re-
quired In subpart E of this  part; and
  (7) Demonstrated compliance or will-
ingness to comply with the civil rights,
equal employment opportunity, labor
                                   329

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§30.902

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

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

the plan covers the project in your ap-
plication.

[48  FR 45062, Sept. 30,  1983; 49 FR 38944.
Oct. 2. 1984. as  amended at 53 FR 8076.
Mar. 11, 1988]

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

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

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Environmental Protection Agency

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

§ 30.306  How long will I have to complete
    my project?
  (a)  Your  assistance  agreement will
state  the length  of  your approved
budget period(s)  and  project period.
Subject to statutory provisions, your
approved  project period  may include
more  than one budget period. In this
case, you must submit a continuation
application to EPA to request funding
for each budget period after the initial
one. EPA makes continuation awards
subject to availability of  funds and
Agency priorities.  (Assistance awards
under 40 CFR part 35, subpart  A, do
not have project  periods,  but  recipi-
ents of such awards may receive con-
tinuation awards.)
  (b)  The  continuation   application
must include:
  (DA detailed progress report for the
current budget period;
  (2)  A  preliminary financial   state-
ment  for the current budget  period
that includes estimates of the amount
you expect to spend by the end of the
current budget period and the amount
of any uncommitted funds  which you
propose to carry over beyond the term
of the current budget period;
  (3)  A budget  for the new budget
period;
  (4) A detailed work  plan revised to
account  for  your  actual accomplish-
ments during the current  budget
period;
                           §30.307

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

[48 PR 45062, Sept. 30.  1983. as amended at
49 FR 38944, Oct. 2, 1984]

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

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§30.308

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

§30.308  When  may  I  begin   incurring
   costs?
  (a)   Except   as    permitted   in
§ 30.306(d), paragraph (b) of this sec-
tion, or  other EPA regulations, the
award official and you must sign the
EPA assistance agreement before you
incur costs.
  (b) You may incur costs between the
date the award official signs the assist-
ance  agreement  and  you sign  the
agreement,  provided  the  costs  are
identified in  the  agreement and you
do not change the agreement.
[49 PR 38944. Oct. 2. 1984]

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

 Subpart D—How does EPA Pay Me?

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

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Environmental Piwlecfloo Agency

have Incurred and are currently  and
legally obligated to pay.

§30.405  Can  I assign  my  payment to
    anyone else?
  Except  as  provided  for  in 40 CFR
35.2025(bX2)  of  EPA's  wastewater
treatment construction grants  regula-
tion, you cannot assign  your right to
receive  payments under your assist-
ance agreement.  EPA will make pay-
ments only to the payee identified in
the assistance agreement.

§30.410  How  does EPA determine allow-
    able costs?
  To be allowable, costs must meet ap-
plicable statutory provisions and Fed-
eral cost principles. EPA uses the fol-
lowing cost principles in determining
allowable costs for all EPA assistance
agreements and subagreements under
them, except as otherwise provided by
statute or this subchapter. Regardless
of whether the organization is  the re-
cipient of the award or  is performing
services for the recipient, the  nature
of the organization is the sole criterion
for determining applicable cost princi-
ples.
  (a) State   and  local  governments
must use OMB Circular A-87 to deter-
mine allowable costs;
  (b) Educational  institutions must
use: (1) OMB Circular A-21 cost prin-
ciples for research and  development,
training, and other educational serv-
ices under grants, cooperative agree-
ments,  and  subagreements, and  (2)
OMB Circular A-88  which provides
principles for coordinating the estab-
lishment of indirect cost rates and the
auditing of grants, cooperative agree-
ments, and subagreements;
  (c)  Other   non-profit  institutions
must use OMB Circular A-122, as re-
vised;
  (d)  Profit-making   organizations
must use Federal Acquisition Regula-
tion 48 CFR subparts 31.1 and 31.2;
  (e) Hospitals must use 45 CFR part
74, Appendix E.

[48 FR 45062. Sept. 30, 1983. as amended at
49 FR 38944. Oct. 2. 1984]

§30.412  How are costs categorized?
  (a) Costs are  categorized as being
either a direct cost if they support a
specific project only or as an indirect
                            §30501

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

  Subparf E—Hew do I Manage My
              Award?

§ 30.500  What records must I maintain?
  (a)   You   must  maintain  official
records for each assistance award you
receive and  identify them with EPA
assistance    identification   numbers.
These  records  must contain  the fol-
lowing information:
  (1) Amount received  and expended
for the project, including  all Federal
and cost sharing funds;
  (2) Program income;
  (3) Total  cost of the project (both
direct and indirect costs);
  (4) Property purchased  under  the
award  or used as part of your in-kind
contribution;
  (5) Time records and other support-
ing data. Institutions of higher educa-
tion may account  for the distribution
of salaries and wages of professorial or
professional   staff    by   budgeted.
planned, or assigned work activity if
the system  for  wages and  salaries
meets the requirements in OMB Circu-
lar A-21;
  (6)  Documentation  of compliance
with applicable statutes and regula-
tions.
  (b) Your contractor must maintain
books,  documents,  papers, and records
pertinent to the project.
[48 FR 45062, Sept. 30,  1983, as amended at
49 FR 38945. Oct. 2, 1984]

§30.501  How long  must I  keep  these
    records?
  (a) Generally you and your contrac-
tor must keep all records  for  three
years from  the end of the  project.
Except  for real property and nonex-
                                   333

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§30.502

pendable  personal property  records.
the beginning date of the three year
period depends on the type of project
you are conducting, as follows:
  fl) For research, demonstration, and
training  programs,  the  submission
date of a final Financial Status Report
(SF-269);
  (2) For construction awards, the ap-
proval date of EPA's final payment for
the project.
  (b) You must keep  your records on
real property and nonexpendable per-
sonal  property for three years from
the date of final disposition.
  (c) If EPA terminates your award,
you must keep all records for three
years   from  the  termination  date,
except as provided in  paragraph (b) of
this section.
  (d) If litigation,  a  claim, a dispute
under subpart L,  or an audit is begun
before  the  end  of  the three  year
period, you must  keep all records until
the three years have passed  or until
the litigation, dispute, claim, or audit
is completed and resolved,  whichever
is longer.
[48 FR 45062, Sept. 30.  1983: 49 FR 38945.
Oct. 2. 1984.  as  amended at 53 FR 8076.
Mar. 11.1988]

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

§30.503 What type  of quality assurance
   practices am I required to have?
  (a) If your project  involves environ-
mentally  related  measurements  or
data generation, you must develop and
implement quality assurance practices
consisting of policies, procedures, spec-
ifications, standards, and documenta-
         40 CFR Ch. I (7-1.91 Edition)

tion which will produce data of quality
adequate  to meet  project  objectives
and will minimize loss of data  due to
out-of-control conditions  or malfunc-
tions.
  (b) Your quality assurance practices
must assure the reliability of monitor-
ing and measurement data and inte-
grate  quality planning,  quality assess-
ment,  and  quality  improvement  ef-
forts.
  (c) As required in § 30.302(d),  you
must develop and implement a  quality
assurance program which is  acceptable
to the  award official in  order to  re-
ceive an EPA assistance award. All ap-
plications for financial assistance must
include a  document as  specified in
paragraphs (d),  (e), or (f) of this sec-
tion.
  (d)  If your  application  is  for  re-
search financial assistance it must in-
clude  a quality assurance  narrative
statement which either addresses the
following areas or provides justifica-
tion why any of these  areas  do not
apply to the proposal:
  (1) The intended use of the data and
the associated acceptance criteria  for
data quality (precision, accuracy,  rep-
resentativeness,  completeness,  compa-
rability);
  (2)  Project  requirements  for preci-
sion,    accuracy,   representativeness,
completeness, comparability, and how
these will be determined;
  (3) Procedures for selection of sam-
ples or sampling sites and collection or
preparation of samples;
  (4) Procedures for sample handling,
identification, preservation, transpor-
tation, and storage;
  (5)   Description   of   measurement
methods  or test procedures  with a
statement of performance characteris-
tics if methods are non-standard;
  (6) Standard quality assurance/qual-
ity control procedures (e.g., American
Society for Testing Materials,  Ameri-
can Public  Health Association stand-
ard procedures)  to be followed. Non-
standard  procedures must  be docu-
mented; and
  (7)  Data reduction  and  reporting
procedures,  including  description of
statistical analyses to be used.
  (e) All other applicants for financial
assistance must submit with their ap-
plication (see § 30. 302(d)) a quality as-
                                    334

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Environmental Protection Agoncy
                            §30.310
surance project plan acceptable to the
award official. (For assistance in pre-
paring  a  quality assurance  project
plan  see  "Interim   Guidelines  and
Specifications for Preparing  Quality
Assurance  Projects   Plans"  QAMS-
005/80. This document (EPA-800/4-
83-004; NTIS PB 83-170514)  may  be
obtained from the National Technical
Information Service, 5885 Port Royal
Road,  Springfield,  Virginia  22161.)
The project plan must address the fol-
lowing items:
  (1) Title of project and name of prin-
cipal investigators):
  (2) Table of contents of project plan;
  (3) Project description;
  (4) Project  organization and respon-
sibilities:
  (5) Quality assurance  objectives and
criteria for determining precision, ac-
curacy, completeness, representative-
ness. and compatability of data;
  (8) Sampling procedures;
  (7) Sample custody.
  (8) Calibration  procedures and  fre-
quency and traceability of standards;
  (9) Analytical procedures;
  (10) Data reduction, validation, and
reporting;
  (11) Internal quality control checks;
  (12) Performance and system audits;
  (13) Preventive maintenance;
  (14) Specific standard operating pro-
cedures used to assess data precision,
accuracy, representativeness, and com-
parability:
  (15)  Corrective action  for  out-of-
control situations; and
  (18) Quality assurance reporting pro-
cedures.
[48 FR 45062.  Sept. 30. 1983: 49 PR 38945.
Oct. 2. 1984. as amended  at 53 FR 8076.
Mar. 11. 19881

§ 30.505 What reports must I submit?
  (a)  Interim and final  progress  re-
ports.  You must submit  interim  and
final progress reports If the assistance
agreement or EPA regulations require
them. See 40 CFR parts 35, 40. and 45
for specific requirements. EPA or its
authorized  representatives  may   in-
spect your project at any reasonable
time to review its progress.
  (b) Financial reports. (1) You must
submit a Financial Status Report (SF
269) within 90 days after each budget
period and within 90 days after the
end of your project completion or ter-
mination.  If  either  the  Financial
Status Report (FSR) you submit after
the budget period or the  FSF  vou
submit after your project is completed
or terminated includes  unliquidated
obligations, you must submit a final
FSR immediately  after those obliga-
tions  are  liquidated. If you do  not
submit a final FSR within a reasona-
ble time after the  90 day period,  the
award official may disallow  the unliq-
uidated obligations.
  (2) Recipients of fellowship assist-
ance  agreements   do not   have  to
submit FSR's.
  (c)  Invention  reports.  You  must
report all Inventions to the award offi-
cial (see subpart K for details).
  (d) Report on federally-owned prop-
erty. You  must submit an annual in-
ventory of all Federally-owned proper-
ty used on your project. At the end of
the project period, or when you no
longer need the property,  you must
submit a final inventory which states
the present condition of each item and
requests disposition instructions.

[48 FR 45062, Sept. 30. 1983. as amended at
49 FR 38945. Oct. 2.  1984. as amended at 53
FR 8076, Mar. 11. 1988]

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

-------
§30.515

  (f)  Procedures for determining al-
lowable,  allocable,  and  reasonable
costs;
 ^g) Audits at least every other  year
on an organization-wide basis or as re-
quired by OMB Circular A-128, if ap-
plicable (see § 30.540); and
  (h)  A systematic method to resolve
audit findings and recommendations.
[48 FR 45062, Sept. 30, 1983. as amended at
51 PR 6353. Feb. 21. 1986]

§30.515  What  restrictions on  signs, sur-
   veys,  and  questionnaires must I ob-
   serve?
  (a) Signs. You must  place a visible
project  identification  sign  at  a  con-
struction site.  The  sign  must  give
project  information and credit EPA
for funding. Your  project officer will
give you specifications for sign design,
content,  and  placement. The cost  of
making and erecting the sign is an al-
lowable cost.
  (b)  Surveys and questionnaires.  If
your  survey  or  questionnaire states
that information is being collected for
the Federal Government, you must re-
quest written approval from EPA  to
use Agency funds to cover the costs of
data collection.  To assure compliance
with the Paperwork Reduction Act of
1980. Pub.  L. 96-511 (44 U.S.C. 3501 et
seq.),  the project officer can grant ap-
proval only with the agreement of the
EPA  Headquarters reports  manage-
ment  officer.  You must also receive
the project officer's approval  to list
EPA as a recipient of the survey infor-
mation.

§ 30.518  What  are the procedures for pub-
   lishing  scientific, informational, and
   educational documents?
  (a)  EPA encourages  publication  of
the results of  its assistance  agree-
ments.
  (b)  You must comply with EPA's
peer and administrative review process
if you intend to release to the public
informational materials, reports, and
other  products  produced  under an
EPA assistance agreement.
  (1)  Except  for  articles  published
under paragraph  (d)  of this section.
you must  submit three copies of the
documents to your project officer for
EPA  review.  EPA will evaluate  the
         40 CFR Ch. I (7-1-91 Edition)

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

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

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

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

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

Although the research described in this ar-
ticle has been funded wholly or in part by
the United States Environmental Protection
Agency   under   assistance   agreement
(number) to (recipient), it has not been sub-
jected to the Agency's peer and administra-
tive review and therefore may not necessari-
ly reflect the views of the Agency and no of-
ficial endorsement should be inferred.
                                    336

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Environmental Protection Agoncy
                            §30.590
  (e) Documents that are not to be re-
leased to the public as  EPA publica-
tions but are part of a recipient's regu-
lar pollution control activities are not
subject to the EPA  peer and adminis-
trative review process, e.g., State pollu-
tion control agency-published newslet-
ters and operation  and maintenance
manuals under the wasterwater treat-
ment  construction  grants  program.
However, EPA encourages you  to es-
tablish a similar reveiw process before
publishing any documents at your  own
expense. You may publish such docu-
ments  only if you include  the follow-
ing statement:

This project has been  funded  wholly or in
part by  the United States Environmental
Protection Agency under assistance agree-
ment (number) to (recipient). The contents
of this document do not necessarily reflect
the views and policies of the Environmental
Protection Agency, nor does mention  of
trade names or commercial products consti-
tute endorsement or recommendation for
use.
[48 FR 45062.  Sept. 30. 1983; 49 PR 38945.
Oct. 2.1984]

§ 30.520  When may I use my own employ-
    ees ("force account**)?
  If costs will exceed $25,000, you must
get prior written  authorization from
your project officer to use your  own
employees or equipment for construc-
tion, construction-related activities, or
for repairs or improvements to a facili-
ty ("force account"). Tou must demon-
strate  that  (a)  your employees  can
competently  and  more  economically
complete the work than contractors or
(b) an emergency circumstance makes
the use of "force account" necessary.

§30.525  How  should  I  treat  program
    income?
  (a) You may use program income to
fund additional eligible project activi-
ties, or if approved by the  award offi-
cial, to meet your non-Federal share of
project costs.
  (b) If you  do not use the program
income  to fund additional  eligible ac-
tivities or you are not permitted to use
program income  to  meet  your non-
Federal  share of  project costs, EPA
will subtract the  income  from  the
total allowable project cost  to deter-
mine the net cost on which the Feder-
al share will be based.
  (c) Unless the assistance agreement
provides otherwise,  you do not owe
EPA any of the royalties you earn on
copyrights or patents produced under
the assistance agreement. (See subpart
K of this part for EPA's rights regard-
Ing copyrights and patents.)
  (d) You must keep complete records
showing all receipts and expenditures
related to program income.

§ 30.526 How do I treat interest earned on
    EPA funds?
  If you earn interest on an EPA ad-
vance, you must return  it  to EPA
unless you are:
  (a) A State, or State agency as de-
fined under section 203 of the Inter-
governmental  Cooperation  Act  of
1968. (42 U.S.C. 4213). or
  (b) A tribal organization  as  defined
under  sections 102. 103, or  104 of the
Indian Self Determination  Act (25
U.S.C. 450f, 450g, and 450h).

§ 30.530 May I purchase personal property
    using EPA assistance funds?
  (a) Nonprofit  institutions of higher
education conducting basic or applied
research and  nonprofit organizations
whose  primary purpose is the conduct
of scientific research. You may pur-
chase  personal property for the con-
duct of basic or applied research if au-
thorized to do so in your assistance
agreement. Before you purchase prop-
erty or equipment with a unit acquisi-
tion cost of $10.000 or more, you must
receive the award official's approval.
Title will be vested in you but may be
limited as provided in paragraph (aXI)
of this section.
  (1) If EPA determines that  it is in
the best interest of the Agency, EPA
may reserve the right to transfer the
title for personal property having a
unit acquisition cost of $1,000 or more
to the  Federal Government or a third
party,  within 120 days after  project
completion. EPA must identify such
property in the  assistance  agreement,
or otherwise notify you in writing that
EPA reserves the right to transfer the
title.
                                   337

-------
§30.531
        40 CFR Ch. I (7-1-91 Edition)
  (2) If EPA does not reserve the right
to transfer the title, you have no other
obligations or accountability to EPA.
  (b)  Other recipients. You may  pur-
cnase personal property with EPA as-
sistance funds if authorized to do so in
your assistance agreement. Before you
purchase  personal property  with  a
unit cost of $10,000 or more, you must
receive the award official's approval.
Title  will be  vested in you, subject to
the following conditions:
  (1) You must use the property in the
EPA assisted project for which it was
acquired as long as needed, whether or
not the project  continues to  be  sup-
ported with EPA funds;
  (2) You must  assure that EPA's in-
terest (the percentage of EPA's  par-
ticipation in  the total award) is  ade-
quately reflected and protected  in
compliance with all recordation or r^z-
istration requirements  of the UP'   -ji
Commercial Code or other app:.   ule
local  laws  on all nonexpendable per-
sonal property with a unit acquisition
cost of $10,000 or more;
  (3)  You  must  follow the property
management standards in § 30.531;
  (4) You must  follow the disposition
requirements in  § 30.532; and
  (5) EPA reserves the right to trans-
fer the title for nonexpendable person-
al property having a unit acquisition
cost of $1,000 or more to the Federal
Government  or  a third party, within
120  days  after  project  completion.
EPA  must identify such  property in
the assistance agreement.

[48 FR 45062.  Sept. 30. 1983; 49 FR 38945,
Oct. 2. 1984]

§30.531  What   property   management
    standards must I follow for nonexpen-
    dable personal property purchased with
    an EPA award?
  Nonprofit institutions of higher edu-
cation conducting basic or applied re-
search  and  nonprofit organizations
whose primary purpose is to conduct
scientific  research are exempt from
the following standards. All other re-
cipients must comply with the follow-
ing property management standards.
Recipients may use their own property
management system  if  the system
meets the following minimum stand-
ards.
  (a)  Maintain accurate  records  re-
flecting:
  (DA description of the property;
  (2)  Manufacturer's serial  number.
model number, or other identification
number;
  (3) Source of the property, including
assistance identification number;
  (4) Whether title is vested in the re-
cipient or the Federal Government;
  (5) Unit acquisition date and cost;
  (6)  The percentage of  the  Federal
share of the cost;
  (7)  Location, use,  and condition  of
property and the  date the information
was recorded; and
  (8) Ultimate disposition data, includ-
ing sales price or the method used to
determine the price, or  the  method
used to determine current fair market
value where a recipient compensates
EPA  lor its share  under § 30.532  of
this part.
  (b)  Conduct a physical inventory of
property,  and reconcile  the results
with  the property  records,  at least
once every two years. Your inventory
must verify the current use and con-
tinued need for the property.
  (c) Maintain a control system to pre-
vent loss, damage, or theft. (You must
thoroughly  investigate  and document
any  loss, damage, or theft of nonex-
pendable personal property.)
  (d)  Maintain adequate maintenance
procedures that ensure the property is
in  good  condition  and that instru-
ments used for  precision measure-
ments are periodically calibrated.
  (e) Maintain proper sales procedures
which provide for competition result-
ing in the highest possible return.
  (f) Maintain identification of Feder-
ally-owned property.

[48 FR 45062, Sept. 30. 1983; 49 FR 38945.
Oct. 2. 1984]

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

-------
Environmental Protection Agency
                           §30.537
original  project,  you may use  it on
other EPA projects. If you do not have
other EPA projects, you may use it on
other Federal projects. If you wish to
use the property on other than Feder-
ally  sponsored  activities,  you  must
comply  with  the following  require-
ments;
  (a) Generally, if you purchased non-
expendable personal property for  less
than $1.000 per unit, you may either
keep it or sell it and keep  the pro-
ceeds.  However, if you are  a profit-
making organization, you may keep
nonexpendable personal property only
if you  reimburse EPA for its propor-
tionate  share  of  the  current  fair
market value of the property.
  (b) EPA is entitled to compensation
on nonexpendable personal  property
you purchased for more than $1,000.
You may keep it, provided you com-
pensate  EPA for its  proportionate
share of the current fair market value.
If you do not want to keep the proper-
ty, your project officer will  give  you
instructions for disposition.
  (c) [f, at the end of your project,  you
have  expendable  personal  property
with a total  aggregate fair market
value exceeding $1,000, you  may  use
the property on other Federally spon-
sored projects. If  you do not use  the
property on other Federally sponsored
projects you must keep it or sell it,  but
in either case you must compensate
EPA for its proportionate share of  the
current fair market value.
[48 FR 45062, Sept. 30, 1983, as amended at
49 FR 38945. Oct. 2. 1984]

§30.535  May  I purchase  real  property
   with EPA awarded funds?
  You  may purchase  real  property
subject to the following conditions:
  (a) The award official must approve
the purchase.
  (b) Except as provided in paragraph
(f) of this section, you must use  the
real property only for the purpose for
which  it was purchased under the as-
sistance award.
  (c) You  comply with the  require-
ments in 40 CFR part 4.
  (d) You  must also comply  with 40
CFR part 35, subpart I, if your award
is a wastewater treatment construction
grant.
  (e) You must assure that EPA's in-
terest is adequately reflected and pro-
tected in compliance with all recorda-
tion or registration requirements of
applicable local laws on real property.
  (f) When it is no longer needed for
the original project:
  (1) You must get approval from EPA
to use the property for other Federal-
ly supported projects or progams; or
  (2) You must contact EPA for in-
structions on how  to dispose of the
property. EPA may:
  (i) Permit you to retain title to the
property  provided  you  compensate
EPA for its share; or
  (ii) Direct you to sell  the  property
and to compensate EPA  for its share,
less your expenses; or
  (iii) Direct you to  transfer the title
of the property to the Federal Govern-
ment and then compensate you  based
on your percentage of participation in
the original cost of the project, which
will be applied to  the  current fair
market value of the property.

[48  FR 45062. Sept. 30. 1983; 49 FR 38945,
Oct. 2. 1984]

§30.536  How  do I  manage  federally-
    owned property?
  You must negotiate the use of  feder-
ally-owned property  with the award
official  and comply with your lease
agreement and §30.505(d). You must
inform the project officer of the avail-
ability of the property when the prop-
erty is no longer needed for the assist-
ance project or  when you have com-
pleted the project. EPA  will  give you
instructions on  where to return  the
property.

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

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§30.538
         40 CFR Ch. I (7-1-91 Edition)
§30.538  May I use General Services Ad-
    ministration (GSA) supplies and serv-
    ices?
* You may not use  GSA sources of
supplies  and services, or excess  Gov-
ernment property. Excess Government
property consists  of property under
the control of any Federal agency that
is not required for its needs.

§ 30.540  Who will audit my project?
  (a) General EPA may perform pre-
award or interim  audits, as well as a
final  audit  of  your  project.  If  EPA
audits your project, EPA will rely to
the extent practicable on your audits
conducted under § 30.510(g) (if done in
accordance   with  applicable   audit
standards)  instead of reauditing the
same records.
  (b) Other recipients. The award offi-
cial may request a final audit after the
submission of, or the due date of, the
final  Financial  Status  Report  (see
§ 30.505(b)). Where your organization
has a cognizant  Federal audit agency,
EPA will refer these audits to your or-
ganization's cognizant Federal  audit
agency.  Where  OMB has not estab-
lished  a  cognizant  Federal  audit
agency, EPA staff may perform or ar-
range for the audit to be performed.
(48 FR 45062. Sept. 30. 1983. as amended at
53 FR 8076. Mar. 11. 1988]

§30.541  What are  my audit responsibil-
    ities?
  (a)  If  you are  an institution  of
higher education  audited as  part of
single audits under the  Single Audit
Act of 1984, 31 U.S.C. 7501-7507, you
must  comply with the audit  require-
ments of OMB Circular  A-128. Other
institutions of  higher education  and
other nonprofit organizations (except
for  certain hospitals under the Medic-
aid/Medicare programs,  or subject to
contract  closing audits)  must comply
with the audit requirements of OMB
Circular  A-133  for  fiscal years  that
begin after January 1, 1990,  in accord-
ance with paragraphs (b) through (h)
of this section.
  (b) If you receive $100,000 or more in
a year in  Federal awards you  must
have an  audit made  for that year in
accordance  with  the  provisions  of
OMB Circular A-133. However, if you
receive $100.000 or more but receive
awards under only one program, you
have the option of having an audit of
your  Institution  prepared  in  accord-
ance with the provisions of OMB Cir-
cular  A-133 or having an audit made
of the one program. For pricr or sub-
sequent years, when an institution has
only loan  guarantees  or outstanding
loans  that were made previously, the
institution may be required to conduct
audits for  those programs, in accord-
ance with  regulations of the Federal
agencies providing those guarantees or
loans.
  (c) If you receive at least $25,000 but
less than $100,000 a year  in Federal
awards you must have an audit made
for that year in accordance with OMB
Circular A-133 or  have an audit made
of each Federal award, in accordance
with Federal laws and regulations gov-
erning the programs-in which you par-
ticipate.
  (d) If you receive less than $25.000 in
a  year  in Federal awards  you  are
exempt  from Federal audit require-
ments, but your records must be avail-
able for review by appropriate EPA or
subgranting entity officials.
  (e)  Audits  shall  usually  be  per-
formed annually but not less frequent-
ly than every two years.
  (f) In arranging for audit services,
you  must follow  the  procurement
standards prescribed by OMB Circular
A-110.
  (g) If you receive EPA assistance and
provide  $25,000  or more of it  during
your fiscal year to a sub-recipient, you
must  ensure  that the requirements of
OMB  Circulars  A-133  or  A-128  are
met, as appropriate.
  (h)  You  must comply  with  the re-
quirements of OMB  Circular  A-133
concerning the  use  of small  audit
firms  and audit firms owned and oper-
ated by  socially  and economically dis-
advantaged individuals.

[56 FR 7305. Feb. 22. 1991]

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

-------
 inv(ronm«ntal Eiutectlon Ag«ncy

 1969 (42 UJ3.C. 4321 et «eqr.) as amend-
 ed and  other related environmental
 laws and executive orders that require
 you  to  assess  the  environmental
 impact of your project. See 40 CFR
 part 6 for specific requirements.
  (b) Flood Disaster Protection Act If
 your project involves construction or
 property acquisition In a special flood
 hazard area,  you must comply with
 the Flood Disaster Protection Act of
 1973  (Pub. L. 93-234, December  13,
 1973).  If your project is located in a
 community participating  in  the  Na-
 tional  Flood  Insurance Program  (42
 U.S.C. 4001-4128),  the Act  requires
 you to purchase flood insurance as a
 condition of receiving EPA assistance.
 If the  community is not participating
 in the National Flood Insurance Pro-
 gram and the special flood hazard area
 has been designated by the Federal In-
 surance Administration of the Federal
 Emergency  Management  Agency  for
 at least one year, EPA will not award
 assistance for your project until  the
 community enters  the program and
 flood insurance is purchased. See 44
 CFR parts 59 through 79 for specific
 requirements.
  (c) Clean Air Act  Section 306 of  the
 Clean  Air Act,  (42 U.S.C. 7606),  as
 amended, and Executive Order  11738
prohibit  EPA from awarding  assist-
ance to you (with certain exceptions)
 if you intend to use any  facility on
 EPA's  List  of Violating  Facilities to
 complete work  on your  agreement.
 You must include a clause in all suba-
 greements that requires the recipients
 of  those subagreements  to  comply
 with the requirements of 40 CFR part
 15 (see 40 CFR 33.1020).
  (d) Federal Water Pollution Control
Act Section 508 of the Federal Water
 Pollution  Control  Act,  (33  U.S.C.
 1368),  as  amended,  and Executive
 Order 11738 prohibit EPA from award-
 ing assistance to you (with certain ex-
 ceptions) if you intend to use any fa-
 cility on EPA's List of Violating Facili-
 ties to complete work on  your agree-
 ment. You must include a clause in all
 subagreements to comply with the re-
 quirements of 40 CFR part 15 (see 40
 CFR 33.1020). Section 13  of  the 1972
 Amendments to the Act prohibits  sex
 discrimination under  any  program or
 activity receiving assistance under  the
                           §30.000

Act. See 40 CFR part 7 for specific re-
quirements.
  (e)  Civil Rights  Act  You  must
comply with section 602,  Title VI of
the Civil Rights Act of 1964. (42 U.S.C.
2000d). and related nondiscrimination
laws  and   Executive  Order   11246.
These authorities prohibit you from
excluding any person from participat-
ing in, denying them the benefits of.
or discriminating against them on the
basis  of race, color, or national origin
under any program or activity Involv-
ing Federal financial assistance. See 40
CFR parts 7 and 8 for specific  require-
ments.
  (f)  Rehabilitation Act You  must
comply with section 504 of the Reha-
bilitation Act of 1973, (29 U.S.C. 794),
as amended, which prohibits discrimi-
nation on the basis of  handicap  In
Federally assisted  programs.  See 40
CFR part 7 for specific requirements.
  (g)  Age  Discrimination Act  You
must  comply  with the provisions  of
the Age  Discrimination Act of 1975,
(42 U.S.C. 6101 et seq.), which prohibit
discrimination on the basis of age in
Federally assisted  programs.  See 40
CFR part 7 for specific requirements.
  (h)  Title IX of the Education Amend-
ments of 1972. You must comply with
Title  IX  of the  Education  Amend-
ments of 1972, (20 U.S.C.  1681 et seq.)
which prohibits  sex discrimination in
Federally assisted education programs.
See 40 CFR part 7 for specific  require-
ments.
  (1)  Uniform Relocation Assistance
and Real Property Acquisition  Policies
Act You must comply with the Uni-
form  Relocation Assistance  and Real
Property Acquisition Policies Act of
1970.  (42 U.S.C.  4601 et seq.\ if your
project involves  acquiring an  Interest
In real property and/or any displace-
ment  of  persons, businesses, or farm
operations. See 40 CFR part 4  for spe-
cific requirements.
  (j)  The  Indian Self-Determination
and Education  Assistance Act  You
must  comply with the Indian Self-De-
termlnatlon and Education Assistance
Act of 1975 (Pub. L. 93-638).  If your
project will benefit Indians, the Act
requires  you to  give Indians prefer-
ence In training and employment op-
portunities and in the  award of suba-
greements.
                                   341

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§30,601
         40 CFR Ch. I (7-1-91 Edition)
  (k) The Hatch. Act If you are a State
or  local  government  recipient, you
must   ensure  compliance with the
Hatch Act, (5 U.S.C.  1501 et seq.).  as
amended.  The Act requires State and
local government employees to comply
with the restrictions on political activi-
ties imposed by the Act if their princi-
pal employment activities are funded
wholly or in part by Federal assist-
ance.  See  5 CFR part  151 for specific
prohibitions and exemptions.
  (1) Safe Drinking Water Act Section
1424(e) of the Safe Drinking Water
Act (42 U.S.C.  300h-3(e)),  prohibits
EPA from awarding assistance to you
if EPA determines  that  your project
may contaminate a sole source aquifer
which will  result  in a  significant
hazard to public health. See CFR part
149.
[48 FR 45062. Sept. 30. 1983; 49 PR 38945.
Oct. 2. 1984]

§30.601  Are there restrictions on the use
   of assistance funds for advocacy pur-
   poses?
  (a) You may not use assistance funds
for:
  (1) Lobbying or  influencing legisla-
tion before Congress;
  (2)  Partisan  or political  advocacy
purposes; or
  (3) An activity whose objective could
affect or influence the outcome of  an
EPA regulatory or adjudlcatory pro-
ceeding.
  (b) For nonprofit recipient organiza-
tions  other  than educational institu-
tions, EPA will implement § 30.601(a)
(1) and (2) consistent with the require-
ments of OMB Circular  A-122,  as  re-
vised (see § 30.4KXO).
[49 FR 38945, Oct. 2, 1984]

§30.603  What  additional  Federal  laws
   apply to EPA assisted construction
    projects?
  If you receive EPA assistance for a
project involving  construction, you
must  ensure compliance  with the fol-
lowing additional requirements:
  (a) The Davis-Bacon Act The Davis-
Bacon Act (40  U.S.C.  276a et seq.) as
amended,  and  implementing regula-
tions  of  the  Department  of  Labor
under 29  CFR part 5 require you to
ensure that on construction subagree-
ments  in excess of $2,000, your  con-
tractors and subcontractors pay wages
to laborers and  mechanics  at least
equal to the minimum wages specified
by the Secretary  of Labor if required
in the program statute.
  (b) The Copeland Act The Copeland
(Anti-Kickback) Act,  and the regula-
tions  of the  Department  of Labor
under  29  CFR part  3 prohibit  your
contractors and  subcontractors from
inducing any person  involved in  your
project to give up any part of the  com-
pensation to which that person is enti-
tled under an employment contract.
  (c) The  Contract Work  Hours and
Safety  Standards Act  The  Contract
Work Hours and Safety Standards Act
(40 U.S.C. 327 et  seq.) and the regula-
tions  of the  Department  of Labor
under 29 CFR part 5 require your con-
tractors  and  subcontractors to  pay
wages  to laborers and mechanics  on
the basis of an eight hour work day
and 40 hour work week and to pay at
least  time-and-a-half for work  per-
formed in excess  of these time limita-
tions. Also, the Act prohibits your con-
tractors and subcontractors  from  re-
quiring laborers   and  mechanics  to
work in hazardous, unsanitary, or dan-
gerous  conditions (see 29 CFR  part
1926).
  (d) Convict labor. You may not use
convict labor  unless  the  convicts are
on work release,  parole, or probation
(see 18 U.S.C. 436).

§30.610  What are  my  responsibilities  for
   preventing  and detecting fraud  and
   other corrupt practices?
  (a) You bear the primary  responsi-
bility for  preventing, detecting, and
prosecuting corrupt  practices under
your assistance agreement.
  (b) If you become  aware of allega-
tions, evidence, or the appearance of
corrupt practices, you must:
  (1)  Immediately inform  the  EPA
project officer and the EPA  Office of
Inspector General; and
  (2) Promptly pursue available State
and local legal and administrative rem-
edies.
                                   342

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Environmental Protection Agency
                            §30.700
§30.611  Can I hire a person or agency to
    solicit EPA assistance for me?
  Yes, but  you  may  not  reimburse
with EPA assistance funds any person,
corporation,  partnership, agency,  or
other entity  which solicits or secures
SPA  assistance  lor you in exchange
for a commission, a percentage fee, a
brokerage fee, or a contingent fee.

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

§ 30.613  What is EPA's policy on conflict
    of interest?
  EPA's policy is to prevent personal
or organizational conflict of interest,
or the appearance of such conflict  of
interest in the award and administra-
tion of EPA assistance, including suba-
greements. (For  restrictions on EPA
employees, see 40 CFR part 3.)
  (a) An official or employee of a re-
cipient may not  participate in any ac-
tivity relating to EPA assistance if any
of the following persons or organiza-
tions, to the  official's  or  employee's
knowledge, has a financial interest in
the activity:
  (1) The official or employee himself;
  (2) The official or employee's spouse
or minor child;
  (3) A partner  of the official or em-
ployee;
  (4)  An organization (other than  a
public agency) in which the official or
employee serves as an officer, director,
trustee, partner, or employee; or
  (5) Any person  or organization with
whom the official or employee is nego-
tiating  or has  any arrangement con-
cerning prospective employment.
  (b) Officials and employees of recipi-
ents must  avoid  any  action which
might result in. or create the appear-
ance of:
  (1) Using official position for private
gain;
  (2) Giving preferential treatment to
any person;
  (3) Losing independence  or impar-
tiality;
  (4) Making an official decision out-
side official channels;  or
  (5) Undermining public confidence
in the integrity of EPA programs.

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

   Subpart  G—Can an Assistance
      Agreement be Changed?

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

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§30.705
        40 CFR Ch, I (7-1-91 Edition)
  (2)  Amounts budgeted for Indirect
costs  to  absorb increases  in  direct
costs; or
«. (3)  Amounts budgeted for training
allowances if transferred to other cost
categories.

§30.705  What changes can I make to my
    assistance agreement without a formal
    amendment?
  Minor changes in the  project work
that are consistent with  the objective
of the project and within the scope of
the assistance  agreement do not re-
quire   the  execution of  a  formal
amendment before the recipient's im-
plementation of the change. However.
such changes do not  obligate EPA to
provide Federal funds for any costs in-
curred by you in excess of the assist-
ance amount, unless  approved  in ad-
vance under § 30.700.

§30.710  Can I terminate a part or all of
    my assistance agreement?
  (a) You and  EPA may terminate a
part or all  of  your  assistance  agree-
ment, when  both parties agree  that
the continuation of the project will
not produce beneficial  results.  You
and the award official must agree on
the conditions of the termination, the
effective date, and in the case of par-
tial termination, the portion to be ter-
minated. EPA may unilaterally termi-
nate for cause your  assistance  agree-
ment under § 30.903 of this part.
  (b)  EPA will pay  you the Federal
share of allowable costs incurred up to
the date of termination and allowable
costs  related  to  commitments  you
made  prior to termination  that you
cannot cancel.

  Subport H—How do I Close out  my
              Profact?

§ 30.800  What records  and  reports must I
    keep after I complete my project?
  You and your contractors must keep
all  books,  records,  documents,  and
other evidence (including accounting
procedures  and  practices and suba-
greement  documents) that track  the
progress of your project In accordance
with the requirements under S 30.501.
§ 30.802  Under what conditions will I owe
   money to EPA?
  (a) If the award official determines
that you owe funds,  you must  reim-
burse  the  Federal government that
amount. EPA  will take  appropriate
legal and administrative action to col-
lect the amount you owe the Agency if
reimbursement is not made in a timely
manner. EPA  may  offset  the debt
against other funds  payable  to you
under an EPA or other Federal agency
assistance agreement  if not explicitly
prohibited by another statute.
  (b) EPA  will charge you Interest If
you fall to pay within 30 days from
the date of the Agency's decision that
a debt is owed. The interest rate will
be the rate established by the Secre-
tary of  the  Treasury in accordance
with  the  Treasury  Fiscal Require-
ments  Manual 6-8020.20. The rates are
published  quarterly  in  the  FEDERAL
REGISTER.
  (c) If you are not  a State  or local
government,  EPA  will charge you its
cost to process and handle the  overdue
debt at the end of each 30 day period
the debt is overdue, and a penalty of
6% per annum if the debt is not paid
within 120 days after the date of  the
Agency's decision that a  debt  is  owed.

[48 FR  45062, Sept. 30. 1983. as amended at
51 FR 6353, Feb. 21. 1986]

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

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

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Environmental Protection Agency

[48 PR 45062. Sept. 30. 1983. as amended at
49 FR 38945, Oct. 2. 1984]

S 30.901  What are the consequences of a
   stop-work order?
  (a) A stop-work order requires you to
Immediately stop the work or activi-
ties described In the order and to take
all reasonable steps to minimize costs
incurred on the work. The award offi-
cial will issue the order in writing. The
order will  be  in effect for forty-five
days  after  you receive  it unless can-
celled or extended  by mutual agree-
ment between you and EPA.  If  the
problem cannot be resolved during the
stop-work period and EPA is likely to
terminate or annul the agreement, the
award official will so inform you.
  (b)  If the  stop-work order is can-
celled and  it caused any increase in
the cost of and/or  the time  for com-
pleting  the project, you may request
an adjustment in the  project period,
budget  period, or  assistance amount.
You must submit a  request for adjust-
ment to the project  officer  within
sixty days  after the stop-work order
ended.

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

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

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

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

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§30.905

§ 30.905  May I request a review of a termi-
    nation or annulment?
  You may request a review of EPA's
decision to terminate or annul an as-
sistance  agreement.   Within  thirty
days after the notice of termination or
annulment is issued,  you must  file a
written  request  for review to the ap-
propriate  Assistant  or Regional  Ad-
ministrator. Your request for review
must follow the  procedures under sub-
part L of this part.
[49 FR 38945. Oct. 2, 1984]

§30.906  What are  the  consequences of
    suspension or  debarment?
  EPA may suspend or debar you in
accordance with 40 CFR part 32. You
may not receive assistance or a suba-
greement if your name or organization
appears on EPA's Master List of De-
barred and Suspended Firms and Indi-
viduals.
[48  FR 45062.  Sept. 30, 1983; 49 FR 38945.
Oct. 2. 1984]

Subport  J—Can I get An  Exception
     ("Deviation") From These  Regu-
     lations?

§30.1001  Will EPA  approve  any  excep-
    tions to these regulations?
  (a) On a case-by-case basis, EPA will
consider requests for  exceptions to
these regulations.
  (b) EPA may issue  a "deviation"
from any of its assistance related regu-
lations,  except  for those that imple-
ment statutory and executive order re-
quirements.
  (c) The award official may "waive"
certain requirements of  this subchap-
ter for  foreign  awards. All provisions
waived will be stated in the assistance
agreement.
[48 FR 45062. Sept. 30, 1983; 49 FR 38945.
Oct. 2. 19841

§ 30.1002  Who may request a deviation?
  You, your project officer, or an EPA
program office may request a devi-
ation from EPA regulations. If you are
the initiator, you must send your writ-
ten request to your project officer if
the request is for a Headquarters pro-
gram or to the Regional Administrator
for a Regionally  administered  pro-
         40 CFR Ch. I (7.1-91 Edition)

gram, who will  then forward the re-
quest to the Director. Grants Adminis-
tration Division, with a recommenda-
tion for approval or disapproval.

§30.1003  What  information  must  I  in-
    clude  in a deviation  request?
  Your request  must include the fol-
lowing information:
  (a) Your name, the  assistance identi-
fication  number, date  of award, and
the dollar value of the application or
award;
  (b)  The section  of the  regulation
from which you need  a deviation;
  (c) A complete description of  what
the deviation will do and a justifica-
tion of why the deviation is necessary;
and
  (d) A statement of whether the same
or a similar deviation has been previ-
ously requested. If such a request has
been  made previously,  explain why it
was made and the outcome.

§ 30.1004  Who approves or disapproves a
    deviation request?
  (a) The Director, Grants Administra-
tion Division  (GAD), approves or dis-
approves your  deviation request. As-
sistant Administrators in the affected
program areas must review and concur
on deviations affecting a class of appli-
cants or  recipients.
  (b)  If  EPA approves the deviation
before an award,  the revised require-
ment will be  included in your assist-
ance  agreement. Approval  of  a devi-
ation before an award does not guar-
antee an award.

§ 30.1005  May  I request a review of a devi-
    ation decision?
  You may not request a review of a
deviation  decision under the  proce-
dures in  subpart L of this part. Howev-
er, you  may  request the Director of
the Grants Administration Division to
reconsider his decision.

[48 FR 45062. Sept.  30. 1983; 49 FR 38945.
Oct. 2, 1984]
                                    346

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Environmental Protection Agoncy

  Subpart K—What Policies Apply to
   Patents, Data, and Copyrights?

§30.1100  What assistance agreements are
   subject to EPA patent rules?
  Except  for wastewater  treatment
construction  grants  awarded  under
Title  II  of the Clean Water Act.  as
amended, all EPA assistance  agree-
ments involving experimentation,  de-
velopment, special investigations, sur-
veys,  studies, or research are subject
to the EPA patent rules.

§30.1101  What Federal  patent  laws  or
   policies  govern  my assistance  agree-
   ment?
  The nature of your organization will
determine  which  laws  and  policies
govern your assistance agreement:
  (a)  Small business  firms and non-
profit organizations, including educa-
tional institutions, are entitled to the
benefits of, and must comply with  35
U.S.C. Chapter 18  (1982).  and the
patent rights clause in OMB Circular
A-124, Attachment A (49 FR 10393).
  (b)  A profltmaklng firm  that is not
defined as a  small business firm, and
whose assistance agreement is funded
under section 6914 of  the Resource
Conservation   and   Recovery  Act
(RCRA),  must comply  with section
698KO of RCRA. See Federal Acquisi-
tion Regulation 48 CFR part 27 and 48
CFR 52.227-13 (49 FR 12972).
  (c) If you are neither a  small busi-
ness firm nor a profitmaking firm with
an award under section 6914 of RCRA,
you are  subject to the  guidelines  in
the President's Memorandum on Gov-
ernment  Patent Policy issurd on Feb-
ruary 18, 1983 (Weekly Compilation of
Presidential Documents, vol. 19, no. 7,
page 252). and, therefore, must comply
with 35 U.S.C. Chapter 118 (1982) and
the  patent  rights  clause  cited  in
§ SO.llOKa).
[48 FR 45062. Sept. 30, 1983; 49 FR 38946.
Oct. 2. 1984)

§30.1102  What are my  invention rights
   and my reporting requirements if my
   award ia other than an award under
   section 6914 of RCRA?
  You must  report all inventions  to
the Award Official and decide whether
you  wish to retain domestic and/or
                          §30.1106

foreign righto to your invention. Tou
must report your invention and notify
the Award  Official of your  decision
within the  time periods specified in
the  oatent  rights  clause cited  in
§ SO.llOKa). If you do not retain the
rights to your invention. EPA may ac-
quire the title from you. If you retain
title, EPA  acquires a royalty-free, ir-
revocable license to use the Invention
throughout  the  world by.  and  on
behalf of. the Federal Government.

[49 FR 38946, Oct. 2, 1984]

§30.1103  What  are my  invention rights
   and obligations if I am a profitmaking
   firm with an award under section 6914
   of RCRA?

  If you are not a small business and
your assistance agreement does not in-
dicate  otherwise,  you  must  comply
with the patent rights clause, entitled
"Patent  Rights  Acquisition  by  the
Government"  (48   CFR   52.227-13),
which  implements  section 6981(c) of
RCRA.  Under this section, EPA nor-
mally obtains title to your invention.

[48 FR 45062, Sept. 30. 19*3; 49 FR 38946.
Oct. 2. 1984]

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

§30.1106  Do the patent rules apply to su-
   bagreements?
  (a) Yes, if the subagreements involve
experimentation, development, special
investigations, surveys, studies, or re-
search, you must include the appropri-
ate patent  rights clause in the suba-
greement. All business firms and non-
profit organizations awarded subagree-
ments are entitled to the benefits and
must comply with  35 U.S.C. Chapter
18 (1982) and  the  President's Memo-
randum on Government Patent Policy
of February 18,  1983. except that a
party  to  a  subagreement  awarded
under section 6914  of RCRA which is
a profitmaking firm not defined as a
small  business firm,  is   subject  to
§5 30.1101(b) and 30.1103.
                                   347

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§30.1108

  (b) Subagreements must be In com-
pliance with the "Patent and data and
copyright clause" in 40 CFR part 33,
and generally must contain the same
patent  rights clause as contained  in
your assistance agreement.
(48 FR 45062, Sept. 30, 1983; 49 FR 38946.
Oct. 2.1984]

§ 30.1108  Does EPA require any type of li-
    censing of  background patents  that I
    own?
  Generally, EPA does  not require
such licensing. However,   in  awards
subject to 35 U.S.C. Chapter 18 (1982)
the Administrator may approve such a
requirement  under  exceptional cir-
cumstances.
[48 FR 45062. Sept. 30. 1983; 49 FR 38946.
Oct. 2. 1984]

§30.1112  Are  there  any  other   patent
    clauses or conditions that apply to my
    award?
  Your award  is subject to both the
Notice and Assistance Clause and the
Authorization and Consent Clause  in
Appendix B to this part.

§30.1130  What  rights  in data and copy-
    rights does EPA acquire?
  All assistance agreements and suba-
greements are subject to Appendix  C.
As set forth in Appendix C, the  Feder-
al Government  has an  unrestricted
right to use any data  or information
generated  using  assistance funds  or
specified to be delivered to EPA in the
assistance  agreement. The  Federal
Government has a royalty-free, irrevo-
cable license  to  use any copyrighted
data in any manner for Federal Gov-
ernment purposes.

Subport L—How  are Disputes Be-
     tween EPA Officials and me Re-
     solved?

§ 30.1200  What happens if an EPA official
    and I disagree  about an assistance
    agreement requirement?
  (a) Disagreements  should  be  re-
solved at the lowest level possible.
  (b) If you can not reach an agree-
ment,  the EPA disputes decision offi-
cial will provide  you with a  written
final decision. The EPA disputes deci-
sion official is the individual designat-
         40 CFR Ch. I (7-1-91 Edition)

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

[48 FR 45062. Sept. 30. 1983; 49 FR 38946.
Oct. 2. 1984]

§30.1205  If  I  file a  request for review,
   with whom must I file?
  (a) For final decisions issued by an
EPA disputes decision official at Head-
quarters, you must file your  request
with the Assistant  Administrator re-
sponsible for the assistance program.
  (b) For final decisions issued  by a
Regional disputes decision official, you
must file your request for review  with
the Regional Administrator. If the Re-
gional Administrator issued the final
decision, you must request the Region-
al Administrator to reconsider that de-
cision.

§30.1210  What must  I include in my re-
   quest for review or reconsideration?
  Your request must include:
  (a) A copy of the EPA disputes deci-
sion official's final decision;
  (b) A  statement of the amount in
dispute;
  (c) A  description of  the issues in-
volved; and
  (d) A concise statement of your ob-
jections to the final decision.

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

-------
Environmental Protection Agoncy
                       Pt. 30, App. A
§30.1220  If the  Assistant  Administrator
    confirms  the  final decision  of  the
    Headquarters disputes decision official,
    may  I  seek  further  administrative
    review?
  A decision by the Assistant Adminis-
trator to confirm the final decision of
a Headquarters  disputes decision offi-
cial  will constitute  the final Agency
action.

§30.1225  If the  Regional  Administrator
    confirms the final decision of the Re-
    gional disputes decision official, may I
    seek further administrative review at
    EPA Headquarters?
  (a) A determination by the Regional
Administrator to confirm the Regional
disputes decision official's decision will
constitute  the  final  Agency  action.
However, you may file a petition  for
discretionary review  by the Assistant
Administrator responsible for the as-
sistance program  within  30 calendar
days of the Regional Administrator's
decision. Your petition must be sent to
the Assistant Administrator by  regis-
tered mail, return receipt  requested.
and must include:
  (DA copy of the Regional Adminis-
trator's decision; and
  (2) A concise statement of  the rea-
sons why you believe the decision is er-
roneous.
  (b)  If  the Assistant Administrator
decides not to review the Regional Ad-
ministrator's  decision, the  Assistant
Administrator will advise you in writ-
ing that the Regional AdmlrJstrator's
decision remains the fina>  Ageicy
action.
  (c)  If  the Assistant Administrator
decides to review the Regi jnal Admin-
istrator's decision, the review will gen-
erally be limited to the written  record
on which the Regional Administrator's
decision was based. The Assistant Ad-
ministrator may allow you to submit
briefs in support of  your petition for
review and may provide you an  oppor-
tunity for  an informal conference in
order to clarify factual or legal issues,
After reviewing the Regional Adminis-
trator's decision, the Assistant Admin-
istrator will issue  a written decision
which will  then become  the final
Agency action.
§30.1230  Will I be charged interest If I
   owe money to EPA?
  (a)  Interest  will  accrue  on  any
amounts of money due and payable to
EPA from the date of the disputes de-
cision official's final decision, even if
you  request review of  the  decision
under this subpart. Only  full payment
of the debt within  30 days of the dis-
putes decision  officials' final decision
will prevent EPA from charging Inter-
est.  If  you  pay  a  debt  but  request
review  under  this  subpart and the
amount  of the debt is reduced as a
result of the review, EPA will refund
the interest and penalty  charges that
you paid on the adjustment. However,
processing   and    handling  charges
which  you may have paid are refund-
able only if EPA determines that the
entire amount of the debt is not owed.
  (b) State and local government re-
cipients are not subject to the penalty
and  handling charges in  this section,
but are subject to the interest charges.

[48 PR 45062. Sept. 30. 1983.  as amended at
51 FR 6353. Feb. 21.1986]

§30.1235  Are there   any EPA  decisions
   which may not be reviewed under this
   subpart?
  You may not request a review of;
  (a) Disapprovals of deviations under
subpart J;
  (b) Bid protest decisions  under part
33;
  (c) National  Environmental  Policy
Act decisions under part 6;
  (d) Advanced wastewater treatment
decisions of the Administrator, and
  (e) Policy decisions of the EPA Audit
Resolution Board.
[48 FR 45062. Sept. 30. 1983.  as amended at
49 FR 38946. Oct. 2. 1984]

        APPENDICES TO PART 30

     APPENDIX A TO PART 30—EPA
             PROGRAMS
  The following chart Identifies EPA's as-
sistance programs and the types of awards
(grants or  cooperative  agreements) that
EPA will award under these programs.
                                    349

-------
Pt. 30, App. B
         40 CFR Ch. I (7-1-91 Edition)
Catalog
of
Federal
domes-
tic
aisist-
anca
No
66001
66003

66006


66418

66419

66420



66428

66.432

66433

66435

66438
66.451

66454





66 500

66501
66502
66504
66.505

66506

66507
66.600

66603

66700



66802

Title
Air Pollution Control Program 	
Air Pollution Control Manpower Train-
ing . .
Air Pollution Control— Technical Train-
ing
Air Pollution Control Fellowships . .
Construction Grants for Wastewater
Treatment Works 	
Water Pollution Control— State and
Interstate Program 	
Water Pollution Control— State and
Local Manpower Program Develop-
ment . 	 ...
Water Pollution Control Fellowships
Water Pollution Control— Professional
Training
State Public Water System Supervision
Program
State Underground Water Source Pro-
tection Program 	
Water Pollution Control— Lake Restora-
tion Cooperative Agreements
Construction Management Assistance
Hazardous Waste Management Finan-
cial Assistance to States 	
Water Quality Management Planning.
Safe Onnking Water Professional
Training. . 	
Sato Drinking Water Occupational
Training . ...
Sato Dnnking Water Fellowships
Envronmental Protection— Consolidat-
ed Research
Air Pollution Control Research
Pesticides Control Research
Solid Waste Disposal Research
Water Pollution Control— Research.
Development, and Demonstration
Sato Onnking Water Research and
Demonstration
Toxic Substances Research
Environmental Protection Consolidated
Grants— Program Support
Loan Guarantees (or Construction of
Treatment Works
Pesticides Enforcement Program
Grants
State Inventories of Uncontrolled Haz-
ardous Waste Sites
Hazardous Substance Response Trust
Fund (SupeHund)
Funding
mecha-
nism
(')

(')

(')
(4)



(')


(s>
(4)

(!)

(">



(3)
(')

(')
(')

(a)

s)
')

3)
')
')
3)

(')

(')
<">

(')

(")

(')

<">

(')
  1 Cooperative Agreement
  2 Grant Agreement
  a Either
  * Loan or Fellowship
 APPENBIX B TO PART 30—PATENTS AND
         COPYRIGHTS CLAUSES
     Notice and Assistance Clause

  (a)  The  recipient must report  to  the
project officer, promptly and in reasonable
                                          written detail, each known notice or claim
                                          of patent or copyright Infringement on this
                                          agreement.
                                            (b) In the  event  of  any  claim  or  suit
                                          against the Government, on account of any
                                          alleged patent or copyright  infringement
                                          arising out of the performance of this agree-
                                          ment or out of the use of any supplies fur-
                                          nished or work or services performed here-
                                          under.  the recipient must  furnish to the
                                          Government, when requested by the project
                                          officer, all evidence and Information in pos-
                                          session of the recipient pertaining  to such
                                          suit or claim. Such  evidence and informa-
                                          tion must be  furnished at  the expense  of
                                          the Government except where the recipient
                                          has agreed to indemnify the Government.
                                            (c) The recipient must include in each si -
                                          bagreement (including any lower tier suba-
                                          greement) in excess of $10,000 a clause sub-
                                          stantially similar to the  foregoing provi-
                                          sions.

                                             Authorization and Consent Clause

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

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

-------
Environmental Protection Agoncy

Government purposes to publish, translate.
reproduce, deliver, perform, dispose of and
to  authorize  others  so  to do.  all  subject
data,  or copyrlghtable material based on
such data, covered by copyright now or In
the future.
  (c) The recipient shall not Include In the
subject  data any  copyrighted  matter with-
out the  written approval of the project offi-
cer,  unless he provides  the  Government
with the  written permission  of the  copy-
right owner for the Government to  use the
copyrighted matter in the  manner provided
In paragraph (b) above.
  (d) Nothing  contained  in this Appendix
shall  imply a  license to  the  Government
under any  patent or  be construed as affect-
ing the  scope of any license or other rights
otherwise granted to the Government under
any patent.
  (e) Unless otherwise limited  below,  the
Government may. without additional com-
pensation  to the recipient, duplicate, use.
and disclose in any manner and for any pur-
pose whatsoever, and have  others so do. all
subject data.
  (f) Notwithstanding any provisions of this
assistance agreement concerning inspection
and acceptance, the Government shall have
the right at any time to modify,  remove, ob-
literate, or ignore any marking restricting
disclosure of subject data If the marking is
not authorized by the terms of this assist-
ance agreement.
  (g) Data need not be furnished for stand-
ard commercial items or services which are
normally sold,  or have been sold, or offered
to the public commercially by ar y  supplier
and which are incorporated as component
parts  in or to  be  used with the product or
process   being  developed   or   Investigated
under this assistance  agreement, if in lieu
thereof  identification of source and charac-
teristics  (including   performance spec
-------
 331.1
             iPA
    MaJntafci « financial managamanl tyatam
  ing pdndpte md
   GornpV with EPA paar and aUii**straM»a
(10) Obtain EPA'a wrmao auUmliaUon to u»a
  tna racJOJanfa OIMI amptoyaaa or ao^tfpmant
  for conatructton. conatrurton-ralatai
  ttaa, or for rapan or improx«m«nti to •
  '•ciWy ("fom •ooount")........«	„.....-..-......«
(11) OtotUn EPA't approval Man purclwlno
  propwiy or «qulpm«nt mtti • unit acquMHon
  coat of S10.000 or mora	.	»—
/4 9%  ^^kan^i^kd t^^Mh ^h^i^ft^J^ «^iM^M^MtfeJ
(i«i  wompn/ wnn oanain propany
(13) Comply wNh EPA raquiramantt wtian dh>
  poalng of praparty wHh a purcftaaa prloa of
  Si .000 or mora	
(14) Obtaai EPA approval for «w purcriaaa of
(15) Comply wNh EPA raqiAramanti for man-
(16) RaquaatEPA approval to davtato from
  6PA ^^B^aJiQJi^	ii iiiinrlllnln-lllnlllljunllll T	
(17) Foaow cartoJR procaouraa to raajuaat a
  raviaw of an award offlcWa wrtttan final
  daoWon on a dtoputa ovar tna raqUramantt
  man
                                           No.
> 2010-0004
•2010-0004


'20104004

•2010-0004


•20104004

•2010-0004

•2010-0004

•2010-0004



•2010-0004
  • OMB Oaaranoa  Number 2010-0004
OMB for a ttma artanaton on Saptamoar_l9. lfM3.
pubHah OMB*a axtanaton In
  1 Wi by aubmMad to OMB.
  ' No daaranoa
[48 PR 46062. Sept 30. 1983; 49 PR 38946.
Oct. 2.1984]
                         40 CM Ok I  (7-1-91 MHtoN)
                                                        352

-------
APPENDIX E

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

-------
Environmental Protection Agoncy
                           Pad 31
                                         PART  31—UNIFORM  ADMINISTRA-
                                           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 R—Pre-Award Requirement*
                                         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—Past-Award Requirements

                                                 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 SUBA WARDS

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

                                             REPORTS. RECORDS. RETENTION. AND
                                                       ENFORCEMENT

                                         31.40  Monitoring and  reporting program
                                            performance.
                                         31.41  Financial reporting.
                                         31.42  Retention  and across  requirements
                                            for records.
                                         31.43  Enforcement.
                                         31.44  Termination for convenience.
                                         31.45  Quality assurance.

                                           Subpart D—AfteMne-Grant Requirements

                                         31.50  Closeout.

-------
§31.1

31.51  Later disallowances and adjustments.
31.52  Collection of amounts due.

     Subpart I—EnffltoiMntvi [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. 9601 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  NOTE: At 53 PR  8075 and
8087. Mar. 11.  1988. Part 31 was added, ef-
fective October 1.1988.

         Subpart A—General

§ 31.1  Purpose and scope of thig 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" cf 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 ot 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 ai
grantee  or subgrantee cash contribu-
tions.
  "Contract" means (except as used in
the  definitions for "grant" and "sub-
grant"   in  this  section  and  except
where qualified by "Federal") a pro-
curement  contract under a grant or
subgrant.  and means  a procurement
subcontract under a contract.
  "Cost  sharing  or matching" meani
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 grant In
which the contractor or subcontractor

-------
Environmental Protection Agency

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 SF-269
"Financial  Status  Report" (or  other
equivalent report); (2) for construction
grants,  the SF-271  "Outlay Report
and Request  for Reimbursement" (or
other equivalent report).
  "Federally recognized Indian  tribal
government"  means the  governing
body or a governmental agency  of any
Indian tribe, band, nation, or other or-
ganized group or community (includ-
ing any  Native village  as  defined  in
section 3 of the Alaska  Native Claims
Settlement Act, 85 Stat 688) certified
by the Secretary of the  Interior as eli-
gible  for the special  programs  and
services provided by  him through the
Bureau of Indian Affairs.
  "Government" 'means a  State  or
local government or  a federally recog-
nized Indian tribal government.
  "Grant" means an award of  finan-
cial assistance, Including cooperative
agreements, in the form of money,  or
property In lieu of money, by the  Fed-
eral Government to  an  eligible  grant-
ee. The term does not include techni-
cal assistance  which provides services
instead of money, or other assistance
in the form of revenue sharing, loans,
loan guarantees, interest subsidies, in-
surance, or direct appropriations. Also,
the term does not include assistance,
such  as  a fellowship or other lump
sum award, which the  grantee is not
required to account for.
  "Grantee" means the  government to
which a grant is awarded and which is
accountable for the  use of the funds
provided. The grantee  is  the  entire
legal  entity even if  only a particular
component of the entity is designated
in the grant award document.
  "Local government" means a county,
municipality,  city,   town,   township,
local  public authority (including any
public and'  Indian  housing   agency
under the United States Housing Act
                             §31.3

of 1931) school district, special district.
intrastate district, council of govern-
ments (whether or not incorporated as
a  nonprofit corporation under state
law), any other regional or interstate
government entity, or any agency or
instrumentality of a local government.
  "Obligations" means the amounts of
orders placed, contracts and subgrants
awarded, goods and services received.
and similar transactions during a given
period  that will require payment by
the  grantee  during the  same or  a
future period.
  "OMB"  means  the U.S. Office of
Management and Budget.
  "Outlays"   (expenditures)   mean
charges made to  the project or  pro-
gram. They may be reported on a cash
or accrual basis. For reports prepared
on a cash basis, outlays are the sum of
actual  cash disbursement for  direct
charges for goods and services,  the
amount of indirect expense incurred.
the value of in-kind contributions ap-
plied, and the amount of cash ad-
vances and payments made to contrac-
tors and subgrantees. For reports pre-
pared on an accrued expenditure basis.
outlays are the sum of actual cash dis-
bursements, the  amount of indirect
expense incurred,  the value of inkind
contributions applied, and the new in-
crease  (or  decrease) in the amounts
owed by the  grantee for goods  and
other property received,  for services
performed by employees, contractors,
subgrantees, subcontractors, and other
payees, and other amounts becoming
owed under  programs  for which no
current services or performance are re-
quired,  such  as  annuities,  insurance
claims, and other benefit payments.
  "Percentage of  completion method"
refers  to a system under which  pay-
ments are made for construction work
according to the percentage of comple-
tion of the work, rather than  to the
grantee's cost incurred.
  "Prior approval" means documenta-
tion evidencing consent  prior to incur-
ring specific cost.
  "Real property" means land, includ-
ing land improvements,  structures and
appurtenances thereto, excluding  mov-
able machinery and equipment.
  "Share",  when  referring  to   the
awarding   agency's  portion  of  real
property,  equipment   or   supplies.
                                   359

-------
 §31.4
        40 CFR Ch. I (7-1-83 Editic
 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 of 1937.
  "Subgrant"  means an award  of  fi-
 nancial  assistance in  the  form  of
 money,  or property in lieu of money,
 made under a grant by a grantee to an
 eligible  subgrantee. The term includes
 financial assistance when provided by
 contractual legal agreement, but does
 not  include  procurement purchases,
 nor does it include any form of assist-
 ance which is excluded from the defi-
 nition of "grant" in this part.
  "Subgrantee"  means  the  govern-
 ment or other legal entity to which a
subgrant is awarded and which is ac-
countable to the grantee  for the use of
 the funds provided.
  "Supplies" means  all  tangible per-
sonal property other  than  "equip-
ment" as defined in this part.
  "Suspension" means  depending on
 the  context,  either  (1)  temporary
withdrawal  of  the authority  to obli-
 gate grant  funds  pending  corrective
 action by the grantee or subgrantee or
 a decision to terminate  the grant, or
 (2)-an action taken by a suspending of-
 ficial in accordance with agency regu-
 lations implementing E.0.12549 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. "Termmatic
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 grr.
  (3) Refusal  to  extend  a grant
award  additional funds,  to  make
competing or  noncompeting  contn
ation,  renewal, extension, or supc
mental award: or
  (4) Voiding  of a grant upon deter
nation that the award was  obtair
fraudulently,  or was otherwise \l\e-
cr 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  contributor
mean property or services which ber
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  z
ports prepared on a cash basis me:
the amount of obligations incurred ;
the grantee that has not been pa.
For  reports prepared on an accru
expenditure basis, they represent t.
amount of obligations Incurred by t.
grantee for which an outlay has n
been recorded.
  "Unobligated balance"  means  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 subgran;
to governments, except where incoz
sistent with Federal statutes or wit
regulations authorized  in accordant
with the exception provision of i 31.
or:
  (1) Grants and subgrants to Stai
and local institutions  of higher educs
tion or State and local hospitals.
  (2) The block grants  authorized te
the  Omnibus Budget  Reconciliatta
                                   360

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 Environmental Protection Agency

 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 Part
 C of  Title V. Mental  Health Service
 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 (section
 11 of the Act).
  (iv)  Summer Food Service for Chil-
dren (section 13 of the Act),  and
  (v)  Child Care Food Program (sec-
tion 17 of the Act).
  (5) Entitlement grants under the fol-
lowing programs of The Child Nutri-
tion Act of 1966:
                              §31.6

  (i) Special  Milk (section  3  of the
Act), and
  (ii) School  Breakfast (section 4 of
the Act).
  (6) Entitlement grants for  State Ad-
ministrative expenses under  The Pood
Stamp Act of 1977 (section  16 of the
Act).
  (7) A grant  for  an  experimental.
pilot, or demonstration project that is
also supported by  a grant  listed in
paragraph (a)(3) of this section;
  (8) Grant funds awarded under sub-
section 412(e) of the Immigration and
Nationality Act (8 U.S.C. 1522(e)) and
subsection 501(a) of the Refugee Edu-
cation Assistance Act of 1980 (Pub. L.
96-422. 94 Stat.  1809).  for cash assist-
ance, medical assistance,  and  supple-
mental security income benefits to ref-
ugees and entrants and the adminis-
trative costs  of providing the  assist-
ance and benefits;
  (9) Grants  to  local education  agen-
cies under 20 U.S.C.  236 through 241-
l(a), and 242  through 244  (portions of
the Impact Aid program), except for
20 U.S.C. 238(d)(2)(c) and 240(f) (Enti-
tlement  Increase  for  Handicapped
Children); and
  (10) Payments  under the Veterans
Administration's  State   Home  Per
Diem Program (38 U.S.C. 641(a)).
  (b)  Entitlement programs. Entitle-
ment  programs  enumerated above  in
§ 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
which are inconsistent with this pan
are superseded,  except to the  extent
they are required by  statute,  or au-
thorized in accordance with  the excep-
tion provision in § 31.6.

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

-------
 §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. 1L. 1988. and
 amended at 53 FR 8075. Mar. 11. 1988]
  EFFECTIVE DATE NOTE: At 53 FR 8075, Mar.
 11. 1988. § 31.6 (cxi) and (d) were added, ef-
 fective October 1. 1988.

 Subpart B— Pro-Award Requirements

 § 31.10 Forma for applying for grants.
  (a) Scope. (1) This section prescribes
 forms and instructions to be used by
 governmental  organizations  (except
 hospitals  and  institutions  of higher
 education operated  by  a government)
 in applying for grants.  This section is
 not  applicable,  however, to formula
 grant programs which  do not require
applicants to apply for funds  on a
project basis.
  (2) This section applies only to appli-
cations to Federal agencies for grants,
 and  is not required to be  applied by
 grantees in dealing with applicants for
subgrants. However, grantees are en-
 couraged  to avoid  more detailed or
 burdensome application  requirements
 for subgrants.
  (b) Authorized  forms  and  instruc-
 tions for  governmental organizations.
 (1)  In applying for grants, applicants
 shall only  use standard  application
 forms or  those  prescribed  by the
 granting agency with the approval of
 OMB under the Paperwork Reduction
 Act of 1980.
  (2) Applicants  are not required  to
 submit more than the original and two
 copies of preapplications  or  applica-
 tions.
         40 CFR Ch. I (7-1-88 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 
-------
  (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 system 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 tune 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. 1988. §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
         40 CFR Ch. I (7-1-33 Edition)
  (2)  Accounting  records.  Grantees
and  subgrantees   must   maintain
records which adequately identify the
source and application  of  funds  pro-
vided for financially-assisted activities.
These records must  contain informa-
tion pertaining to grant or subgrant
awards  and   authorizations,  obliga-
tions, unobligated  balances, assets, li-
abilities, outlays or expenditures, and
income.
  (3)  Internal control Effective con-
trol and accountability must be main-
tained for all grant and subgrant cash,
real and personal property, and other
assets. Grantees and subgrantees must
adequately safeguard all such  proper-
ty  and  must  assure  that  it  is used
solely for authorized purposes.
  (4) Budget  control  Actual expendi-
tures  or outlays must  be compared
with budgeted amounts for each grant
or  subgrant.  Financial  information
must be related to performance or pro-
ductivity data, including the develop-
ment  of unit cost  information when-
ever appropriate  or  specifically  re-
quired in the grant or subgrant agree-
ment. If unit cost data are required.
estimates based on available documen-
tation will be accepted whenever possi-
ble.
  (5) Allowable cost.  Applicable OMB
cost principles, agency program regu-
lations,  and the terms  of  grant  and
subgrant agreements will be followed
in determining the reasonableness, al-
lowability. and allocability of costs.
  (6) Source documentation. Account-
ing records must be supported by such
source  documentation  as  cancelled
checks,  paid  bills,  payrolls, time  and
attendance records, contract and sub-
grant award documents, etc.
  (7)  Cash management Procedures
for minimizing the time elapsing be-
tween the transfer of funds from the
U.S. Treasury  and disbursement  by
grantees and  subgrantees must be fol-
lowed whenever advance payment pro-
cedures are used. Grantees must estab-
lish reasonable procedures to ensure
the receipt of reports on subgrantees'
cash balances and  cash disbursements
in sufficient  time  to  enable them to
prepare complete  and accurate cash
transactions reports  to  the awarding
agency. When advances  are made by
letter-of-credit  or  electronic transfer
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  Payment.

  (a) Scope. This section prescribes the
basic standard and the methods under
which a Federal agency will make pay-
ments to  grantees,  and grantees will
make payments  to subgrantees  and
contractors.
  (b)  Basic standard.  Methods  and
procedures  for payment  shall  mini-
mize  the  time elapsing  between the
transfer of funds  and disbursement by
the grantee or subgrantee. in accord-
ance with Treasury regulations at 31
CFR Part 205.
  (c) Advances. Grantees and subgran-
tees shall be paid in advance, provided
they maintain or demonstrate the will-
ingness and ability  to maintain proce-
dures to  minimize  the time elapsing
between the transfer of the funds and
their disbursement  by the grantee or
subgrantee.
  (d)  Reimbursement. Reimbursement
shall  be  the preferred method when
the requirements in paragraph (c) of
this section" are not  met. Grantees and
subgrantees may  also be paid by reim-
bursement for any construction grant.
Except as otherwise specified in regu-
lation, Federal agencies shall not use
the percentage of completion method
to pay construction  grants. The grant-
ee or subgrantee may use that method
to pay its construction contractor, and
if  it does, the awarding agency's pay-
ments to the grantee or  subgrantee
will be based on  the grantee's or sub-
grantee's actual rate of disbursement.
  (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 reiin-
                                   364

-------
 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 on  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.M

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

-------
 9-41.2,*
                              HO V.I-R v.n. i i* -i-oo
   For me costs oi i
 State, local or Indian tnbal
  government
 Pnvate nonprofit organization
  other than an (1) institution
  o(  higher education. (2)
  hospital, or (3) organization
  named  in OMB Circular A-
  122 as not subject to that
  circular
 Educational institutions
 For-proM  organization other
  than a  hospital and an or-
  ganization named in OBM
  Circular A-122 as not sub-
  ject to that circular
                      Use the principles in—
OMB Circular A-87

OBM Circular A-122
OMB Circular A-21
48  CFR Pan  31  Contract
 Cost Principles and Proce-
 dures or uniform cost ac-
 counting  standards that
 comply with cost principles
 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 (SP-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 other Federal costs-sharing  re-
 quirements.  Neither costs  nor  the
 values of third party in-kind contribu-
 tions may count towards  satisfying a
 cost sharing or matching requirement
 of  a grant  agreement  if  they  have
 been or will be counted towards satis-
 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 5 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 allocabllity 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)xSome 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 be valued at rates con-
sistent with those ordinarily paid for
similar  work in the grantee's or sub-
grantee's organization. If the grantee
or subgrantee does not have employ-
ees performing similar work, the rates
will be  consistent with those ordinarily
paid by other employers  for similar
work in the same  labor  market.  In
                             §31.24

either  case, a reasonable  amount for
fringe benefits may be included in the
valuation.
  (2)  Employees  of  other  organiza-
tions. When an employer other than a
grantee, subgrantee, or cost-type con-
tractor furnishes free of charge the
services of an employee in the employ-
ee's normal line of work,  the  services
will be valued at the employee's regu-
lar rate of pay exclusive of the em-
ployee's fringe benefits and overhead
costs. If the services are in a different
line of work, paragraph (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 supplies at
the time of donation.
  (2) If a third party donates  the use
of equipment or space in a building
but retains title, the contribution will
be valued at the fair rental rate of the
equipment or space.
  (e) Valuation of third party donated
equipment, buildings, and land. If a
third party donates equipment, build-
ings, or land,  and title  passes to a
grantee or subgrantee. the  treatment
of the donated property  will  depend
upon the purpose of the grant or sub-
grant, as follows:
  (1) Awards for capital expenditures.
If the purpose of  the grant  or sub-
grant is to assist the grantee or sub-
grantee in the acquisition of property,
the market value of that property at
the time of donation may be  counted
as cost sharing or matching.
  (2) Other awards. If assisting in the
acquisition of property is  not the pur-
pose of the grant  or subgrant, para-
graphs (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 that
the  approval be obtained  from the
Federal agency as well as  the  grantee.
In all cases, the approval may be given
only if a purchase of the equipment or
rental  of the land would  be approved
                                   367

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$31.25

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-sharing or matching.
  (11) 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
principles specified in 8—22, in the
same way as depreciation or  use allow-
ances for purchased equipment and
buildings. The amount of depreciation
or usCv allowances for donated equip-
ment toad buildings  is  based on .the
property's market value at the time it
was donated.
  (f) VUtuttion of grantee or tvbgran-
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)  Appraisal of real property. In
some  cases under paragraphs (d), (e)
and (f) of this section, it will be neces-
sary to establish the market value of
land or a building or the fair  rental
rate of land or of 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.

§ 31.25 Program income.
  (a)  QeneraL 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
         40 CFR Qi. I (7-1-88 fcdit.c

grant funds, from the sale of comrm
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 Fedei
agency, program income does not
elude interest on grant funds, rebat
credits, discounts, refunds, etc. and
terest earned on any of them.
  (b)  Definition of program incor,
Program income means gross Incoi
received by the grantee or subgrant
directly generated by a grant suppo
ed activity, or earned only as a resi
of the grant agreement during t
grant  period.  "During   the   gra
period" is the time  between the eff*
tive date of the award and the end!
date of the award reflected in the fir
financial report.
  (c)   Cost   of  generating  progn
income. If authorized by Federal rei
latlons or the grant agreement, co:
incident to the generation  of progrs
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 progn
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 progn
income only if the revenues are spec
ically  identified in the grant agr«
ment or Federal agency regulations
program income. (See 8 31.34.)
  (f) Property. Proceeds from the si
of real property or equipment will
handled in accordance with  the i
quirements of 88 31.31 and 31.32.
  (g)  Use of program income. Progrc
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 alb
native (or  a combination of the alt
natives). In specifying alternatives, t
Federal  agency may distinguish 1
tween income earned by the grant
and income earned  by subgrantees &
between   the«,«ouroes,   kinds.
                                   368

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 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) Cott 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.
931.2*
                 audit
  (a)  Batie rate. Grantees and  sub-
grantees are responsible for obtaining
andtta tn accordance with  the Single
Audit Art of 1994 (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 fin*nri«A
and compliance audits.
  tb)- Subgrantee*. State or  local  gov-
ernments, as  those  terms are  defined
for purposes of the Single  Audit  Act.
that receive Federal  financial assist-
ance and provide $25,000 or more  of it
In a fiscal year to a subgrantee  shall:
                            §31.50

  (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 subgran-
tee spent Federal assistance funds  pro-
vided in accordance  with  applicable
laws and regulations. This may be ac-
complished by reviewing an audit of
the subgrantee  made in  accordance
with  the  Act.  Circular  A-110.  or
through other means (e.g., program
reviews) if the subgrantee has not had
such an audit;
  (3) Ensure that  appropriate correc-
tive action  is taken within six months
after receipt of the audit report In in-
stance of noncompliance with Federal
laws and regulations;
  (4)  Consider  whether  subgrantee
audits necessitate  adjustment of the
grantee's own records; and
  (5)  Require each   subgrantee to
permit  independent auditors  to have
access to the records  and financial
statement*.
  (c)  Auditor  selection. In arranging
for audit services,  i 31.36 shall be fol-
lowed,

  CHARGES, PROPERTY, AND SUBAWARDS

511 JO  Change*.
  (•)  General Grantees and subgran-
teea are permitted to  rebudget within
the approved direct  cost  budget to
meet  unanticipated requirements and
m^y make limited program changes to
the approved project.  However, unless
waived  by  the awarding agency,  cer-
tain  types  of  post-award  changes in
budgets and projects shall require the
                                   389

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§31.31
         40 CFR Ch. I (7-1-88 Edition)
prior written approval of the awarding
agency.
  (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-
cy'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)  Additional 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's 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 continues
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)
takes place will, as a minimum, meet
the following requirements:
  (1) Property records must be main-
tained that include a description  of
the property, a serial number or other
identification number, the source  of
property, who holds title, the acquisi-
tion date, and cost of the property,
percentage of Federal participation in
the cost of the property, the location.
use and condition of the property, and
any  ultimate disposition data includ-
ing the date of disposal and sale price
of the property.
  (2) A physical inventory of the prop-
erty must be taken and the results rec-
onciled with  the property records  at
least once every two years.
  (3) A control system must be devel-
oped to ensure adequate safeguards to
prevent loss,  damage, or theft of the
property. Any loss, damage, or theft
shall be investigated.
  (4)  Adequate  maintenance  proce-
dures must be developed to keep the
property in good condition.
  (5) If the grantee or subgrantee is
authorized or  required to  sell  the
property,   proper  sales   procedures
must be  established  to  ensure the
highest possible return.
  (e) Disposition. When original or re-
placement equipment  acquired under
a  grant  or  subgrant  is  no  longer
needed for the original project or pro-
gram or  for other activities currently
or previously supported by a Federal
agency, disposition of the equipment
will be made as follows:
  (1) Items of equipment with a cur-
rent per-unit fair market value of less
than $5,000 may be retained, sold or
otherwise disposed of with no further
obligation to the awarding agency.
  (2) Items of equipment with a cur-
rent per  unit  fair  market  value  in
excess of $5,000 may be retained  or
sold and  the awarding  agency shall
have a right to  an amount calculated
by multiplying  the  current market
value  or  proceeds  from sale by  the
awarding agency's share of the equip-
ment.
  (3) In cases where a grantee or sub-
grantee fails to take appropriate dispo-
sition  actions, the  awarding  agency
may direct the grantee or subgrantee
to take excess and disposition actions.
  (f) Federal equipment. In the event a
grantee or subgrantee is provided fed-
erally-owned equipment:
  (1) Title will remain vested  in the
Federal Government.
  (2)  Grantees  or sub gran tees 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  Copyrights.
  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
 fol States. When procuring property
 and services under a grant, a State will
 follow  the same policies  and  proce-
 dures it uses for procurements from its
 non-Federal  funds.  The  State will
 ensure that every purchase  order or
 other contract includes any clauses re-
 quired by Federal statutes and execu-
 tive orders and their  implementing
 regulations. Other grantees and sub-
 grantees  will  follow  paragraphs  (b)
 through (i) in this section.
 (b)   Procurement   standards.   (1)
 Grantees  and  subgrantees  will  use
 their own  procurement  procedures
 which  reflect  applicable  State  and
 local laws and  regulations,  provided
 that the procurements conform to ap-
 plicable Federal law and the standards
 identified In this section.
 (2) Grantees  and  subgrantees will
maintain  a  contract  administration
system which ensures that contractors
perform in accordance with the terms,
conditions, and specifications of their
contracts or purchase orders.
 (3) Grantees  and  subgrantees will
maintain a written code of standards
of conduct governing the performance
of   their  employees  engaged  in  the
award and administration of contracts.
                             §31.36

No employee, officer or agent of  the
grantee or subgrantee shall participate
in selection, or in the award or admin-
istration of a  contract supported by
Federal funds if a conflict of interest.
real or apparent,  would  be  involved!
Such a conflict would arise when:
  (D The employee, officer or agent,
  (ii) Any  member of his immediate
family,
  dii) 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  and  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  subgyantee'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-
                                   373

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$31.36
         <»u irn v.n. i V./-I-OQ comon;
ever such use is feasible and reduces
project costs.
  (7) Grantees and subgrantees are en-
couraged  to  use  value engineering
clauses in  contracts  for construction
projects of sufficient  size to offer rea-
sonable opportunities for cost reduc-
tions. Value engineering is a systemat-
ic and creative  anaylsis of  each con-
tract item or task to ensure that its es-
sential  function is provided  at  the
overall lower cost.
  (8)  Grantees  and subgrantees  will
make awards only to responsible con-
tractors possessing  the ability  to  per-
form successfully under the terms and
conditions of a proposed procurement.
Consideration will  be  given to  such
matters as contractor integrity,  com-
pliance with public policy,  record of
past performance,  and  financial  and
technical resources.
  (9)  Grantees  and subgrantees  will
maintain records sufficient  to detail
the significant  history of a procure-
ment. These records  will include, but
are not necessarily  limited to the fol-
lowing: rationale for  the method of
procurement,  selection  of  contract
type, contractor selection or rejection,
and the basis for the contract price.
  (10)  Grantees and  subgrantees will
use time and material  type contracts
only—
  (i) After a  determination that no
other contract is suitable, and
  di) 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 relieve the grantee or
subgrantee of any contractual  respon-
sibilities under  its  contracts. Federal
agencies will not substitute their judg-
ment for that of the grantee  or sub-
grantee unless the matter is primarily
a  Federal concern. Violations of law
will be referred to  the local. State, or
Federal authority having proper juris-
diction.
  (12)  Grantees and  subgrantees  will
have protest procedures to handle and
resolve disputes relating to their  pro-
curements and shall in all  instances
disclose  information  regarding  the
protest to the awarding agency. A  pro-
testor  must exhaust all administrative
remedies  with the grantee  and  sub-
grantee before pursuing a protest with
the Federal agency.  Reviews of  pro-
tests by the  Federal agency will be
limited to:
  (i) Violations of Federal law or regu-
lations and the standards of this sec-
tion (violations of  State  or  local law
will be under  the jurisdiction of State
or local authorities) and
  (ii) Violations of the  grantee's or
subgrantee's  protest  procedures  for
failure to review a complaint or  pro-
test. Protests  received by the Federal
agency other than  those  specified
above  will be  referred to the grantee
or subgrantee.
  (.^Competition. (1) All  procurement
transactions  will be conducted  in  a
manner providing full and open com-
petition consistent  with the standards
of § 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.
  (ii)   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 statement  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 domestic
construction materials in preference to
nondomestic material if it is priced no
more than 6  percent  higher than the
bid or offered price of the nondomes-
tic material, including 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;
  
-------
§31.36
         40 CFR Ch. I (7-148 Edition)
property that  do not cost more than
$25,000 in the  aggregate. If small pur-
chase 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-
tract  (lump sum  or  unit  price)  is
warded  to the  responsible bidder
whose bid. conforming with all the
material terms and conditions of the
nvitation  for  bids,  is the lowest in
Drice.  The sealed  bid method is the
areferred  method  for procuring  con-
struction,   If    the   conditions  in
5 31.36(d)(2)(i)  apply.
 (i) In order for sealed bidding  to be
feasible,   the   following  conditions
should be present:
 (A) A complete, adequate, and 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
i firm 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
>ublicly 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
)idder 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
iward 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
;osts shall be  considered in determin-
ng which bid  is lowest. Payment dis-
tounts will only  be used to determine
he low  bid when prior  experience in-
licates 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) Proposals will be  solicited from
an  adequate number  of  qualified
sources;
  (iii)  Grantees and subgrantees  will
have a method for conducting techni-
cal  evaluations of the  proposals  re-
ceived  and for selecting awardees:
  (iv) Awards will be made to  the  re-
sponsible firm whose proposal  is most
advantageous to   the  program, with
price and other factors considered;  and
  (v) Grantees and subgrantees may
use  competitive  proposal  procedures
for  qualifications-based  procurement
of  architectural/engineering   (A/E)
professional services whereby competi-
tors' qualifications are  evaluated  and
the most qualified competitor Is select-
ed,  subject to negotiation  of fair  and
reasonable    compensation.    The
method, where price is not used as a
selection factor, can only be used in
procurement of A/E professional serv-
ices. It cannot be used to  purchase
other  types  of services though A/E
firms are a potential source to perform
the proposed effort.
  (4) Procurement by noncompetitive
proposals is procurement through so-
licitation of a proposal from only one
source,  or   after  solicitation of  a
number of sources, competition is  de-
termined inadequate.
  (i) Procurement by noncompetitive
proposals may be used only  when the
award  of a contract is infeasible under
small purchase procedures, sealed  bids
or  competitive proposals  and one of
the following circumstances applies:
  (A) The item is available only from a
single  source:
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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.
  di) Cost analysis, i.e..  verifying the
 proposed cost data, the projections of
 the  data, and the evaluation of the
 specific elements of costs and profit,  is
 required.
  (iii) Grantees and subgrantees may
 be required  to  submit the  proposed
 procurement to the awarding agency
 for  pre-award review in  accordance
 with paragraph (g) of this section.
  ^e)  Contracting  with small and 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.
  (fi_ 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 melhods  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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 8 31.36
         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 subgrantee's• pro-
 curement procedures or operation fails
 to  comply  with  the  procurement
 standards in this seciton; or
  (ii) The procurement is expected to
 exceed  $25,000 and  is to  be awarded
 without competition or only one bid or
 offer is  received in response to a solici-
 tation; or
  (iii) The procurement, which is  ex-
 pected  to exceed $25.000,  specifies  a
 "brand name" product; or
  (iv) The proposed award over $25.000
 is to be  awarded to other than the ap-
 parent low bidder under a sealed  bid
 procurement: or
  (v) A proposed contract modification
changes the scope of a contract or in-
creases  the contract amount by more
than $25,000.
  (3) A  grantee or subgrantee will be
exempt  from the pre-award review in
paragraph (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.
 Jhl Bonding requirements. For con-
struction or facility improvement con-
tracts  or  subcontracts  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.
  n) Contract provisions. A grantee's
ana subgrantee's contracts must con-
tain provisions in paragraph (i) of this
section. Federal agencies are  permit-
ted  to  require "changes,  remedies.
changed  conditions, access and records
retention,  suspension  of  work, and
other clauses approved by the Office
of Procurement  Policy.
  (1)  Administrative,  contractual,  or
legal remedies in instances where con-
                                   378

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 environmental Krotection Agency

 tractors  violate or  breach contract
 terms, and provide for such sanctions
 and penalties as may be appropriate.
 (Contracts other  than  small  pur-
 chases)
  (2) Termination  for  cause and (or
 convenience by  the  grantee or sub-
 grantee   including  the  manner  by
 which it will be effected and the basis
 for settlement. (All contracts in excess
 of $10.000)
  (3)  Compliance   with  Executive
 Order 11246 of September 24. 1965 en-
 titled "Equal Employment Opportuni-
 ty." as amended by  Executive Order
 11375 of October 13.  1967 and as sup-
 plemented  in  Department  of  Labor
 regulations (41 CFR Chapter 60). (All
 construction  contracts   awarded  in
 excess of $10,000 by grantees and their
 contractors or subgrantees)
  (4) Compliance  with the Copeland
 "Anti-Kickback" Act (18 U.S.C. 874) as
 supplemented in Department of Labor
 regulations (29 CFR Part 3). (All con-
 tracts  and sub grants  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 in excess of
 $2,000,  and in  excess  of $2,500  for
 other contracts which involve the em-
 ployment of mechanics or laborers)
  (7) Notice of  awarding agency re-
 quirements and regulations  pertaining
 to reporting.
  (8) Notice of  awarding agency re-
quirements and regulations  pertaining
 to patent rights with respect to any
 discovery or invention which arises or
 is developed In the course of or under
such contract.
  (9) Awarding  agency  requirements
 and  regulations  pertaining  to  copy-
 rights and rights in data.
  (10) Access by the grantee, the sub-
grantee,  the Federal  grantor agency,
                             §31.36

the  Comptroller   General  of  the
United States, or any of their duly au-
thorized representatives to any books.
documents, papers, and records of the
Contractor which  are  directly perti-
n-->nt to that specific contract for the
purpose of making audit, examination.
excerpts, and transcriptions.
  (11)   Retention   of   all   required
records for three years after grantees
or subgrantees make  final  payments
and  all  other pending matters are
closed.
  (12) Compliance  with all applicable
standards,  orders,  or  requirements
issued  under section 306 of the Clear
Air Act (42 U.S.C. 1857(h)). section 508
of the  Clean Water  Act  (33  U.S.C.
1368). Executive Order 11738. and En-
vironmental Protection Agency regula-
tions  (40 CFR Part 15). (Contracts.
subcontracts.   and   subgrants   of
amounts in excess of $100,000)
  (13) Mandatory standards and  poli-
cies  relating to   energy   efficiency
which  are  contained   in  the  state
energy  conservation  plan  issued in
compliance  with the  Energy  Policy
and Conservation Act (Pub. L. 94-163).
     Payment to consultants. (1)  EPA
    limit its  participation in the salary
rate (excluding overhead) paid to  indi-
vidual  consultants retained by grant-
ees or by a  grantee's  contractors or
subcontractors to the maximum daily
rate for a GS-18. (Grantees may, how-
ever, pay consultants more than this
amount).  This limitation  applies to
consultation services of designated in-
dividuals with specialized  skills  who
are paid at a daily or hourly rate.  This
rate  does not include  transportation
and subsistence  costs  for  travel  per-
formed; grantees will pay these in ac-
cordance with their normal travel 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.
  Oc£ Use of the same architect or engi-
neer during  construction.  (1)  If the
grantee is satisfied with the qualifica-
tions and performance of the architect
or engineer who provided any or all of
the facilities planning  or design  serv-
ices for a waste-water treatment works
project and wishes to retain that  firm
                                   379

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§31.37
         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 grantee  attests that:
  (A) The initial request for proposals
clearly stated  the  possibility that the
firm or  individual selected could  be
awarded  a subagreement  for services
during construction; and
  (B)  The firm or individual  was se-
lected for facilities planning or design
services in accordance with procedures
specified in this section.
  (C) No employee, officer or agent of
the grantee, any member of their im-
mediate  families,   or  their partners
have financial or other interest in the
firm selected for award; and
  (D)  None of the grantee's officers.
employees or  agents solicited  or ac-
cepted gratuities,  favors or anything
of monetary value  from contractors or
other parties to subagreements.
  (2) However, if the grantee uses the
procedures in  paragraph (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 PR 8068 and 8087, Mar.  11. 1988. and
amended at S3 FR 8075. Mar. 11. 19881
  EFFECTIVE DATE NOTE: At 53 FR 8075. Mar.
11.  1988.  S 31.36 (c)(5). (j) and (k) were
added, effective October 1. 1988.

§ 31.37  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  monitonng  must
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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 due 30 days after the
 reporting period. The final perform-
 ance report will-be due 90 days after
 the expiration or termination of grant
 support.  If  a justified request  is sub-
 mitted  by  a  grantee,  the Federal
 agency may extend the due date for
 any performance report. Additionally.
 requirements for  unnecessary  per-
 formance reports may be  waived by
 the Federal agency.
  (2) Performance reports will contain,
 for  each grant, brief information on
 the following:
  (i) A comparison  of  actual  accom-
 plishments  to the  objectives  estab-
 lished for  the period. Where  the
output of the project can be quanti-
 fied, a computation of the cost  per
 unit of output may  be required if that
 information will be useful.
  (ii) The reasons for slippage if estab-
lished objectives were not met.
  (ill) 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  grants
and  subgrants.  The  Federal  agency
will require additional formal perform-
ance  reports  only when  considered
necessary, and never more frequently
than quarterly.
  (d) Significant developments. Events
may occur between the scheduled per-
formance reporting dates which have
significant  impact upon  the grant or
subgrant supported activity. In such
cases,  the  grantee must inform the
Federal agency as soon as the follow-
ing types of conditions become known:
  (1) Problems, delays, or adverse con-
ditions which will materially  impair
the ability to meet the objective of the
award. This disclosure must include a
statement of the action taken, or con-
templated,  and any assistance needed
to resolve the situation.
  (2)  Favorable  developments  which
enable meeting time schedules and ob-
jectives sooner or at less cost than an-
ticipated or producing more beneficial
results than originally planned.
  (e) Federal agencies may  make site
visits as warranted by program needs.
  (f) Waivers, extensions. (1) Federal
agencies  me.y  waive any performance
report required  by this part  if not
needed.
  (2) The grantee  may waive any per-
formance report  from a subgrantee
when not needed. The  grantee  may
extend the due date for  any perform-
ance report from  a subgrantee if the
grantee will still be able to meet its
performance reporting  obligations to
the Federal agency.

§ 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:
  (1)  Submitting  financial  reports to
Federal agencies, or
  (ii)  Requesting  advances or  reim-
bursements  when letters of  credit are
not used.
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                                              40 CFR Ch. I (7-1-88 Edition)
  (2) Grantees  need  not  apply the
 forms prescribed  in this  section  in
 dealing with their  subgrantees. How-
 ever, grantees shall not impose more
 burdensome requirements on subgran-
 tees.
  (3) Grantees shall follow all applica-
 ble standard and supplemental  Feder-
 al  agency instructions  approved by
 OMB to the extend required under the
 Paperwork Reduction Act of 1980 for
 use in connection with forms specified
 in paragraphs (b) through  (e) of this
 section. Federal  agencies  may issue
 substantive   supplementary  instruc-
 tions only with the approval of OMB.
 Federal agencies may shade out or in-
 struct  the grantee  to  disregard any
 line item  that  the  Federal agency
 finds unnecessary for its decisionmak-
 ing purposes.
  (4) Grantees will  not be required  to
 submit more than the original and two
 copies of  forms required under this
 part.
  (5) Federal agencies may provide
 computer outputs to grantees to expe-
 dite or contribute  to the accuracy  of
 reporting.   Federal  agencies    may
 accept the required information from
 grantees in machine usable format  or
 computer  printouts instead of  pre-
scribed forms.
  (6) Federal agencies may waive any
 report required by  this section  if not
needed.
  (7) Federal agencies may extend the
due date of any financial report upon
receiving a  justified  request from  a
grantee.
  (b)  Financial  Status  Report—(I)
 Form.  Grantees  will  use  Standard
Form 269 or 269A. Financial  Status
 Report, to report the status of funds
 for all nonconstruction grants and for
construction grants when required  in
accordance with § 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-
counting  records  are  not  normally
 kept on the accural basis, the grantee
 shall not be required to convert its ac-
 counting  system  but  shall develop
 such accrual information through and
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—(I) 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. Grant-
ees must  submit the report no later
than  15 working  days following  the
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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, see
 paragraph (e)(l) of this section.)
  (3)  The frequency  for submitting
 payment   requests  is   treated  in
 § 31.41(b)(3).
  (e) Outlay report and request for re-
 imbursement  for  construction  pro-
 grams. (1) Grants that  support con-
 struction activities paid by reimburse-
 ment method.
  (i)  Requests  for  reimbursement
 under construction grants will be sub-
 mitted on Standard Form 271. Outlay
 Report and Request for Reimburse-
 ment for Construction Programs. Fed-
 eral agencies may, however,  prescribe
 the Request for  Advance  or  Reim-
 bursement   form,   specified    in
 § 31.41(d). instead of this form.
  (ii) The frequency for submitting re-
 imbursement requests  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.  (1) When a construc-
 tion grant is paid by letter of credit.
 electronic funds transfer  or Treasury
check  advances,   the  grantee  will
 report   its  outlays to  the Federal
 agency  using  Standard  Form  271,
Outlay Report  and Request for Reim-
 bursement for Construction Programs.
The Federal agency will  provide any
necessary special  instruction. Howev-
                             §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  advance
based on  periodic requests  from  tfc
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 § 31.41(b)  for the  Outla
Report  and  Request  for Reimbursi
ment for Construction  Programs.
  (3) Accounting basis.  The accountin
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 aj
plies to  all financial and programmati
records, supporting documents, statL
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 o
the grant agreement.
  (2) This section does not apply t
records  maintained by contractors o
subcontractors. For a  requirement t
place a provision concerning  records i
certain   kinds   of    contracts,   se
§31.36(0(10).
  (b) Length of retention period.  (3
Except as otherwise provided, recorc
must be retained for three years froi
the starting  date specified in  par
graph (c) of this section.
  (2) If  any litigation,  claim, negoti
tion. audit or other action involvir
the records  has  been  started  befoi
the expiration  of the 3-year perio
the records  must be  retained unl
completion of the action and resol
tion of  all issues which arise from i
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 CFR Ch. I (7-1-88 Edition;
 when  it determines that the records
 possess  long-term  retention  value.
 When the records are  transferred to
 or maintained by  the Federal agency.
 the  3-year  retention requirement is
 not applicable to  the grantee or sub-
 grantee.
  (c)   Starting   date  of  retention
 period—(1) General When grant sup-
 port is continued or renewed at annual
 or other intervals,  the retention period
 for the records of  each funding period
 starts on the day  the grantee or sub-
 grantee  submits  to  the  awarding
 agency  its single  or last  expenditure
 report  for that period.  However, if
 grant support is continued or renewed
 quarterly,  the retention period  for
 each year's records starts on the day
 the grantee  submits its  expenditure
 report for the last quarter of the Fed-
 eral fiscal year. In all other cases,  the
 retention period starts on the day  the
 grantee submits its final  expenditure
 report.  If an expenditure report  has
 been  waived, the retention  period
 starts  on  the day the  report would
 have been due.
  (2)  Real property  and equipment
 records. The  retention period for real
 property and equipment records starts
 from the date of the disposition or re-
 placement or transfer at the direction
 of the awarding agency.
  (3) Records for income transactions
 after  grant  or subgrant  support  In
some   cases  grantees  must  report
 income  after the period of grant sup-
port. Where  there is such a require-
ment,  the retention  period for  the
records pertaining to the earning of
the income starts from the end of  the
 grantee's  fiscal  year  in which  the
income is earned.
  (4) Indirect cost  rate proposals, cost
 allocations plans,  etc. This paragraph
applies to the following  types of docu-
ments, and  their  supporting records:
indirect cost rate computations or pro-
posals, cost allocation plans, and any
similar  accounting computations  of
the rate at which a particular group of
costs is chargeable (such as computer
 usage chargeback  rates or  composite
 fringe benefit rates).
  (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—(I) 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 noncompliance. 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
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               rrofvctioci 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  PR 8068 and 8087. Mar  11. 1988. and
amended at 53 FR 8076. Mar 11. 1988]
  EFFECTIVE DATE NOTE: At 53 FR 8076. Mar.
11.  1988. §31.43 (a)(3)d) 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 subgrantee
upon  written   notification  to   the
awarding  agency, setting  forth  the
reasons for such termination, the ef-
fective date, and in the case of  partial
termination, the  portion to be termi-
nated.  However,  if.  in the  case  of  a
partial  termination,  the  awarding
agency determines that  the remaining
portion of  the  award will not  accom-
plish   the  purposes  for which  the
award  was made, the awarding agency
may terminate the award in its  entire-
ty under either § 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 FR 8076. Mar. 11. 1988]
  Emcrrvz DATE NOTE At 53 FR 8076, Mar.
11. 1988. I 31.45 was added, effective Octo-
ber 1. 1988.

     Subpart D—After-The-Grant
           Requirements

§ 31.50  CloseouL
  (a) General The Federal agency will
close  out the  award when  it' deter-
mines  that all applicable administra-
                                    385

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§31.51
         40 CFR Ch. I (7-1-88 Edition)
tive actions and  all required  work of
the grant has been completed.
  (b) Reports. Within 90 days after the
expiration or termination of the grant.
the grantee must submit all financial.
performance,  and  other reports  re-
quired  as a condition  of  the grant.
Upon request by the grantee. Federal
agencies may  extend this  timeframe.
These may include but are not limited
to:
  (1)  Final  performance or  progress
report.
  (2) Financial Status Report  (SF 269)
or Outlay Report and Request for Re-
imbursement for Construction  Pro-
grams (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 provided
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.

  Subport E—Entitlement [Reserved]

         Subport F—Disputes

  SOURCE: 53 FR 8076. Mar. 11. 1988. unless
otherwise noted.
  EFFECTIVE DATE NOTE: At 53 PR 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 official's
decision will  constitute  final agency
action unless a request for  review is
filed by registered mail, return receipt
requested, within  30 calendar days of
the date of the decision.
  (1)  For final decisions  issued by an
EPA disputes decision official at Head-
quarters,  the request for review shall
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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:
  (DA 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.
  (e) The  disputant(s) 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.
                      Port 31, App. A

  (k)  If  the Assistant Administrator
decides to review the Regional Admin-
istrator's decision, the review will gen-
erally be limited to the written record
on which the Regional Administrator's
decision  was based. The Assistant Ad-
ministrator may allow the disputant(s)
to submit briefs in support of the peti-
tion for review and may provide an op-
portunity for an informal conference
in order to clarify technical or  legal
issues. 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
§ 31.36(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 defines 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
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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 the  programs
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:
  (1) A 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" ifion and methods and  procedures
adopted oy management to ensure that:
  (1) Resource use is consistent with laws.
regulations, and policies;
  (2)  Resources  are safeguarded  against
waste, loss, and misuse; and
  (3)  Reliable data  are obtained, main-
tained, and fairly disclosed in reports.
  h. "Indian tribe" means any Indian tribe,
band, nations, or other organized group or
community, including  any Alaskan  Native
village or regional or village corporations (as
defined in. or established under, the Alas-
kan Native Claims Settlement  Act) that is
recognized by  the United States as eligible
for the special programs and services provid-
ed by the United States  to Indians because
of their status as Indians.
  i. "Local government"  means any unit of
local government within a State, including a
county, a  borough, municipality, city, town,
township, parish, local public authority,  spe-
cial district, school  district, intrastate  dis-
trict, council of governments, and any other
instrumentality of local government.
  j. "Major Federal Assistance Program." as
defined by Pub. L.  98-502,  is described in
the Attachment to this Circular.
  k. "Public accountants" means those indi-
viduals who meet the qualification stand-
ards included  in generally accepted govern-
ment auditing standards for personnel  per-
forming government audits.
  1. "State" means any State of the United
States, the District of Columbia, the Com-
monwealth of Puerto  Rico, the Virgin Is-
lands.  Guam.  American Samoa, the Com-
monwealth of the  Northern  Mariana Is-
lands, and the Trust Territory of the Pacific
Islands, any   instrumentality  thereof,  and
any   multi-State, regional,  or  interstate
entity that has governmental functions and
any Indian tribe.
  m. "Subrecipient" means any person or
government department, agency, or  estab-
lishment that receives Federal financial as-
sistance to carry out a program through a
State or local government, but does not in-
clude an individual that is a beneficiary of
such a program. A subrecipient may also be
a direct recipient of  Federal financial assist-
ance.
  6.  Scope of audit The Single Audit Act
provides that:
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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 S25.000  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 these  entities  shall be
 made in accordance  with 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 pro-
vide this assurance the auditor must make a
study and evaluation of internal control sys-
tems  used in administering Federal assist-
ance  programs. The study and evaluation
must  be made whether or not  the  auditor
intends to place reliance  on such systems.
As 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 governments shall identify
in their accounts all Federal funds received
and  expended  and  the  programs  under
which they were received. This shall include
funds received directly from Federal  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 assistance
program. The selection and testing of trans-
actions shall be based on  the auditor's pro-
fessional judgment considering such factors
as the amount of expenditures  for the pro-
gram  and the individual  awards; the new-
ness of the program or changes in 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 those who received
  services  or benefits were eligible to receive
  them.
  (b) In addition to transaction testing, the
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 books
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 Port 31, App. A
          40 CFR Ch. I (7-1-88 Edition)
  and records from which the basic financial
  statements have been prepared, and
—Amounts  claimed  or used for matching
  were determined in accordance with OMB
  Circular A-87, "Cost principles for State
  and local  governments,"  and Attachment
  P  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 Federal
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-
ance and provide  $25,000 or more of it in a
fiscal 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 ar  audit;
  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.
  10. Relation to other audit  requirements.
The 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  Federal 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 may 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
                                         390

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 environmental Protection Agency
                       Part 31, App. A
  (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 actions 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 m&de by or for Federal agencies that
are m addition to the audits made pursuant
to this  Circular,  so  that  the  additional
audits build up such audits.
  (7) Oversee the  resolution of audit find-
ings that affect the programs of more than
one agency.
  12. Illegal  acts  or irregularities.  If the
auditor  becomes aware of  illegal acts or
other irregularities, prompt notice shall be
given  to recipient  management officials
above the level of involvement. (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:
—A statement of positive assurance with re-
  spect to those items tested for compliance.
  including compliance with law and regula-
  tions pertaining to financial reports and
  claims for advances and reimbursements:
—Negative  assurance  on those  items  not
  tested;
—A summary of all instances of noncompli-
  ance: and
—An  identification of total amounts ques-
  tioned, if any. for each Federal assistance
  award,  as a result of noncompliance.
  b. The  three parts of the audit report may
be bound into a single report, or presented
at the same time as separate documents.
  c. All fraud abuse, or illegal .acts or indica-
tions  of such acts, including all questioned
costs  found as the result of these acts that
auditors  become aware of, should normally
be covered  in a separate written report sub-
mitted in accordance with paragraph 13 f.
  d. In addition to the audit report,  the  re-
cipient shall provide comments on the find-
ings 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  S 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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 ran 31, App. A
          40 CFR Ch. I (7-1-88 Editioi
 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.
  IS.  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 Coats. The cost of audits made in
 accordance with the provisions of this Cir-
 cular are allowable charges  to  Federal as-
 sistance programs.
  a. The charges may be considered a direct
 cost or an  allocated  indirect cost,  deter-
 mined In  accordance  with  the provision of
 Circular  A-87. "Cost  principles for State
 and local governments."
  b.  Generally, the  percentage  of costs
 charged to Federal  assistance programs for
 a single audit shall  not exceed the percent-
 age that Federal funds expended represent
 of total  funds expended  by  the  recipient
 during the fiscal year. The percentage may
 be exceeded, however, if appropriate docu-
 mentation demonstrates higher actual cost.
  17. Sanctions. The Single Audit Act pro-
 vides that no cost may be charged to Feder-
 al assistance programs for audits required
 by the Act that are not made In accordance
 with this Circular. In 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
enter into  Intergovernmental  agreements
 for audit and other services, analysis should
 be made to determine whether it  would be
 more  economical to purchase the services
 from  private firms. In Instances where use
 of such intergovernmental agreements are
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
dlsadvantaged individuals  shall  have  th>
maximum  practicable  opportunity to par
ticipate in  contracts awarded to  fulfill  thi
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 years of State and local governments
that begin  after December 31. 1984. Earlier
Implementation  is  encouraged.   However.
until it is implemented, the audit provisions
                                        392

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 Environmental Protection Agency

 of  Attachment P to Circular A-102  shall
 continue to be observed.
  23. Inquiries.  All  questions or Inquiries
 should  be  addressed co 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  between $100.000
 and $100.000.000. means any  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
Total expenditures of Federal
financial assistance lor all programs

More (nan
$100 million . .
Si billion
S2 tMliion
S3 Mbon
S4 billion
$5 billion .
S6 billion
Over $7 Minn

But lesa man
Si billion
$2 billion
S3 billon
$4 billion
SS (Mlion
S6 billion
$7 billion

Maxx Federal
assistance program
means any program
mat exceeds
SSmillwn
$4 million.
$7 million
$10 million
SI 3 million
SI 6 million
SI 9 million
S20 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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APPENDIX F

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           APPENDIX F
 LIST OF EPA ASSISTANCE PROGRAMS
  (CFDA NUMBER, TITLE, STATUTORY
AUTHORITY, GIGS PROGRAM CODE, AND
 DELEGATION OF AUTHORITY NUMBER)

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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 Support
               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)

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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
          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

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CFDA
NO.
PROGRAM TITLE
     STATUTORY AUTHORITY
PROGRAM
CODE
DELEGATION OF
AUTHORITY NO.
66.502    Pesticides Control Research                          R
               Federal Insecticide, Fungicide, and
               Rodenticide Act: Sec. 20(a)

66.504    Solid Waste Disposal Research                        R
               Solid Waste Disposal Act: Sec. 8001

66.505    Water Pollution Control—Research, Development,      R
          Demonstration                                        S
               Clean Water Act: Sees. 104; 105; 107; 113

66.506    Safe Drinking Water Research and Demonstration       R
               Safe Drinking Water Act: Sees. 1442; 1444       S

66.507    Toxic Substances Research                            R
          Toxic Substances Control Act: Sec. 10

66.508    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)

66.600    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)

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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)

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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

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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)

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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                   1-75
          (NNEMS) Fellowship
               Clean Air Act: Sec. 103
               Clean Water Act: Sec. 104
               Safe Drinking Water Act: Sec. 1442
               Solid Waste Disposal Act: Sec. 8001

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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

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CFDA      PROGRAM TITLE
NO.            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)

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APPENDIX G

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          APPENDIX G
GUIDE: "DELEGATIONS OF AUTHORITY
  WHAT MANAGERS NEED TO KNOW"

-------
                            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 Limitations .... 4

Green Border
  Review Process	4

Conclusion           . 4
  This Guide is designed to give you an
  overview of EPA's delegations of
authority and to  discuss your
responsibility in 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 of 1
certification/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 lor 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 and
mission statements, operating guidance,
and strategic plans.
                                                                    Recy c le d/Recy c i a b !•
                                                                    Printed with Soy/Canoia :n« c" pac«' "iat
                                                                    contains ai least 50% ••cyciec' etc

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                    Delegations Sorted By Act
                                  555)
 3NON - STATUTORY
              10
                   20    30   40   50
                                           70   80   90    100
  'Other Acts: Includes delegations from acts with fewer than 15 delegations.
  Acts included are: PPA, EPCRA, IRAA, MPRSA, NCA. & OAPCA.

  'Multi-Act: Delegations use multiple statutory authorities and cannot be
  attributed to any one specific act.

  'Non-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
about delegation floors, the Agency now identifies a floor on
all 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  you-
      organization and your programs. In addition to tht
      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
                                                                                ffoul 0»l«g«tiont = 555.
    Ovwwn Director
                                     dMiuof 3 :0 9J
'Floors Lowest level to which a delegation can be redelegated, eg,
 Branch Chief, Division Director.
2Oth«rB Includes delegations with floors identified as On-Site
 Coordinators, National Program Managers, Senior Budget Officers.
 or Human Resources Officers.

FIGURE 3

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                                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 directty 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 lor
       efficiency and effectiveness.

    —  Decide whether or not to redetegate authority to tower levels
       based on areas of responsibility, the staffs technical expertise,
       and political judgment then delegate as dose as possible to
       where tie 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 fuM 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) Dslsgatses Af» Accountable — Regardtess of the level to
   which an action is redelegatad, you remain accountable for all
   decisions or actions taken by your redetogatees 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
                      (ToW O«lig«tton» - 555)
  No Limitations
         Notify
       Consult
      4 Concur
                                                    355
                  50    100   ISO   200    250    300    350    400
                            Number
  'No 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

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  Delegations with limitations an separated
  Into three types:

  D Notify requires the delegatee to inform another
     off kaal(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. Consul 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
     off teial(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
or operational 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	

r%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 Gets  it5
                 De i egateci  Author i ty

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APPENDIX H

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           APPENDIX H
40 CFR PART 33, "PROCUREMENT UNDER
     ASSISTANCE AGREEMENTS"

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substance In conducting any activity with
the grant.

[54 FR 4962. Jan. 31. 1989]
  PART 33—PROCUREMENT UNDER
      ASSISTANCE AGREEMENTS

Sec.
33.001  Applicability and scope of this part.
33.005  Definitions.

  Subport A—Procurement System Evaluation

33.105  Applicability and scope  of this sub-
    part.
33.110  Applicant  and  recipient certifica-
    tion.
33.115  Procurement system review.

    Subpart B—Procurement Requirements

33.205  Applicability and scope  of this sub-
    part.
33.210  Recipient responsibility.
33.211  Recipient reporting requirements.
33.220  Limitation  on subagreement award.
33.225  Violations.
33.230  Competition.
33.235  Profit.
33.240  Small, minority, women's, and labor
    surplus area businesses.
33.245  Privity of subagreement.
33.250  Documentation.
33.255  Specifications.
33.260  Intergovernmental agreements.
33.265  Bonding and Insurance.
33.270  Code of conduct.
33.275  Federal cost principles.
33.280  Payment to consultants.
33.285  Prohibited types of subagreements.
33.290  Cost and price considerations.
33.295  Subagreements awarded by a con-
    tractor.

            SMALL PURCHASES

33.305  Small purchase procurement.
33.310  Small purchase procedures.
33.315  Requirements for competition.

           FORMAL ADVERTISING

                advertising   procurement
                      and  solicitation  of
33.405  Formal
   method.
33.410  Public  notice
   bids.
33.415  Time for preparing bids.
33.420  Adequate bidding documents.
33.425  Public opening of bids.
33.430  Award to lowest, responsive, respon-
   sible bidder.

     * COMPETITIVE NEGOTIATION

33.505  Competitive   negotiation  procure-
   ment method.
33.510  Public notice.
33515  Evaluation of proposals
33 520  Negotiation and award of subagree-
   ment.
33.525  Optional selection procedure for ne-
   gotiation  and award of  subagreements
   for architectural and engineering serv-
   ices.

       NONCOMPETITIVE NEGOTIATION

33.605  Noncompetitive  negotiation  pro-
   curement method.

          Subpart C—[Reserved]

Subpart D—Retirements for  Institutions  of
    Higher Education and Other Nonprofit Or-
    ganizations

33.805  Applicability and scope  of this sub-
   part.
33.810  Nonapplicable        subagreement
   clauses.
33.815  Nonapplicable  procurement  provi-
   sions.
33.820  Additional  procurement   require-
   ments.

          Subpart E—[Reserved]

     Subpart F—Subagreement Provisions

33.1005 Applicability and scope of this sub-
   part.
33.1010 Requirements  for  subagreement
   clauses.
33.1015 Subagreement provisions clause.
33.1016 Labor  standards provisions.
33.1019 Patents,   data   and   copyrights
   clause.
33.1020 Violating facilities clause.
33.1021 Energy efficiency clause.
33.1030 Model subagreement clauses.

            Subpart G—Protests

33.1105 Applicability and scope of this sub-
    part.
33.1110 Recipient protest procedures.
33.1115 Protest appeal.
33.1120 Limitations on protest  appeals.
33.1125 Filing requirements.
33.1130 Review of protest appeals.
33.1140 Deferral of procurement action.
33.1145 Award official's review.
APPENDIX  A—PROCEDURAL   REQUIREMENTS
    FOR RECIPIENTS WHO Do NOT CERTIFY
    THEIR PROCUREMENT SYSTEMS. OR FOR
    RECIPIENTS WHO HAVE THEIR  PROCURE-
    MENT CERTIFICATIONS REVOKED BY EPA

  AUTHORITY: 7 U.S.C.  135 et seq.: 15 U.S.C.
2601 et seq.;  33 U.S.C. 1251 et seq.; 42 U.S.C.
241. 242b. 243. 246. 300J-1.  300J-2.  300J-3.
 1857 et seq..  6901 et seq.; and 42 U.S.C. 9601
et seq.
                                        391

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  SOURCE: 48 FR 12926. Mar. 28. 1983. unless
otherwise noted.

933.001  Applicability and scope  of this
    part.
  (a) This part applies to all assistance
agreements awarded on or  after the
effective date of this part. For assist-
ance agreements  awarded before the
effective date, this part will apply only
to those procurement actions initiated
by the recipient on or after  the date
the recipient complies with  the self-
certification requirements in  §33.110
of this part.
  (b) This part:
  (1)  Describes EPA's procurement
system evaluation process.
  (2) Identifies the minimum  require-
ments  for the procurement  of sup-
plies, services,  and construction under
EPA assistance agreements.
  (3) Identifies an additional specifica-
tion  requirement  for procurement
under assistance  agreements  for the
construction  of   treatment  works
awarded under 40 CFR Part 35, Sub-
parts E and I.
  (4)   Identifies   the  procurement
standards that institutions of higher
education and other nonprofit organi-
zations must follow.
  (5) Identifies the provisions that re-
cipients of EPA assistance agreements
must include in their subagreements.
  (6)  Describes the  procedures that
EPA will use to handle protest appeals
concerning the award  of  a  subagree-
ment by the recipient of  an EPA as-
sistance agreement.
  (c) This pan does not apply to work
beyond the scope of the project  for
which  an  assistance  agreement  is
awarded (i.e.. ineligible work).
  (d) This part does not apply to ex-
penses for services for which the recip-
ient will receive an allowance or a po-
tential  recipient  will  receive  an  ad-
vance of  an allowance under 40 CFR
Part 35. Subpart I.
  (e) This  part supplements the  re-
quirements in:
  (1) 40 CFR Part 30 "General Regula-
tion for Assistance Programs," and
  (2) 40  CFR  Part  32, "Debarments
and Suspensions  under  EPA Assist-
ance Programs."
  (f) The following types of recipients
must comply with the specified sub-
parts in this part:
  (1)  Recipients of assistance  agree-
ments for  the  construction of treat-
ment works awarded under  40 CFR
Part 35, Subparts E and I, must follow
the requirements in Subparts A. B. C.
F and G.
  (2) Recipients of remedial action co-
operative agreements under the Com-
prehensive Environmental  Response.
Compensation,  Liability  Act  of 1980
(Superfund  42  U.S.C.  6901  et seq.)
must follow the requirements in Sub-
parts A, B, E, F and G.
  (3)  State and local government re-
cipients for other than construction
grants and CERCLA remedial action
cooperative  agreements  must  follow
the requirements in Subparts A, B. F
andG.
  (4) Institutions of higher education.
hospitals, and other  nonprofit organi-
zations must follow the requirements
in Subparts A, B. D and G.
  (g) In the construction of treatment
works program  under the Clean Water
Act (33 U.S.C. 1251 et. seq.), it is EPA's
policy to delegate determinations on
individual projects to State agencies to
the  maximum extent possible (see  40
CFR Part 35.  Subpart F). This part
uses the  term "award official." To the
extent that the award  official for  a
treatment works assistance agreement
delegates responsibility  for determin-
ing compliance with the requirements
of this part (except for  § 33.115 "Pro-
curement system review," and Subpart
G "Protests") to a State agency under
a  delegation   agreement  (40  CFR
35.1130),  the   term  "award  official"
may be read "State agency."
  (h)  This  part applies to a  grant
awarded under 40 CFR Part 35 Sub-
part E only if the recipient elects to
follow the requirements in this part. If
the  recipient  of a  Subpart E grant
does not elect to follow the require-
ments in this part, it is subject to the
procurement requirements in 40 CFK
Subpart E.
[48 FR 12926. Mar.  28. 1983. 48 FR 30364.
July 1. 1983)
                                   392

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 833.005  Definitions.
  .  j  Words and  terms  not defined
 vJiow shall have the meaning given to
 them in 40 CFR Part 30 and Part 35.
  (b) As used in this part, the follow-
 ing words and terms mean:
  Architectural or engineering  (A/E)
 services. Consultation,  investigations;
 reports,  or   services  for  design-type
 nrojects within the scope of  the prac-
 tice of architecture or professional en-
 eineering as defined by the laws of the
 State or territory  in which the recipi-
 ent is located.
  Construction. Erection,  building, al-
 teration, remodeling, improvement, or
 extension of buildings, structures  or
 other property. Construction also in-
 cludes remedial actions  in  response to
 a release, or a threat of a release, of a
 hazardous substance into the environ-
 ment  as determined by the  Compre-
 hensive    Environmental   Response,
 Compensation,  and Liability Act  of
 1980.
  Contractor. Any  party to whom a re-
cipient awards a subagreement.
  Cost analysis. The review and eval-
 uation of each element of subagree-
 ment  cost to determine  reasonable-
 ness, allocability and allowability.
  Intergovernmental Agreement.  Any
 written  agreement between  units  of
 government  under which  one public
 agency performs duties for or in con-
cert with another  public agency using
EPA assistance. This includes substate
and interagency agreements.
  Minority business enterprise. A  mi-
nority business enterprise is a business
which is: (1)  Certified as socially and
economically disadvantaged   by  the
Small  Business  Administration.  (2)
certified as a minority business enter-
 prise by a State or Federal agency, or
 (3)  an independent business concern
 which is at least 51 percent owned and
 controlled    by    minority    group
 member(s). A minority group member
 is an individual who is a citizen of the
 United States and one  of  the follow-
 ing:
  Ci) Black American;
  (ii) Hispanic American (with origins
 from  Puerto Rico.  Mexico,  Cuba.
 South or Central America);
  
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women  who also control and  operate
it. Determination of whether a busi-
ness is at least 51 percent owned by a
woman  or women shall be made with-
out  regard  to  community property
laws. For example, an otherwise quali-
fied WBE which is 51 percent owned
by a married woman  in a community
property state will not be disqualified
because her husband has a 50 percent
interest in her share. Similarly, a busi-
ness which is  51 percent owned by a
married man and 49 percent owned by
an unmarried  woman will not become
a qualified WBE by virtue of his wife's
50 percent interest in his share of the
business.

   Subpart A—Procurement System
             Evaluation

§33.105  Applicability and  scope  of this
    subpart.
  (a) This subpart applies to all recipi-
ents of EPA assistance agreements.
  (b) For procurements involving EPA
funds,  recipients shall use their  own
procurement policies and procedures if
those policies and procedures reflect
applicable  Federal,  State, and local
laws and regulations, and at least meet
the  requirements set forth  in  this
part.
  (c) This subpart describes when EPA
will  review the recipient's  procure-
ment practices.

§33.110  Applicant and  recipient  certifica-
    tion.
  (a) It is the applicant's  and recipi-
ent's responsibility to evaluate its own
procurement system and to determine
whether its system meets the applica-
ble  requirements in this  part  (see
§ 33.001).
  (b) After evaluating its procurement
system, the applicant or recipient will
complete the "Procurement  System
Certification" (EPA  Form  5700-48).
The applicant or recipient will either
certify that:
  (1) Its system will meet the intent of
all the requirements  in  this  part
before  any procurement  action  with
EPA assistance is undertaken, or
  (2) Its current system does not meet
the intent  of the requirements of this
part and. therefore,  the applicant will
follow  the  requirements of  40  CFR
Part  33  and  allow  EPA  preaward
review of proposed  procurement  ac-
tions that will use EPA funds. The c.d-
ditional requirements for EPA  review
and approval are contained in Appen-
dix A to this part.
  (c) The applicant  must submit  the
signed certification  form with the as-
sistance application to the award offi-
cial.
  (d) The certification will be valid for
two  years or  for  the length  of  the
project period specified in the assist-
ance agreement, whichever is greater,
unless the  recipient substantially re-
vises  its  procurement system  or  the
award official determines that  the re-
cipient is not following the intent of
the  requirements  in this  part  (see
§33.115(b)). If  the recipient substan-
tially revises its procurement system,
the  recipient  must re-evaluate  its
system and  submit  a  revised  EPA
Form 5700-48.
  (e)  Even when a recipient certifies
its  procurement  system,   the  EPA
award official  retains  the  authority
stated in:
  (1)  Section   33.210(h) "Recipient's
procurement responsibilities,"  which
requires  the recipient to receive the
award official's prior written approval
if the recipient wants to use an inno-
vative procurement method.
  (2) Section 33.211 "Recipient report-
ing requirements," which requires the
award official  to  notify the Depart-
ment of Labor of certain construction
subagreement awards, and  obtain all
bid or offer tabulations,
  (3) Section  33.60S(d) "Noncompeti-
tive     negotiation     procurement
method," to authorize  a noncompeti-
tive award.
  (4)  Section  33.820(b)  "Additional
procurement requirements," which re-
quires the  award  official's  prior ap-
proval for a  sole source award  over
$10,000 by an institute of higher edu-
cation or other nonprofit organization,
  (5) Subpart G "Protests."

C48 FR 12926. Mar.  28, 1983; 48 FR 30364.
July  1. 1983, as amended at S3 FR 8077.
Mar. 11. 1988]

§ 33.115  Procurement system review.
   (a) EPA will not substitute its judg-
ment for that of  the recipient unless

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the matter is primarily a Federal con-
cern.
  (b) Even if a recipient has a certified
procurement system, EPA reserves the
right to review a recipient's procure-
ment system  or procurement action
ur.der an assistance agreement:
  (1) To determine if  the recipient  is
following the  procurement  require-
ments in this part; or
  (2) When there is sufficient reason
to believe that the recipient's system
may be  unacceptable based on:
  (i)  Information  concerning   the
review  or certification of the recipi-
ent's procurement  system or  actions
by other Federal agencies or Congress;
  (ii) Information from the recipient's
cognizant audit agency;
  (iii) Information from State agencies
and organizations independent of the
recipient's procurement activity;
  (iv) Recipient responses  to the pro-
curement system certification form;
  (v) Previous  EPA experience  with
the recipient; or
  (vi) Information from contractors or
prospective contractors.
  (c) If  the award official determines
that the recipient is not following the
procurement requirements it certified
it  would  follow,  the  award  official
shall revoke the recipient's  certifica-
tion and:
  (1) Require that the  recipient follow
the procurement requirements in this
part, including  Appendix A. for future
procurement actions and. if  appropri-
ate.
  (2) Apply the sanctions in 40 CFR
Part 30.
  (d) The recipient may recertify its
procurement system if  it shows  the
award official that it has corrected the
procurement deficiencies noted by the
award official,  and the award  official
accepts  the recertification.

      Subpart B—Procurement
            Requirements

§33.205  Applicability  and scope of this
    aubpart.
  This subpart contains:
  (a) The recipient's  and  EPA's re-
sponsibilities, and
  
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  (a)   Name,    address,   telephone
 number and  employee  identification
 number of  the construction  contrac-
 tor,
  (b) Amount of the award,
  (c) Estimated starting  and comple-
 tion dates,
  (d) Project number, name  and site
 location of the project, and
  (e) Copy of the tabulations of bids or
 offers and the name of each bidder or
 offerer.

 [43 FR 12926, Mar. 28,  1983; 48 FR 30364.
 July  1,1983]
§33.220  Limitation
    award.
of   subagreement
  (a) The recipient shall award suba-
greements only to responsible contrac-
tors that possess the potential ability
to  perform  successfully  under  the
terms  and conditions of a  proposed
procurement. A responsible contractor
Ls one that has:
  (1)  Financial   resources,   technical
qualifications,  experience,   organiza-
tion and facilities adequate to carry
out the  project,  or  a demonstrated
ability to obtain these;
  (2) Resources  to meet  the comple-
tion schedule contained in the suba-
greeznent;
  (3)   A   satisfactory  performance
record for  completion  of  subagree-
ments;
  (4) Accounting and  auditing proce-
dures  adequate  to control property,
funds and  assets, as  required in this
part and 40 CFR Part 30; and
  (5) Demonstrated compliance or will-
ingness to comply with the civil rights,
equal employment opportunity, labor
law and other statutory requirements
under 40 CFR Part 30.
  (b)  The  recipient  shall not make
awards to contractors who have been
suspended, debarred, or voluntarily ex-
cluded under 40 CFR Part 32 nor shall
it permit any portion of the work re-
quired by the subagreement to be per-
formed at  any facility listed on  the
EPA List of Violating Facilities (see 40
CFR Part 15).

§33.225 Violations.
  The  recipient  shall  refer violations
of law to the local, State or Federal
authority  with  jurisdiction  over  the
matter (see 40 CFR 30.610).
 [48 FR 12926. Mar  28. 1983. 48 FR 30364
 July 1. 1983]

 § 33.230  Competition.
  (a) The recipient shall conduct all
 procurement transactions in a manner
 that provides maximum open and free
 competition.
  (b) Procurement practices shall not
 unduly  restrict  or eliminate competi-
 tion. Examples of practices  considered
 to be unduly restrictive include:
  (1)  Noncompetitive  practices  be-
 tween firms;
  (2) Organizational conflicts of inter-
 est;
  (3)  Unnecessary   experience   and
 bonding requirements;
  (4)  State  or  local laws,  ordinances.
 regulations  or  procedures which  give
 local  or in-State bidders or proposers
 preference over other bidders or  pro-
 posers in evaluating bids or proposals;
 or
  (5)  Placing  unreasonable  require-
 ments on firms in order for them to
 qualify to do business.
  (c) The recipient may use  a prequali-
 fication list(s)  of persons, firms or
 products if it:
  (1) Updates its prequalified list(s) at
 least every six months;
  (2) Reviews and acts on each request
 for prequallfication made more  than
 30 days before the closing date for re-
ceipt of proposals or bid opening; and
  (3) Gives  adequate public notice of
 its  prequalification  procedure in ac-
cordance with the public notice proce-
dures in S  33.410 or § 33.510.
  (d)  A  recipient  may not  use a  pre-
 qualified list(s)  of persons or firms if
 the procedure  unnecessarily restricts
competition. However, this  restriction
 does not apply  to § 33.525  "Optional
selection  procedure  for negotiation
 and award of subagreements for archi-
 tectural and engineering services."

  EDITORIAL NOTE: For Class deviation docu-
 ments affecting  § 33.230.  see  the List of
 CFR Sections Affected in the Finding Aids
 section of this volume.

 §33.235  Profit.
  (a) Recipients must assure that only
 fair and reasonable profits are paid to
 contractors   awarded   subagreements
 under EPA assistance agreements.

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  (b)  The  recipient  shall  negotiate
profit as a separate element of price
for each subagreement in which there
is no price competition, or where price
is based on cost analysis.
  (c) Where the recipient receives two
or more bids, profit included in a for-
mally  advertised,  competitively  bid,
fixed price subagreement shall be con-
sidered reasonable.
  (d) Off-the-shelf or catalog supplies
are exempt from this section.

§33.240  Small, minority,  women's,  and
   labor surplus area businesses.
  (a) It is EPA policy to award a fair
share of subagreements  to  small, mi-
nority, and women's businesses. The
recipient must take affirmative steps
to assure that  small, minority, and
women's businesses are used when pos-
sible as sources  of supplies, construc-
tion and  services. Affirmative steps
shall include the following:
  (1) Including qualified small,  minori-
ty, and women's businesses on solicita-
tion lists;
  (2)  Assuring that  small,  minority,
and  women's  businesses are solicited
whenever they are potential sources;
  (3)   Dividing   total  requirements,
when economically feasible, into small
tasks or  quantities to  permit maxi-
mum participation of small, minority,
and women's businesses;
  (4)  Establishing  delivery schedules.
where the requirements of the work
permit, which will encourage  partici-
pation   by   small,   minority,   and
women's businesses;
   (5) Using the services and assistance
of the Small Business Administration
and the Office of Minority Business
Enterprise of the U.S. Department of
Commerce, as appropriate; and
   (6) If the  contractor awards suba-
greements. requiring the contractor to
take the  affirmative steps  in para-
 graphs (a) (1) through (5) of  this sec-
 tion.
   (b) [Reserved]
   (c)  EPA  encourages   recipients to
 procure  supplies  and  services  from
 labor surplus area firms.

 § 33.245  Privity of subaffreement.
   Neither EPA nor the United States
 shall be  a party  to any subagreement
nor to any solicitation  or  request f«r
proposals.

§ 33.2V"  Documentation.
  (?.) ?r. zurement records ?nd files for
procurements  in  excess  of  S 10.000
shall include the following:
  (1) Basis for contractor selection;
  (2) Written justification for selection
of the procurement method;
  (3)  Written justification for use cf
any specification which does not pro-
vide for maximum free and open corr.-
petition;
  (4) Written justification  for the type
of subagreement;
  (5)  Basis for award cost  or price, in-
cluding a copy of  the cost or price
analysis  made in  accordance  with
§ 33.290 and documentation of negotia-
tions; and
  (6) Written  justification for reject-
ing bids.
  (b) Recipients must state the rea-
sons  for rejecting any or  all bids and
the Justification for procurements on
a  noncompetitively negotiated basis
and make them available for public in-
spection.
  EDITORIAL NOTE: For Class deviation docu-
 ments affecting §33.250. see  the List  of
 CFR  Sections Affected in the Finding Aids
 section of this volume.

 § 33.255  Specifications.
   (a) Recipients  must incorporate  in
 their specifications a  clear and accu-
 rate description  of the technical  re-
 quirements for the material, product
 or service  to be procured. Such de-
 scription shall not. in  competitive pro-
 curements,  contain   features  which
 unduly restrict competition, unless the
 features are necessary to test or dem-
 onstrate a specific  thing  or to provide
 for  necessary interchangeability   of
 parts and equipment or to promote in-
 novative technologies. The  description
 shall include a statement 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.
    (b) The  recipient shall  avoid the use
  of detailed product specifications if at
  all possible.
                                     397

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  (c) When in the judgment of the re-
cipient it is impractical or uneconomi-
cal to  make  a clear and accurate  de-
scription  of   the  technical  require-
ments, recipients may use  a "brand
name or equal" description as a means
to define the  performance or other sa-
lient requirements of a procurement.
The recipient need not establish the
existence of any source other than the
named brand. Recipients must clearly
state in the  specification the salient
requirements  of  the  named  brand
which  must be met by offerors. (An
additional  specification  requirement
for recipients of assistance for the con-
struction of treatment works under 40
CFR Part 35, Subparts E and I is con-
tained in §33.710.)

§ 33.260  Intergovernmental agreements.
  (a) To  foster greater economy and
efficiency, EPA encourages recipients
to enter into  State and local intergov-
ernmental  agreements  for  common
procurement or use of goods and serv-
ices.
  (b)   Although    intergovermental
agreements are not subject to the re-
quirements in this  part, all  procure-
ments under intergovernmental agree-
ments are subject to the requirements
in this part except for procurements
that are:
  (1) Incidental to  the  purpose of the
assistance agreement, and
  (2) Made through a central public
procurement unit.

§ 33.265  Bonding and insurance.
  (a) These  requirements apply only
to recipients  and contractors with su-
bagreements for construction.
  (1) For  construction  subagreements
of $100,000 or less, the recipient shall
follow its own requirements relating to
bid  guarantees, performance  bonds
and payment bonds.
  (2) For  those subagreements  more
than $100.000, the award official may
accept the recipient's  bonding policy
and requirements provided the award
official makes a determination that
the Federal Government's interest is
adequately protected. If the award of-
flcial does not make that determina-
tion, the  minimum bonding require-
ments for subagreements more than
$100,000 are:
  u) A   bid guarantee"  from  each
bidder  equivalent to  five percent of
the bid price.  The  'bid guarantee'
shall Consist of a firm  commitment
auch as  a bid bond, certified check or
other negotiable instrument accompa-
nying a bid as assurance  that the
bidder  will,  upon acceptance  of the
bid.  execute such contractual dxu-
ments as the EPA recipient may re-
quire within the time specified.
  (ii) A  "performance  bond" for 100
percent  of the  subagreement price. A
"performance bond"  is one that the
contractor executes in connection with
a subagreement to secure fulfillment
of all its obligations under such  suba-
greement.
  (iii) A "payment bond" for 100 per
cent of the subagreement price.  A
"payment  bond" is one that the con-
tractor executes in connection with  a
subagreement to assure payment as re-
quired by law, to all persons supplying
labor and material in the execution of
the work provided for in the subagree-
ment.
  (3) Where bonds are required in the
situations described above, bidders and
contractors  shall obtain  them  from
companies holding certificaties of au-
thority as acceptable sureties (31 CFR
Part 223).
  (b) Recipients and  contractors must
follow the flood hazard  area require-
ments of  the  Flood Disaster  Protec-
tion Act of  1973 contained in 40 CFR
Pan 30.

§ 33.270  Code of conduct
  (a) Recipients shall maintain a writ-
ten  code  or  standards  of conduct
which shall  govern the performance of
its  officers,  employees, or agents en-
gaged in the award and administration
of subagreements supported by  EPA
funds. No employee,  officer or  agent
of  the  recipient shall  participate  in
the selection, award or administration
of a subagreement supported by EPA
funds if a conflict of interest, real or
apparent, would be involved.
  (b) Such a conflict would arise when:
  (1) Any employee, officer or agent of
the recipient, any member of their im-
mediate families,  or  their partners
have a  financial or  other interest in
the firm selected for award, or

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  (2)  An  organization which  may  re-
ceive  or has been awarded a subagree-
ment employs, or is about to employ.
any person under paragraph (b)(l) of
this section.
  (c) The recipient's  officers, employ-
ees or agents shall neither solicit nor
accept gratuities, favors or anything of
monetary value from contractors, po-
tential contractors or other parties to
subagreements.
  (d)  Recipients may  set minimum
rules  where  the financial interest  is
not substantial or the gift is an unso-
licited item of nominal intrinsic value.
  (e) To the extent permitted by State
or local law or regulations, the recipi-
ent's code of conduct shall provide for
penalties, sanctions  or other discipli-
nary actions for violations of the code
by the recipient's officers,  employees
or agents or by contractors or their
agents.

§ 33.275  Federal cost principles.
  The  following cost principles apply
to assistance agreements and suba-
greements:
  (a)  State  and  local   governments
must comply with OMB Circular A-87
to determine allowable costs.
  (b)  Educational  institutions must
comply with OMB Circular A-21 to de-
termine allowable costs and with OMB
Circular A-88 for indirect  cost rates.
  (c)   Nonprofit  institutions  must
comply with OMB Circular A-122 to
determine allowable costs.
  (d) All other recipients, contractors
and subcontractors must  comply with
the cost  principles  contained in the
Federal Procurement Regulations (41
CFR  1-15.2  and.  if  appropriate,  § 1-
15.4) to determine allowable costs.

§ 33.280  Payment to consultants.
  (a)  For  all EPA  assistance agree-
ments, EPA will limit its  participation
in the salary rate (excluding overhead)
paid to individual consultants retained
by recipients or by  a recipient's con-
tractors or subcontractors to the maxi-
mum daily rate for  a GS-18. (Recipi-
ents  may, however, pay consultants
more than this amount.) This limita-
tion applies to consultation services of
designated individuals with specialized
skills who are paid at a daily or hourly
rate. This rate does not include trans-
portation  and  subsistence  costs  for
travel  performed: recipients will pay
these in accordance with their normal
travel reimbursement practices.
  (b)  Subagreements with  firms  for
services which are awarded using the
procurement requirements in this part
are not affected by this limitation.

[48 FR 12926. Mar. 28. 1983: 48 FR 30364.
July 1, 1983]

§ 33.285  Prohibited types   of  subagree-
  The     cost-plus-percentage-of-cost
(e.g.,  a   multiplier  which  includes
profit) and the percentage-of-construc-
tion-cost types of subagreements shall
not be used.

§ 33.290  Cost and price considerations.
  (a)  The recipient  shall conduct  a
cost analysis of  all negotiated change
orders and  all  negotiated subagree-
ments estimated to exceed $10.000.
  (b)  The recipient  shall conduct  a
price  analysis of  all formally adver-
tised   procurements   estimated   to
exceed $10,000 if there are fewer than
three bidders.
  (c) For negotiated procurement, con-
tractors   and   subcontractors  shall
submit cost or pricing data in support
of their proposals to the recipient.

§ 33.295  Subagreements awarded by a con-
    tractor.
  A contractor must  comply with the
following provisions in its award of su-
bagreements.  (This section  does  not
apply to  a  supplier's procurement of
materials to produce equipment, mate-
rials  and  catalog,   off-the-shelf,  or
manufactured items.)
  (a) 40 CFR Part 32 (Debarment and
Suspension   Under   EPA  Assistance
Programs);
  (b) The limitations  on subagreement
award in § 33.220(a) (1) through (5);
  (c)  The   profit  requirements  in
§ 33.235;
  (d)  The requirements for small, mi-
nority, women's and labor surplus area
businesses in S 33.240;
  (e) The specification requirements of
§ 33.255;
  (f)  The requirements of Subpart  C
of this part, if appropriate:
                                    399

-------
  (g) The  Federal  cost  principles in
§ 33.275;
  (h) The  prohibited  types of suba-
greements in § 33.285:
  (i) The cost and price considerations
in § 33.290, and
  (j) The applicable subagreement pro-
visions in Subpart F of this part.

          SMALL PURCHASES

§ 33.305  Small purchase procurement.
  If  the aggregate amount involved in
any one procurement transaction does
not exceed $10,000, including estimat-
ed handling and freight charges, over-
head and profit, the recipient may use
small purchase procedures.
  EDITORIAL NOTE: For Class  deviation docu-
ments affecting S 33.305. see the  List of
CFR Sections Affected in the Finding Aids
section of this volume.

§ 33.310  Small purchase procedures.
  Small purchase procedures are rela-
tively  simple procurement  methods
that are sound and appropriate for a
procurement of services, supplies  or
other property costing in the aggre-
gate not more than  $10,000.
  EDITORIAL NOTE: For Class  deviation docu-
ments affecting 933.310. see the  List of
CFR Sections Affected in the Finding Aids
section of this volume.

§ 33.315  Requirements for competition.
  (a) Recipients shall not divide a pro-
curement into smaller parts to avoid
the  dollar  limitation for competitive
procurement.
  (b) Recipients shall  obtain price or
rate quotations  from  an adequate
number of qualified sources.

        FORMAL ADVERTISING

§33.405  Formal advertising  procurement
   method.
  (a) The  requirements  in §533.405
through 33.430 apply  to all formally
advertised subagreements in excess of
$10.000. Formal advertising means the
public solicitation of sealed bids  and
the award of a subagreement based on
a fixed price (lump sum, unit price, or
a  combination of  the  two)  to  the
lowest, responsive, responsible bidder.
  (b) Forma) advertising requires at a
minimum:
  (DA complete, adequate and realis-
tic specification or purchase  descrip-
tion of what is required;
  (2) Two or more responsible bidders
which are willing and able to compete
effectively for the recipient's business:
  (3) A  procurement that  lends itself
to the award of a fixed-price subagree-
ment; and
  (4) That the selection of the success-
ful bidder be made principally on the
basis of price.

§33.410  Public notice and solicitation of
   bids.
  The  recipient  shall give  adequate
public notice of the solicitation, invit-
ing bids and stating when and how the
bidding documents may be obtained or
examined.

§ 33.415  Time for preparing bids.
  The recipient must  allow  adequate
time  between  the  date  the public
notice is first published  and the date
by which bids must be submitted.

§ 33.420  Adequate bidding documents.
  Recipient's bidding documents  shall
Include:
  (a) A complete statement of work to
be performed including,  where appro-
priate, design drawings and  specifica-
tions  and the required performance
schedule;
  (b) The terms and conditions of the
subagreement to be awarded, includ-
ing payment, delivery schedules, point
of delivery and acceptance criteria;
  (c) A clear explanation of the recipi-
ent's  method  of  bidding  and  the
method of evaluating bid prices, and
its basis and method for awarding the
subagreement;
  (d) Any other responsibility require-
ments or evaluation criteria which the
recipient  will  use in  evaluating  bid-
ders;
  (e) The prevailing  wage determina-
tion, made under the Davis-Bacon Act,
If applicable; and
  (f) The  deadline and place  to submit
bids and a copy of § 33.295. Subparts F
and G and. if appropriate. EPA Form
5720-4 "Labor Standard  Provisions for
Federally Assisted Construction Con-
tracts."

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[48 FR 12926. Mar 28. 1983. 48 FR 30364.
July 1. 19831

§ 33.425  Public opening of bids.
  The  recipient  shall  publicly  open
bids  at the place, date and time an-
nounced in the bidding documents.

§33.430  Award to the lowest, responsive,
   responsible bidder.
  (a) The recipient shall evaluate  all
bids  in accordance with the methods
and criteria in the bidding documents.
  (b)  The  recipient shall  award  a
fixed-price   subagreement  to   the
lowest,  responsive, responsible  bidder.
Where  specified  in the bidding docu-
ments, recipients shall consider factors
such as discounts, transportation costs
and life cycle costs to  determine the
low bid. Payments discounts may be
used to determine the  low bid only
when prior experience of the recipient
indicates that it generally accepts such
discounts.
  (c) The  recipient may reject  all bids
only when  it has sound, documented
business reasons  which  are in the best
interest of the program for which EPA
assistance   is awarded  (see   § 33.250
"Documentation").

       COMPETITIVE NEGOTIATION

§33.505 Competitive negotiation  procure-
    ment method.
  (a)  The  requirements  in §§33.505
through 33.525 apply to all competi-
tively   negotiated  subagreements  in
excess of $10,000.
  (b)  Recipients  may use competitive
negotiation only if conditions  are not
appropriate for the use of the formal
advertising method  of  procurement
(see § 33.405).

§33.510 Public notice.
  (a) The recipient must give adequate
 public  notice for competitively negoti-
 ated procurements.
  (b) The notice of a request  for pro-
 posals must state how to obtain associ-
 ated  documents, including a  copy of
 § 33.295, Subparts F and  G, the basis
 for subagreement award, and, if appro-
 priate,  EPA  Form   5720-4  "Labor
 Standard Provisions for Federally As-
 sisted Construction Contracts."
  (c) Requests  for proposals must,  be
written, contain  enough  information
to enable a prospective offeror to pre-
pare a proposal, contain all evaluation
criteria and  the  relative importance
attached to each, and clearly state the
deadline and place to submit propos-
als.

[48 FR 12926.  Mar. 28.  1983, 48 FR 30364.
July 1. 1983]

§33.515  Evaluation of proposals.
  (a)  Recipients  must uniformly and
objectively evaluate  all proposals sub-
mitted in response to the request  for
proposals.
  (b) Recipients must base their deter-
minations of qualified offerers and ac-
ceptable proposals solely on the eval-
uation criteria stated in the  request
for proposals.

§33.520 Negotiation and  award  of  sub-
   agreement.
  (a)  Unless  the  request for proposals
states that award may be based on  ini-
tial  offers alone, the recipient must
conduct meaningful negotiations with
the best qualified offerers with accept-
able proposals within the competitive
range, and permit revisions to obtain
best and final offers. The  best quali-
fied offerors must have equal opportu-
nities to negotiate or revise their pro-
posals. During negotiations, the recipi-
ent must not disclose the indentity of
competing offerers or any information
from competing proposals.
   (b) The recipient  must  award  the
subagreement  to the responsible  of-
feror whose  proposal is determined in
writing to be  the most advantageous
to the recipient, taking into consider-
ation price and other evaluation crite-
ria set forth in the request  for propos-
als.
   (c)  The  recipient  must  promptly
notify unsuccessful offerors that their
proposals were rejected.
   (d) The recipient must document its
procurement file to  indicate how pro-
 posals were  evaluated,  what  factors
were used to determine the best quali-
 fied  offerors  within the competitive
 range, and what factors were used to
 determine the subagreement award
 [48 FR 12926. Mar. 28. 1983. 48 FR 30364.
 July 1. 1983)
                                     401

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 33.525  Optional  selection procedure Tor
   negotiation  and  award of  subagrec-
   ments for architectural and engineer-
   ing services.
 (a) The recipient may evaluate and
 ?lect an architect or engineer  using
 ne procedures in this section in place
 f the procedures in § 33.520, "Negoti-
 tion and award of subagreement."
 (b) The recipient may use either a
 requalified  list  developed  in accord-
 nee  with § 33.230(c) or responses to
 ^quests  for  statement of  qualifica-
 ons to determine the most technical-
 / qualified architects or engineers.
 (c)  After selecting and ranking the
 lost qualified architects or engineers,
 ie  recipient  will  request  technical
 roposals from those  architects or en-
 ineers and inform them of the eval-
 ation criteria the recipient will use to
 ink the proposals.
 (d)  The recipient shall then select
 nd  determine, in  writing,  the  best
 jchnical proposal.
 (e) After selecting the  best proposal.
 'ie recipient shall attempt to negoti-
 te fair and  reasonable  compensation
 •ith that offerer.
 (f) If the recipient and the offerer of
 ic best proposal cannot agree on the
 mount of compensation, the recipient
 nail  formally terminate negotiations
 ith that offerer. The  recipient shall
 Hen  negotiate with the offerer with
 hie next best  proposal. This  process
'ill   continue  until   the   recipient
 caches  agreement on  compensation
rith  an offerer with  an acceptable
 roposal.  Once the  recipient  termi-
 ates negotiations with an offerer, the
ecipient cannot go back and renegoti-
 te with that offerer.

 18 FR 12926,  Mar. 28. 1983; 48 FR  30364.
 uly 1. 19831

   NONCOMPETITIVE NEGOTIATION

 33.605 Noncompetitive negotiation pro-
  curement method.
 Recipients  may use noncompetitive
negotiation to award a  subagreement
f the other three procurement meth-
 ds are inappropriate because:
 (a) The item is available only from a
ingle source;
 (b)  A public exigency  or emergency
 xists and the urgency for the require-
ment will not permit a delay incident
to competitive procurement;
  (c) After solicitation from a number
of sources, competition is inadequate-
or
  (d) The EPA award official author-
izes  noncompetitive negotiation, sub-
ject to the limitation in § 33.715(a)(2).

       Subpart C—[Reserved]

Subpart D—Requirements  for Institu-
    tion*  of  Higher  Education and
    Other Nonprofit Organizations

§33.805  Applicability and scope of this
   subpart.

  Recipients  who  are subject to the
provisions  of OMB Circular A-110.
"Grants and Agreements with Institu-
tions of Higher Education. Hospitals,
and  Other Nonprofit Organizations"
are not subject  to all of  the require-
ments in this part.
§ 33.810  Nonapplicable
   clauses.
subagreement
  The following clauses in Subpart F
of this  part  do not apply to  institu-
tions  of higher education and other
nonprofit organizations:
  (a) Energy efficiency (§ 33.1021):
  (b) Changes (§33.1030.3);
  (c)    Differing    site   conditions
(§33.1030,4); and
  (d) Price reduction for defective cost
or pricing data (§ 33.1030,8).

[48 FR 12926.  Mar. 28. 1983; 48 FR 30365.
July 1. 1983]

§33.815  Nonapplicable procurement  pro-
   visions.
  The  following procurement  provi-
sions  do not apply  to  institutions of
higher education and other nonprofit
organizations:
  (a) Subparts C and E;
  (b)  Sections  33.405  through  33.430
'' Formal advertising;"
  (c)  Sections  33.505  through  33.525
"Competitive negotiation;"
  (d)  Section 33.605 "Noncompetitive
negotiation" (see § 33.820:
  (e)  The  requirement in  § 33.270(a)
"Code of conduct" to  have a  written
code of conduct;

-------
  (f) The provisions of § 33.240 "Small.
minority,  women's, and labor surplus
area businesses" which:
  (1)  Encourage the  award of a fair
share  of  contracts  to  women's and
labor surplus area businesses;
  (2)  Require the  specific affirmative
action steps  in § 33.240(a)(l) through
(a)(6); however,  nonprofit  organiza-
tions  are required to make positive ef-
forts  to use  small businesses and mi-
nority owned businesses as sources  of
supplies and services;
  (g) Subpart G "Protests."

§33.820  Additional  procurement require-
   ments.
  (a) Recipients must exclude contrac-
tors  that  develop or draft specifica-
tions,  requirements, statements  of
work, invitation for bids, or requests
for proposals  from competing for
awards resulting from the prior effort.
  (b) For all proposed sole source sub-
agreements and where only one bid  or
proposal  is  received,  the  recipient
must  request the award  official's prior
approval to award the subagreement if
the aggregate expenditure is expected
to exceed $10,000.

       Subpart E—[Rosorved]

Subpart F—Subagre«mont Provisions

§33.1005 Applicability and scope of this
   subpart
  (a) This subpart applies to all  EPA
recipients  and describes the minimum
content of each subagreement (con-
tract and subcontract).
  (b) Nothing in this subpart prohibits
a recipient from requiring more assur-
ances, guarantees, or  indemnity  or
other contractural requirements from
any party  to a subagreement.

§33.1010 Requirements for  subagreement
   clauses.
  Recipients shall include clauses that
meet  the  requirements of  §$33.1015
through 33.1021, and the appropriate
clauses in §33.1030, in  each procure-
ment subagreement.
§33.1015  Subagreement provisions clause.
  Each  subagreement  must  include
provisions defining  a sound and com-
plete agreement, including the:
  (a)  Nature,  scope, and  extent  of
work to be performed;
  (b) Timeframe for performance;
  (c) Total cost  of the subagreement:
and
  (d) Payment provisions.

§ 33.1016  Labor standards provisions.
  (This clause applies only when re-
quired by statute.) Recipients shall in-
clude a  copy of EPA Form  5720-4
"Labor Standards Provisions for Fed-
erally  Assisted  Construction  Con-
tracts" in each subagreement for con-
struction (as defined by the Secretary
of Labor).  The form contains the
Davis-Bacon   Act   requirements  (40
U.S.C. 276a—276a-7); the  Copeland
Regulations (29 CFR Part 3); the Con-
tract  Work  Hours and Safety  Stand-
ards  Act—Overtime   Compensation
(940 U.S.C.  327-333) and the nondis-
criminatlon  provisions in  Executive
Order 11246, as amended.
[48 FR 12926. Mar. 28. 1983; 48 FR 30365.
July 1.19831

§33.1019  Patents  data and  copyrights
   clause.
  Except for construction  grant sub-
agreements, all subagreements shall
include  notice of EPA  requirements
and regulations pertaining  to  report-
ing and patent rights under any suba-
greement involving research, develop-
mental,  experimental or demonstra-
tion work with respect to any  discov-
ery or invention which arises or is de-
veloped in the conduct of work under
a subagreement. This notice shall also
include EPA requirements and  regula-
tions  pertaining to copyrights and
rights in data contained in 40  CFR
Part 30.

§ 33.1020  Violating facilities clause.
  Subagreements in excess of $100,000
shall  contain a provision  which  re-
quires contractor compliance with  all
applicable  standards, orders  or  re-
quirements issued under section 306 of
the Clean Air Act (42 U.S.C. 1857(h)).
section 508 of the Clean Water  Act (33
U.S.C. 1368).  Executive Order  11738.

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and EPA regulations (40 CFR Part 15)
which  prohibit the use under nonex-
empt  Federal  contracts,  grants  or
loans of facilities included on the EPA
List of Violating Facilities.

§33.1021  [Reserved]

§ 33.1030  Model subagreement clauses.
  Recipients must  include,  when  ap-
propriate,  the  following clauses  or
their  equivalent  in   each  subagree-
ment. Recipients  may  substitute other
terms for "recipient and" "contractor"
in their subagreements.

             1. SUPERSESSION
  The  recipient  and the contractor agree
that this and other appropriate clauses in
40 CFR 33.1030 apply to  that work eligible
for EPA assistance  to be performed  under
this subagreement  and that these clauses
supersede any conflicting provisions of this
subagreement.

        2. PRIVITY OF SUBAGREEMENT
  This  subagreement is  expected to  be
funded in part with funds from the U.S. En-
vironmental Protection Agency. Neither the
United States nor any of its departments,
agencies or employees is,  or will be. a party
to this subagreement or any lower tier sub-
agreement. This subagreement is subject to
regulations contained in 40 CFR Part 33 In
effect on the date  of the assistance  award
for this project.

         3. SUSPENSION or WORK
  The following clause applies only to con-
struction svbayreements.  (a) The recipient
may order the contractor in writing to sus-
pend, delay  or interrupt  all or any part of
the work for such period of time as the re-
cipient may  determine to  be appropriate for
the convenience of the recipient.
  (b) If the  performance  of all or any part
of the work is suspended, delayed or inter-
rupted  for an unreasonable period of time
by an act of the recipient in administration
of this  subagreement, or by the recipient's
failure  to act within the time specified in
this subagreement (or if no time Is specified.
within  a reasonable time),  the  recipient
shall make an adjustment for any increase
in the cost of performance of this subagree-
ment (excluding  profit)  necessarily caused
by such unreasonable suspension, delay or
interruption and modify  the subagreement
in writing. However, no adjustment shall be
made under this  clause for any suspension.
delay or interruption to  the extent (1) that
performance would have  been so suspended.
delayed or Interrupted by any other cause.
including the fault  or negligence of the con-
tractor, or (2) for which an equitable adjusi-
ment is provided for or excluded under an>
other provision of this subagreement.
  (c) No claim under this clause shall be al-
lowed (1) for any costs incurred more thar
20 days before the contractor notified the
recipient in writing of the act. or failure to
act.  involved  (this requirement does not
apply to a claim resulting from a suspension
order), and (2) unless the amount claimed is
asserted in writing as soon as practicable
after the  termination of such suspension,
delay or interruption, but not later than the
date of final  payment under the subagree-
ment.

             4. TERMINATION

  (a) This subagreement may be terminated
in whole  or  in  part  in  writing by  either
party in the event of substantial failure by
the other party  to fulfill  its obligations
under  this subagreement through  no fault
of the  terminating  party, provided that no
termination  may  be  effected unless the
other party  is given (1) not less than ten
(10) calendar days' written notice (delivered
by certified mail, return receipt requested)
of Intent to terminate, and (2) an opportuni-
ty for consultation with the  terminating
party prior to termination.
  (b) This subagreement may be terminated
in whole or in part in writing by the recipi-
ent for its convenience,  provided that the
contractor is given (1) not less  than ten (10)
calendar days' written notice  (delivered by
certified mail, return receipt requested)  of
intent  to terminate, and (2) an opportune
for consultation with the terminating part>
prior to termination.
  (c) If termination for default is effected
by the recipient, an equitable adjustment m
the price provided for in this subagreement
shall be made, but (1) no amount shall be al-
lowed for anticipated profit on unperformed
services or other work, and (2) any  payment
due to the contractor at the time of termi-
nation may  be adjusted  to cover any addi-
tional  costs to the  recipient because of the
contractor's default. If  termination for de-
fault is effected by the contractor,  or if ter-
mination for convenience is effected by the
recipient,  the equitable adjustment shall in-
clude  a  reasonable profit  for services  or
other  work performed.  The  equitable  ad
justment for any termination shall provide
for payment to the contractor for services
rendered and expenses incurred prior to the
termination,  in addition  to termination set-
tlement costs reasonably  incurred by the
contractor relating to commitments  which
had become firm prior to the termination
  (d) Upon receipt of a termination action
under paragraphs (a) or (b) above, the con
tractor shall (1) promptly discontinue all  af-
fected work (unless the notice directs other-
wise),  and (2) deliver  or  otherwise make

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available to the recipient all data, drawings.
specifications, reports, estimates, summaries
and  such  other  information and materials
as may have  been accumulated by the con-
tractor in performing this subagreement.
whether completed or in process.
  (e)  Upon termination  under paragraphs
(a) or (b) above, the recipient may take over
the work  and may award another party a
subagreement to  complete  the work under
this subagreement.
  (f) If. after termination for failure of the
contractor to fulfill contractual obligations,
it is determined that the contractor had not
failed to fulfill contractual obligations, the
termination shall be deemed to have been
for the convenience of the recipient. In such-
event, adjustment of  the subagreement
price shall be made as  provided  in  para-
graph (c) of this clause.

               5. REMEDIES
  Unless otherwise provided  In  this  sub-
agreement, all claims, counter-claims, dis-
putes  and other matters  In  question be-
tween the recipient and the contractor aris-
ing out of. or relating to. this subagreement
or the breach of  it will be  decided by arbi-
tration If the parties mutually  agree, or in a
court of competent jurisdiction within the
State in which the recipient is located.

       6.  AUDIT: ACCESS TO RECORDS

  (a) The  contractor shall  maintain books.
records, documents and  other evidence di-
rectly  pertinent  to  performance  on  EPA
funded work under this subagreement in ac-
cordance with generally  accepted account-
ing principles and practices consistently ap-
plied, and 40 CFR Part 30  in  effect on the
date of execution of this subagreement. The
contractor shall also maintain the financial
information and data used in the prepara-
tion  or support  of the cost submission re-
quired under 40 CFR 33.290 for any negoti-
ated subagreement or  change  order and a
copy of the cost summary submitted to the
recipient.  The United States Environmental
Protection Agency, the Comptroller Gener-
al of the  United States, the United States
Department  of  Labor, the recipient, and
(the State) or any of their authorized repre-
sentatives  shall  have access  to  all  such
books, records, documents  and other evi-
dence for the purpose of inspection, audit
and  copying  during normal business hours.
The contractor will provide proper facilities
for such access and inspection.
  (b) If this  is a formally  advertised, com-
petitively   awarded,  fixed  price subagree-
ment. the contractor agrees to make para-
graphs (a) through (g) of this clause appli-
cable  to all  negotiated change orders and
subagreement  amendments  affecting  the
subagreement price. In the case of all other
types of prime subagreements. the contrac-
tor agrees to make  paragraphs (a) through
(g) applicable  to  all  subagreements  he
awards in excess of  $10.000. at any tier, and
to make  paragraphs (a) through (g} of this
clause applicable to  all change orders direct-
ly related to project performance.
  (c) Audits conducted under this provision
shall be  in accordance with generally  ac-
cepted  auditing  uandards and  with estab-
lished procedures and guidelines of the re-
viewing or audit agency(ies).
  (d) The contractor  agrees  to disclose all
information  and  reports  resulting  from
access to record- under paragraphs (a) and
(b) of this clause to any of the  agencies re-
ferred to in paragraph (a).
  (e) Records under paragraphs (a) and (b)
above shall be maintained by the contractor
during perform? ice on EPA assisted work
under this subagreement and for  the time
periods specified in  40 CFR Part 30. In addi-
tion, those records which relate to any con-
troversy  arising under  an EPA  assistance
agreement,  litigation,  the   settlement  of
claims arising out of such performance or to
costs or  items to which an audit exception
has been taken shall  be maintained by  the
contractor for the time periods specified in
40 CFR Part 30.
  (f) Access to records is not limited to the
required retention  periods. The authorized
representatives designated in paragraph (a)
of this clause shall have access to records at
any reasonable  time for as long as  the
records are maintained.
  (g) This right of access clause applies to fi-
nancial records  pertaining to all subagree-
ments (except formally advertised, competi-
tively awarded,  fixed price  subagreements)
and all subagreement change orders regard-
less of the type of subagreement. and  all
subagreement  amendments  regardless  of
the type of subagreement. In addition this
right of access applies to all  records pertain-
ing to  all subagreements.  subagreement
change  orders and subagreement amend-
ments:
  (1) To the extent the records pertain  di-
rectly to subagreement performance:
  (2) If there is any  indication that fraud.
gross abuse or corrupt  practices may  be in-
volved; or
  (3) If the subagreement is terminated for
default or for convenience.

    7. COVENANT AGAINST CONTINGENT FEES

  The  contractor assures that no person or
selling  agency has been employed or  re-
tained to solicit or secure this subagreement
upon an agreement or  understanding for a
commission, percentage, brokerage or con-
tingent  fee excepting bona fide  employees
or bona  fide established commercial or sell-
ing agencies maintained by the  contractor
for the  purpose of securing business.  For
breach or violation of this assurance, the re-

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cipient shall have the right  to  annul this
agreement without habile or. at its discre-
tion, to deduct from the c 'bagreement price
or consideration, or otherwise recover the
full amount of  such concussion, percent-
age, brokerage or contingent fee.

              8. GRATUITIES

  (a) If the recipient find:,  after a notice and
hearing that the contractor or any of the
contractor's  agents  or  representatives  of-
fered  or gave gratuities tin the  form of en-
tertainment, gifts or otherwise) to any offi-
cial, employee or agent cf  the recipient, the
State  or EPA in  an attempt to secure a sub-
agreement or favorable treatment in award-
ing, amending or making any  determina-
tions  related to the performance of this su-
bagreement.  the recipient may.  by written
notice to the contractor, terminate this sub-
agreement. The  recipient  may also pursue
other rights and remedies thai  the law  or
this subagreement  provides.  However, the
existence of the facts on -  .iich the recipient
bases  such  findings shaii be in  issue and
may be reviewed in proceedings under the
Remedies clause  of this srt agreement.
  (b) In the event this su. agreement Is ter-
minated as  provided in -  .ragraph (a), the
recipient  may pursue tue same  remedies
against the contractor as >t could pursue In
the event of a breach of the subagreement
by the contractor, and as a penalty, in addi-
tion to any  other damages to which it may
be entitled by law. be entitled to exemplary
damages In an amount (a* determined  by
the recipient) which shall be not  less than
three nor more than ten times the costs the
contractor incurs in providing any such gra-
tuities to any such officer  ir employee.

    9. Responsibility of the Contractor

  (a)  The following clause applies only to
subagreements for services. (1) The contrac-
tor is responsible for the  professional qual-
ity, technical accuracy, timely  completion
and coordination of all designs,  drawings.
specifications, reports  and other services
furnished by the contractor under this sub-
agreement. If the subagreement involves en-
vironmental measurements or data genera-
tion,  the  contractor shall  comply with EPA
quality assurance requirements in 40 CFR
30.503. The  contractor shall, without addi-
tional compensation, correct or  revise  any
errors, omissions or other deficiencies in  his
designs,   drawings,  specifications, reports
and other services.
  (2)  The contractor shall perform the pro-
fessional  services necessary  to  accomplish
the work specified in this subagreement in
accordance with this subagreement and  ap-
plicable EPA requirements in effect on  the
date  of  execution  of  the assistance  agree-
 ment for this project.
  (3)  The  owner's  or  EPA s  appro.a!  c'
drawings,   designs,  specifications  repors
and incidental work or materials furnished
hereunder shall not in  any way relieve the
contractor  of responsibility for the techni-
cal  adequacy  of  his  work.  Neither  tne
owner's nor EPA's review, approval, accept
ance  or payment  for  any of  the services
shall be construed as a  waiver of any  rights
under  this agreement  or  of any cause for
action arising out of the performance of this
subagreement.
  (4)  The  contractor  shall be. and  shall
remain, liable in accordance with applicable
law for all damages to the owner or EPA
caused by  the contractor's negligent  per-
formance  of any of the  services furnished
under this subagreement.  except for errors.
 .missions or other deficiencies  to the extent
attributable to tne owner, owner-furnished
data  or any third party. The contractor
shall  not be responsible for any time  delays
in  the project caused  by circumstances
beyond the contractor's control.
  (5) The contractor's obligations under this
clause are in addition to the contractor's
other express or Implied assurances under
this subagreement or  State law and  in no
way diminish  any other  rights that the
owner may have against the contractor for
faulty materials, equipment or work.
  (b)  The following clause applies only  to
subagreements  for construction.  (1)  The
contractor agrees to perform all work under
this subagreement In accordance with this
agreement's designs, drawings and specifica-
tions.
  (2) The contractor guarantees for a period
of at  least one (1) year  from the date  of sub-
stantial completion of the work that the
completed work is free from all defects due
to faulty materials, equipment or workman-
ship and that he shall promptly make what-
ever adjustments or corrections which may
be  necessary to cure any defects, including
 repairs of any damage to other parts of the
system resulting  from  such  defects. The
 owner shall promptly give notice to the con-
 tractor of observed defects.  In  the event
 that  the  contractor fails to  make  adjust-
 ments, repairs, corrections or other work
 made necessary by such defects, the owner
 may  do so and charge  the contractor the
 cost  incurred. The performance bond shall
 remain in full force and effect through the
 guarantee period.
  (3) The contractor's obligations under this
 clause are In  addition to the contractors
 other express or Implied assurances under
 this  subagreement or State law and in no
 way  diminish any  other rights  that the
 owner may have against the contractor for
 faulty materials, equipment or work.

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           10. FINAL PAYMENT

  Upon satisfactory completion of the work
performed under this subagreement, as a
condition before final payment under this
subagreement or as  a termination settle-
ment under this subagreement the contrac-
tor shall execute and deliver to the owner a
release of all claims against the owner aris-
ing  under, or by virtue of. this subagree-
ment. except claims which are specifically
exempted by the contractor to be set forth
therein  Unless otherwise provided in this
subagreement. by State law or otherwise ex-
pressly agreed to by the parties to this sub-
agreement,  final payment  under  this sub-
agreement or settlement upon termination
ol this subagreement shall not constitute a
waiver  of  the  owners claims against  the
contractor or his sureties  under  this sub-
agreement or applicable performance and
payment bonds.

148  FR 12926. Mar  28. 1983: 48 FR 30365.
July 1. 1983. as amended  at 53 FR 8077.
Mai. 11. 1988]


         Subpart G—Protests

§33.1105  Applicability and scope of this
    subpart.

  This subpart sets forth EPA's  ad-
ministrative process for the rapid reso-
lution of protest appeals filed with the
award official.

§ 33.1110  Recipient protest procedures.

  (a) Recipients must establish  their
own procedures  for prompt consider-
ation  of  initial  protests  concerning
their  solicitations  or  subagreement
awards. A "protest" is a written com-
plaint concerning the recipient's solici-
tation or award of a subagreement. It
must be filed with  the recipient by a
party  with a direct financial  interest
adversely affected by a recipient's pro-
curement    action    (see    §33.1130
"Review of protest appeal").
  (b) The recipient should review each
protest received to determine whether
it is appropriate to defer the protested
procurement action.
  
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by  the appropriate  Counsel's  office
within seven calendar days after the
adversely  affected  party  receives the
recipient's determination  of  protest.
However,  the adversely affected party
can meet the seven-day notice require-
ment  by   telegraphing  the  Counsel
within the seven-calendar-day period
of its  intent to file a protest appeal,
provided the adversely affected party
submits  a  complete  protest  appeal
within seven calendar days of the date
it sends the telegram. If the seventh
day  falls  on a Saturday, Sunday or
holiday, the next working day shall be
the  last  day  to  submit  a protest
appeal.
  (e) Any  party which submits a docu-
ment to the award official during the
course of a protest  appeal must simul-
taneously  furnish  all other  affected
parties with a copy  of the document.
[48 FR 12926. Mar. 28. 1983; 48 FR 30365.
July 1, 1983]

§ 33.1130  Review of protest appeal.
  (a) If the recipient does not receive
the initial protest  before bid opening
or the closing date for receipt of pro-
posals, the award official may dismiss
as untimely any protest appeal based
upon alleged improprieties in the solic-
itation which  were clearly  apparent
before bid opening  or before the dead-
line for receipt of initial  proposals. In
negotiated procurements, protests of
alleged improprieties  which were in-
corporated in a new solicitation must
have been received by the recipient by
the closing date for receipt of propos-
als for the new solicitation.
  (b)  In cases  not  involving impropri-
eties in the solicitation, the award offi-
cial may dismiss as untimely a protest
appeal if  the adversely affected  party
did not file the initial  protest with the
recipient  within seven calendar  days
of the date the basis for the protest
was  known  or  should  have  been
known, whichever is earlier.

§ 33.1140  Deferral of procurement action.
  When the award official receives  a
protest appeal and the  recipient has
not deferred  the procurement action
under § 33.1110(b), the award official
must promptly request that the recipi-
ent defer the protested procurement
 action until the award official notifies
the recipient of the formal or informal
resolution of the appeal.  The request
shall be  limited to the award of  the
subagreement or subitem  which is the
basis of the protest appeal.

§ 33.1145  Award official's review.
  (a) The award official may establish
rules  of  procedures or deadlines for
the submission of  materials or the ar-
rangement of protest appeal  confer-
ences.
  (b) The award official may summari-
ly dismiss an appeal without proceed-
ings under this subpart if:
  (1) The  protest appeal  is not re-
viewable, see  § 33.1130,  or addresses
issues other than  those allowed under
§33.1120(b);
  (2) The protester substantially  fails
to comply with the procedural require-
ments of this subpart; or
  (3) The protester does  not agree to
the recipient's request for a reasonable
extension of the bid and  bond period.
  (c) The award official may summari-
ly deny a protest  appeal  without  pro-
ceedings under this subpart  if. after
considering the facts  in  a  light most
favorable to the protester, the award
official believes that the  protest lacks
merit.
  (d) The award official will give both
the recipient and the protester, as well
as any other party with a financial in-
terest which may be adversely affected
by the determination of protest, an op-
portunity to present arguments in sup-
port of their  views in writing or  at  a
conference.
  (e) After the announced date for re-
ceipt of written arguments, the record
shall be closed.
  (f) The award  official  shall  review
the record considered by  the recipient
and any other documents or  argu-
ments presented by the parties to de-
termine whether the recipient  has
complied with  the  procurement re-
quirements of this part and has  a ra-
tional basis for  its determination  of
protest.
   (g) The  award  official's determina-
 tion shall  constitute final EPA action
 from which there shall be no further
 administrative appeal. No party  may
 appeal an award  official's determma-

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tion of appeal to the EPA Board of As-
sistance Appeals.
  (h)  Nothing  in  this  subpart  pre-
cludes the award official from review-
ing the recipient's procurement action.
(See §33.115.)
  d)  Noncomphance  with  the award
official's  determination  of  protest
shall be cause for an action against
tne recipient under 40 CFR Part 30 or
32.
  (j) If an appeal involves legal issues
not explicitly addressed by  this part.
the  award official shall  resolve  the
issue by referring to other protest de-
terminations under this section and
decisions of the Comptroller General
of the United States or of the Federal
courts   addressing   Federal   require-
ments comparable to procurement  re-
quirements of this part.
newspapers, or publications 01 general c-rc--
lation over a reasonable area for at least 30
days before bid opening.
  (5) To  comply with 533510. "Adequate
public  notice." the recipient  must publish
the notice in professional  journals, newspa-
pers, or publications  of general circulation
over a  reasonable area for at least 30 da>s
before  the deadline for receipt of proposals
The recipient may use posted public notices
or written notification directed to interested
persons, firms or professional organizations

[48 FR 12926. Mar. 28. 1983. 48  FR  30365
July 1. 19831

  EDITORIAL NOTE: For Class deviation docu-
ments  affecting  Part 33,  Appendix A. see
the List  of CFR Sections Affected in the
Finding Aids section of this volume
APPENDIX   A— PROCEDURAL  REQUIRE-
    MENTS  FOR RECIPIENTS  WHO DO
    NOT CERTIFY  THEIR PROCUREMENT
    SYSTEMS.  OR FOR  RECIPIENTS  WHO
    HAVE THEIR PROCUREMENT CERTIFI-
    CATIONS REVOKED BY EPA

  (a) The following procedural requirements
apply to recipients who:
  (1) Do not certify to EPA that their pro-
curement system meets the minimum pro-
curement requirements in this part, or
  (2) Have  their procurement certification
revoked by  the award official, as stated in
533.115(0.
   To comply with  5 33.250. "Documenta-
tion. '  the  recipient  must submit to  the
award official, unless he instructs otherwise.
the records required by this section.
  (2) To comply with 533.290. "Cost and
Price considerations." the recipient's con-
tractors  and  subcontractors  must submit
ineir cost or price data on EPA Form 5700-
1,'   'Cost or Price  Summary Format for
aubagreements Under U.S.  EPA Grants." or
 n another  format which provides informa-
           to that reqmred fay EPA Form
     T° comPlV ™th 533.415.  "Time for
          bids." the recipient must allow at
     u days between the date when it first
          lnc pubhc n°ti« and the date by
         s must be submitted.
      , com&1y w»th 5 33.410. "Public notice
    sohcitation of bids." the recipient  must
 "uoi.sh the notice  in professional journals.
                                      409

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APPENDIX I

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            APPENDIX I
   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"

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             United States
             Environmental Protection
             Agency
             Grants Administration
             Division (PM-216)
             Wasnmgton. DC 20460
SPA GADMO-80-1
June 1980
c/EPA
Interim Regulations
and Procedures
Applicable to
                        Research
                        and
                        Demonstration
                        Grants

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Reprinted from Code of Federal Regulations,  Tide 40,  Pare 40,  revised as
                            of July 1, 1979

                       First Printing June 1980

-------
     Table    of    Sections
      PART 40—RESEARCH AND
      DEMONSTRATION GRANTS

See.
40.100 Purpose of regulation.
40.103 Applicability and scope.
40.110 Authority.
40.113 Definition*.
40.115-1  Construction.
40.119-2  Internunlcipal agency.
40.115-3  Interstate agency.
40.115-4  Munclpalllty.
40.115-3  Person.
40.115-4  State.
40.120 Publication of EPA research objec-
    tives.
40.123 Grant limitations.
40.123-1  Limitations on duration.
40.123-2  Limitations on assistance.
40 130 Eligibility.
40.133 Application.
40.133-1  Preappllcatlon coordination.
40.133-2  Application requirements.
40.140 Criteria for award.
40.140-1  All applications.
40.140-2  [Reserved]
40.140-3  Federal Water Pollution Control
    Act.
40.143 Supplemental grant conditions.
40.143-1  Resource  Conservation and  Re-
    covery Act*
40.143-2  Federal Water Pollution Control
    Act.
40.143-3  Projects Involving construction.
40.130 Evaluation of applications.
40.133 Availability of Information.
40.160 Report*,
40.160-1  Progress reports.
10.160-2  Financial status report.
40.160-3  Reporting of Inventions.
40.160-4  Equipment report.
40 160-3  Final  report.
40.163 Continuation granta.
  AoTBowrr Authorities cited la 140.110.
  SOOMC 3d PR 12784. May 13. 1973, unless
otherwise noted.

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                                                                                                          §40.115-1
540.10*  Purpose of regiilatioa,
  These  provUlons   establish   and
codify policies and procedural govern-
ing the award of research and demon-
stration grant* by  the Environmental
Protection Agency.

140.205  Applicability and Mop*.
  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.

J40.HO  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. IBSTb) 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-
300.
  (1) Section 104(b) (33 U.S.C. 1254
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.
I294(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 UAC. 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 1044r> (33 UAC, 1254(r»
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 ti«»i»rt««i«nf»ft of the chemi-
cal, physical, and biological  integrity
of freshwater aquatic ecosystems.
  (5) Section 104(s) (33 U.4.C. (a)) 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  effect"  >l  development  within
rivet  o^-'.is  on river systems and  on
the  value  of  water   resources and
Wbli-r-rela'. ed activities.
  t8) LX.!ton 105(a) (33 U.S.C. 1255(a)>
 .uuio-lses  grants  for research and-
demonstration  of  new or  improved
• .et.'iods for preventing, reducing, and
e (nrlnatlng  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
nonpoint  sources, together with  In-
stream  water  quality  Improvement
techniques.
  (8) Section 105(c) (33 U.S.C. 1255
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                                                                                                         940.130
quisitlon.  alteration,  remodeling.  Im-
provement, or extension of a facility.
and the Inspection and supervision of
the construction of a facility.

9 40.115-2  Intermunicipmi agency.
  (a)  Under  the  Clean Air Act.  an
agency of two or  more municipalities
located Ln 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 PR 12784.  May 13.  1973. M amended at
42 PR 36056. Oct. 20. 1977]

5 40.II(-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 agency  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 PR 12784. May  IS. 1973. as amended at
 42 PR 56056. Oct. 20.19771

 540.115-4  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 responsibility
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 PR 12784. May 13.  1973. u amended at
42 PR 36056. Oct. 20. 1977]

540.115-5  Peraon.
  (a) Under the Federal Watei  ollu-
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 PR 12784. May 15.  1973. at amended at
42 PR 56037. Oct. 20. 1977]

940.115-4  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 PR 36097. Oct. 20.1977]

§ 40.120  Publication of EPA research ob-
   jectives.
  The Office of Research and Develop-
ment of EPA publishes i. 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-674. or
the  GranU  Administration  Division.
PM-218. UA Environmental Protec-
tion Agency. Washington. D.C. 20460.
(42 PR 36067. Oct. 20. 1977]
§ 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 PR 36057. Oct. 20. 1977]

5 40.123-2  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 SI million.
  (2) Sections 105(a).  105
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                                                                                                         $ 40.140-3
agencies,  and  Institutions:  pnvate
agencies and Institutions: and individ-
uals.
  (2)  Section  3004 and 8005. public
agencies and  authorities  or pnvate
persons.
  (3)  Section  8006. State, municipal.
intersate or mtermunicipal agencies.
  (4) No grant may be made under this
Act to any private profit-making orga-
nization.
  (c>  The Federal Insecticide. Fungi-
cide,  and  Rodenllcide 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-
public or  private agencies and organ!*
zations and to Individuals.
  <3>  Section 104—colleges and uni-
versities.
  (4)  Section  104(s)-lnstltuUons  of
higher education.
  (5) Sections I05(a). 105(eX2>.  and
107—State,  municipal. Interstate,  and
Intermunicipal agencies.
  (6) Section lBUt»-Statc or States or
Interstate agency.
  (7) Sections 10SXO and 105-
persons.
  (8) Section lot-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.
(18 FR 11784. May 15. l»73. u amended at
40 FR 20083. May 8. 1975: 42 FR 56057. Oct.
20.19711

940.135 Application.

{40.135-1  Preapplieatkm coordination
  (a) All applicant!. (1) Applicants for
research and demonstration grants are
encouraged to contact EPA for further
Information  and ninriffttnif prior to
submitting a  formal  application. The
EPA regional office or the laboratory
neare&t 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 when applicable, outlining the
anticipated Impact on the  environ-
ment pursuant to 40 CFR. Part 6.
   must have been
 approved by   the  appropriate State
 water  pollution  control  agency  or
 agencies.
  (2) All applications for grants under
 section 107. when 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 1965. as
 amended.

 [38 FR 12784. May 19.  1973. u amended tt
 40 FR 20083. May 8.1971:42 PR 5805T. Oct.
 20.19771

 940.140 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:

 940.140-1  All appUcatloM.
  (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  problem*
 toward which the project la 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  plan*  or  ongoing
 planning for the project  area at the
 State, regional, and local levels;
  (1) The existence and extent of local
public rapport for the project;
  (J) Whether the proposed project Is
environmentally pound;
  (k) Proposed cost sharing.
940L140-I (
                  1
                       PolhrtkM CM-
|4*J40-«  Ftewal Water
   tret Art.
  (a) All applications for grants under
section  L05XO 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 watte* or otherwise
preventing  pollution   by  industry.
which method shall have industrywide

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                                                                                                          §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 conditions.
  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 PR 12784.  May  IS. 1971. as unended at
 40 PR 20083. May 8.10781

 {40.145-1 Rwourcc ConstrraUon  and Re-
    covery Act
   Programs for which a Federal grant
 Is awarded by the Environmental Pro-
 tection  Agency to a State, municipal.
 Interstate or Intennunlctpal 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 PR 86057. Oct. 20.1977]

  9 40.145-2  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
  add or other mine water pollution.
140.145-3  Project! Involrlnf eonitni'/tion.
  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 surh interests or rights
as the grants officer finds sufficient to
assure their undisturbed utilization of
the project for the estimated life of
the project.
  (b)  Invitations for  bids or requests
for proposals shall b: 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  ex-
ceeding  $100.000,  each bidder  raus
furnish a bid guarantee equivalent to I
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  1100.000   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.
  (I) 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  facili-
ties for  such access and  Inspection.
The  contract must  also provide that
the grants  officer,  the Comptrollei
General of the United  States, or any
authorized representative shall  have
access   to   any  books,  documents.
papers, and records  of  the contractor
which are pertinent to the project for
the purpose of making audit, examina-
tion,   excerpts,   and  transcriptions
thereof.
  (j) The grantee agrees to construct
the project or cause It to be construct-
ed In accordance  with the application.
plans and specifications, and subagree-
menu  approved by EPA In the grant
agreement or 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 PR 12784. May  13. 1973. M unended at
40 PR 20083. May 8. 1975)

9 40.158  Evaluation of application*.
  Every application  for a research or
demonstration grant will be evaluated
by appropriate EPA staff In terms of
relevancy and the  applicable criteria
set forth In 140.140. Only applications
considered relevant to  EPA research
and demonstration objectives will re-
ceive further consideration and be sub
jected  to additional review. Relevano
will be measured by program  needs
and priorities as defined In  the Agen-
cy's current  planned objectives. Rel-
evancy, coupled  with the result* of

-------
                                                                                                          §40.145
technical review, will provide the basis
for funding recommendations.
  (a)  New application*.  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 sUtutorlly required for radiation
grant*.
  (b) Continuation applications. Con-
tinuation applications will be reviewed
by appropriate EPA staff only. Recom-
mendations for  continuation of  fund-
Ing will  be based  on progress  toward
the accomplishment of the goals set
forth  for  the project and  continued
Agency needs and priorities.

} 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  |30.23S(b).  See  also  ||2.205 and
2.204 of this chapter.
  (c) All Information  and  data con-
tained  In the grant application will be
subject to external review unless devi-
ation la approved for good cause pur-
suant to 40 CFR 30.1000.
[38  PR  17184. May 19. 1973. M  amended at
40 FR  20083. May 8.  1073;  41 PR 36918.
Sept. 1.19781

} 40.180 Report*

} 40.180-1  Pragma report*,
  The  grant agreement will normally
require the submission of a brief prog-
ress report after the end of each quar-
ter  of  the  budget period. A monthly
progress report  may be required for
some  demonstration project*,   If set
forth In the grant agreement. Progress
reports should fully describe In chart
or  narrative  format  the  progress
achieved In relation to the approved
schedule and project milestones. Spe-
cial problems or delays  encountered
must be explained. A  summary  prog-
ress report covering all work  on the
project to date Is required to be Includ-
ed  with  applications for continuation
grants (see 140.165b>. This report may
be submitted one quarter prior to the
end of the budget period.
 140.180-:  Financial rtaUu report.
  A financial status report must be
 prepared and submitted within 90 days
 after completion  of the budget  and
 project periods  in accordance  with
 i 30.635-3.
 [42 FR 58097. Oct. 20.19771

 { 40.180-3  Reporting of invcntiona,
  As  provided  In  Appendix B  of 40
 CFR. Pan 30.  immediate and full re-
 porting of all inventions to the Envi-
 ronmental Protection  Agency  Is  re-
 quired. In addition:
  (a) An annual invention statement is
 required with each continuation appli-
 cation.
  (b)  A final Invention report  is  re-
 quired within 90 days after completion
 of the project period.
  
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Thursday
October 18, 1984
Part III


Environmental

Protection  Agency

40 CFR Part 45
Training Assistance Final Rule
40 CFR Part 46
Fellowship Assistance Final Rule

-------
 4100?    Federal Register / Vol. 49. No. 203  /  Thursday. October 18.  l^a-t / Rul-s  and  Regulations
 ENVIRONMENTAL PROTECTION
 AGENCY

 40 CFR Part 45

  OA-fHL 2621-2(1))

  raining AMletance; FIrwl Rule

 «GINCY: 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 18.1904.
 PON njKTNM INI-OMMTION CONTACT:
 Richard A. [ohnson. Grants
 Administration Division (PM-2U).
 Environmental Protection Agency. 401M
 Street SW., Washington. D.C.. 20480
 (202) 362-5296.
 auPtUMiftTAftv IMPONMATMN: 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 •
 proposed rule for public comment The
 changes to the rule include:
 Stipend Levels
  In the previous rule, we had a dollar
 limit on die use of awarded fund* 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 office* the
 flexibility to make changes in the
 stipend levels based oa program need*
 and funding levels without seeking a
deviation from the rule.
 Subparl 8—Manpower Forecasting
  EPA anticipated funding for
 manpower forecasting when the Agency
was first established, therefore, we
 •"served Suboart B far the development
jf policies 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 forecast,ng in the file of
 this part and in the table of contents.

 Consistency With 40 CFR Pan 30.
 "General Regulation for Assistance
 Programs"
  EPA published a final revision to 40
 CFR Part 30 on September 30,1963 (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 (udgement whether a
 regulation is "major" and. therefore.
 subiect 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.
 Then will be no tnator increases in
 costs or prices for consumers.
 individuals, industries, or Federal.  State,
 or local governments. The rule waa
 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).

 LM of Subjects in 40 CFR Part IB
  Administrative practice and
 procedures. Environmental protection.
 Grant programs—environmental
 protection. Reporting and recordkeeping
 requirements.
  Dated: October 3. IBM.
 WHBenO.Ruck«itluus,
Adauaittntor.
  Accordingly, title 40. Chapter IU
 amended by revising Part 45 to read aa
 follows.

PART 4S-TRAININO ASSISTANCE

te.
45.100  Purpoae tod icope.
45.108  Authority
45.110  Objective!.
45.113  Definitions.
45.120  Applicant eligibility.
45.125  Application requirements.
45.130  Eviluauun of •pollutions.
49.139  Supplemental conditions.
45.140  Budget and protect period.
45.145  Alloubibry ind allowability of costs.
45.150  Reports.
45.155  Continuation iisistinca.
Appendix A—Environmental Protection
    Agency Training Programs
  Authority; Sec. 103 of (tie Clesn Air Act aa
amended (42 U S C. 7403). sec 104(8). 1C*
 nii r i if ih* Clean Water A<_i Jk ..-p-jcii
 111 l  SC ::54fg! i:J9 and 12S1I. >«•« 7i»r
 or d ar«M 01 'he Sond Wajte O.jposal Act *i
 .mcnj^ (42 USC 6977 and 89811 ice 1*42
 uf 'he Srt! Drinking Wai«r Ael. as 
-------
           Federal  Register / Vol 49. No  203 /  Thursday. October 18. 1984  /  Rules  and  Regulations     41005
 § 45 120  Appllcjnt tligibillty.
   Institutions, organizations, and
 individuals are eligible for EPA training
 a^irds as follows
   (a) Clean \ir \ct Section I03(b)—Air
 pollution control agencies, public and
 nonprofit  private agencies  institu'ions
 orgdr ?a;  OPS and .ndivd-a'.s \o
 a'.vara -nay be rrade under this Act to
 an>  private, profitmakmg organization
   (b) C.'ecn Water Act (1) Section
 H4(b)i3)—State water pollution control
 agenc.es.  interstate agencies other
 public or nonprofit private agencies.
 institutions, organizations, and
 individuals. No award may be made to
 any  private profitmakmg organization
   Ul Section 104(g|(3||A|—Public/or
 private agencies and institutions, and
 individuals
   (3) Sections 104(g)(l) and
 l04(g)(3)(CJ—Stale 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 (l)
 Section B001(a)—Public or private
 authorities, agencies, and institutions
 and  individuals. No award may be made
 to any pnvate. proFitmakmg
 organization.
   [2] Section 7007(a)—State or interstate
 agencies, municipalities, educational
 institutions, and other organizations.
  (d) Safe Drinking Water Act. Sections
 U42(b) and I442(d)—Public agencies.
educational institutions, and other
organizations. No awards may be made
to profitmakmg agencies or institutions.

§45.125  Apportion rcqummmta.
  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
jwarded by EPA Headquarters, the
applicant must send the application to
the Environmental Protection Agency.
Grants Administration Division. Grants
Operation Branch (PM-216). 401 M
Street SW. Washington. D.C. 20460. If
the assistance agreement is to be
awarded by an EPA Regional Office,  the
applicant must send the application to
(he appropriate Regional Office. (OMB
clearance number 2010-0004)

§41130  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:
  (1) Relevance of proposal to Agency
objectives priorities, achievement of
national goals arid technical merit.
  (2) Competency of the proposed staff
T. relation to the type of project
proposed
  (3) Feasibility of the proposal.
  (4) Adequacy of the applicant s
-esources available for the project.
  (5) Amount of tards necessary for the
cor.pietion of the project.
  (b) In addition awards under section
104(g)(1 | 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 subiect 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 sen-ices 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 ill
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 rema'n in an
occupation involving the design, operation, or
maintenance of waitew .ter treatment work*
for •  penod of two yean after the
satisfactory completion of my studies under
this program. I 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.
 §45140  Budget and proitct period
   The budget and project periods :or
 training awards ma> not exceed 'hr°p
 vears
 § 45 145  Allocability and allowability oi
 cottt
   (d) Allocdbil.ty and allowabiliiv of
 costs v%il! be determined in accorcar.cc
 with 40 CFR 30 410
   (b) Costs incurred for the purchase 31
 land or the construction of bjilclu-;s --P
 not allowable
 § 45 ISO  Reports.
   (a) Recipients must submit the repor 3
 required in 40 CFR  30 SOS
   (b) A draft of the final project repor'  >
 required 90 days before the end of the
 project period  The recipient shall
 prepare the final protects report in
 accordance with the project officer s
 instructions, and submit the final projpi
 report within 30 days after the end of ho
 project period.
 § 45. 1 55  Continuation assistance.
   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 penod. and a  detailed uork
 plan for the new budget period and
   (c) Submit a preliminary financial
 statement for the current budget perod
 that includes estimates of the amount
 the recipient expects to spend by the
 end of the current budget period and -he
 amount of any uncommitted funds
 which the recipient proposes to carry
 over beyond the term of the current
 budget penod.
  APPCNOU A— ENVIRONMENTAL PROTECTION
        AGENCY TRAINING PMQGRAUS
                    [   »aw«»«inq .  ,.,
Oftaoito Non* and Raa>
  IML
  *r PeXMn Control Xtof
  A* Poounon Cwroi—r«crv <
Omaoiwiur
  wtwr  Penmen Control— X
   P^o^Mvontf    Timnu
   Orwll.
  S4K Omuig WMr Pnttt. t
   larat TranngOxwa.
  Sm Cmwig  W*'«r-Oc
     o« So   WM»  M
                Htf*
  •TOM w«w Trmng.
(FV Ooc M-2T4OI fitod 10-1 -»• 3 «9 ir ;
•MJM COOS USB-M-M

-------
 41006    Federal  Register / Vol. 49. No.  203 / Thursday. October 18.  1964 / Rules and Regulatlona
 40 CFR Put 49

 (OA-f HI 2821-2
-------
           Federal  Register  /  Vol. 49.  No. 203 / Thursday, October  18. 1964  /  Rules and Regulations     41007
 supportive of pollution abatement and
 control efforts.

 §46.120  OeffnlttoM.
   The following definitions supplement
 the definitions in 40 CFR 30 200
   Fjll time fellow An individual
 enrolled in an academic educational
 program directly related to pollution
 abatement and control and taking a
 T.numum 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
 m 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.

 §48.125  Benefits.
  (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
 S7SO 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 • 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.

§46.130 EHOjMKy.
  (a) All applicants for fellowships
 under this part must be:
  (i) 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'tne enrollment for academic credit
insr  ducationaJ 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 *;th responsibilities for
 environmental pollution control, and1
 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 application*.
  (a) Applicants must submit their
 requests for assistance on EPA Form
 5770-2. "Fellowship Application."
 Applicants must submit the original and
 two copies ct 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 f 46.130.
 and any additional information required
 by the award official. Instructions for
 filing are contained in the application
 kit.

 } 46.140 Evaluation of application*.
  (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:'
  (S) 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.
141.148 PeBowiMp agreement
  (a) The fellowship agreement is the
wntten 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 coats
incurred by the fellow before both the
award official and tat 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 L
 §46.150  FcUewsMp agreement
 amendment
  (a) The fellow must receive a formal
 amendment before implementing
  (i; 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 scupe 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 ISOfa). The fellow must  .form the
 EPA protect officer in writing before
 implementing minor changes.

 §44.155  Supplemental eandrttont.
  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)(S) and 104(g)(3)(B) of the
Clean Water Act as amended: and
section 8001 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.

{46.160  AceepUnes of teflewehlp award.
  The applicant 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 (he agreement to the award
official or request an extension of the
acceptance Hoe within three calendar
weeks after receiving the agreement, the
offer is null and void.

I4I.1M  DuitftaeffeloveMp.
  (a) Full-time fellowships will not
exceed one year.
  (b) Part-time fellowships will not
exceed three yean.

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41006    Federal  RegUtat /  Vol. .49. No, 203 / Thursday. October 18.  1984 / Rules and Regulation
 §0.170
  (a) The fellow mutt 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.

 |4ti7t  Comptottan of studBee.
  Fellows must submit EPA Form 5770-4
 "EPA Fellowship Termination Notice."
 when the fellow completes the course of
 study. (OMB clearance number 201P*
0004)
|4i,tao 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 p.ay tuition and fees in a
lump payment directly to the sponsoring
institution only after EPA has received
the signed EPA Form 5770-7.
  APPCNOII A—ENVMKMMENTAL PDOTECTION
      AQCNCV FELLOWSHIP Pfloofl«M3
Omn of Mr Ham. f* «t»
 *rar
One* oi Anmfi *nd
OMCi 01 3bM «MM  Bid |
                                                                            in o*c.

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Monday
March 9, 1992
Part III


Environmental

Protection Agency

40 CFR Part 47
National Environmental Education Act
Grants Regulations; Interim Rnal Rule

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             Federal Register  /  Vol 57. \o 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 Slates 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 tnbal education
agency, as defined in { 47105(0:
  (d) Not-for-profit organization means
an organization, association, or
institution described in section 501(c)(3)
of the Internal Revenue Code of 1986.
which is exempt from taxation pursuant
to the provisions of section S01(a) of
such Code:
  (e) Noncommercial education
broadcasting entities meana any
noncommercial educational
broadcasting station (and/or its legal
nonprofit affiliate!) a* defined and
licensed by the Federal Communications
Commission;
  (0 Tribal education agency means a
school or community college which ta
controlled by an Indian tnbe, 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 la  not administered by the Bureau
of Indian Affairs:
  (g) Refer to 40 CFR parts 30 and 31 for
definitions for budget penod. protect
period, continuation award, cooperative
agreement, grant agreement, and other
Federal assistance terms.
947.110
  Any local education agency (including
any tnbal 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 11 S  Award amount and matching
requtrefnonta.
  (a) Individual awards shall not exceed
S250.000. and 25 percent of all funds
obligated under this section in a fiscal
year shall be for individual awards of
not more than 55.000
  (b) The Federal share shall not exceed
75 percent of the total protect 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 SoOcttatfon notice and propoeal
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 assesa the
project.
S47.12S ENtjMe and
ote
                                 and
  (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 conditiona and analysis
of environmental pollution problems:
  (3) Projects to understand and assesa
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 States 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 on 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 descnbed in 40
CFR part 31. These procedures include
provisions for small purchase
procedures.

§47.138 Dispute*.
   Disputes arising under these grants
 shall be governed by 40 CFR 301200 for
 recipients other than State and local
governments and 40 CFR 31 70 for Slate
 and local governments.
 (PR Doc. 92-5263 Filed 3-6-02. 8.45 am)
 SMJNG) COOS tSW-fO-H

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APPENDIXJ

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           APPENDIX J
EPA ORDER 1000.25, "USE OF RECYCLED
             PAPER"

-------
     cPA
ClM*jfication No..  \ 6 G

Approval Oat.: JAM 2 I  -9SO
                               Use  of Recycled  Paper
              1.    PURPOsg.   This Order establishes Agency policy  to
         encourage the use of recycled paper.

              2.    BACKGROUND.   The EPA has  «et  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 products 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 en  Agency
         policy promoting the use of recycled paper.

              3.    POLICY,  zt is Environmental  Protection Agency  policy
         to use,  and to promote the use of,  recycled  paper.

              4.    RESPONSIBILITIES.  The Procurement and Contracts
         Management Division (PCKD) 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,
         PCMD 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 Agency.

              All Agency employees should be mindful  of our  initiatives in
         the area and should do their part to reduce  and^rjecycle waste.

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MEMORANDUM

SUBJECT:  EPA Order on the Use of Recycled Paper

FROM:     Harvey G. Pippen, Jr.,  Director
          Grants Administration Division

TO:       Assistant Regional 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   -elusion of   special condition.

     Since  that  time,  we  have  received  several questions  and
comments on  the special  condition.   T!;sed  on  these  comments,  we
have revised the special condition to read as follows:

     "Pursuant  to EPA Order 1000.25, dated January 2".  1990,
     the  recipient  agrees to use  recycled  paper Jor  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 an EPA Order,  and applies only to
reports  delivered  to the  Agency.  Also,  please  note  that this
special  condition  applies  to  all new and  continuing  grants and
cooperative  agreements.    You should  begin using it  as revised
immediately.

     Should  you  have any  questions  or comments  regarding this
matter, please  call me or  have your staff contact Tom Fletcher on
382-5297.

Attachment

cc:  Regional Grants Branch Chiefs, Regions I  - X

bcc: Bruce  Faldman
     Fred 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\WPFII.E\RECYCLE3.MEM

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APPENDIX K

-------
           APPENDIX K
   EPA ORDER 5730.1, "POLICY AND
PROCEDURES FOR FUNDING ASSISTANCE
          AGREEMENTS"

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 £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 lastLminute
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
technicalVprogrammatic  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   wnich
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 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  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  delegation  of
authority.

                (b)  The  GMO  should request clarification from the
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 E. Cannon
                      Assistant Administrator

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EPA  ORDER
                                                                 5730.1
                                                                 1/21/94
 r/EPA
                             United States
ENVIRONMENTAL PROTECTION  AGENCY
                        Washington. DC  20460
                           ASSISTANCE ADMINISTRATIVE SUMMARY SHEET
 JOTE: Quality Assurance1  Any applicant proposing anvironnrientally related measurements or data collection must comply with EPA's
       requirements (or 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 (CFOA) Number:
  Program Title:
  Program Purpose:
 . Eligible Applicants/Recipients:
7. Type of Assistance:
   |  j  Grant
   r~j  Loan
   i—I  Cooperative Agreement
                             8. Nature of Assistance:
                                I   I  Continuing Program
                                I   I  Project
 I. Statutory Authority:
    Act:       	
    Section:     	
                             10. Regulatory Authority:
                                  Programmatic:
                                  Administrative:  _
11 a. Cost Shanng/Match Requirements:
    Yes        No
                     MOE
                      lib.  Basis of Cost Sharing/Match Requirement (Check One):
                        Statute         |   |     Program Regulation        |  |


                        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
 EPA 5700-51 (5-931

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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 if 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 «.) Be concise and descriptive (40 characters or
        less).

5.       PURPOSE: (A one or two sentence summary description of eligible activities.)

6.       ELIGIBLE APPUCANTS\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-SHARINGVMATCH 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 nght
        to review applications for Federal assistance.  Coordinate with Grants Policy and Procedures Branch,
        Grants Administration Division for verification of requirement.)

 IS.     PROGRAM CODEMDENTIFIER:  (The administrative code that identifies the program  and assures the
        proper recording of the receipt of applications for  assistance,  their disposition,  and related financial
        transactions.  It is an integral part of the assistance identification number.  Obtain  from  GICS  Policy
        Specialist, Grants Administration Division.)

 16.     PROGRAM CLEMENT: (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 L

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         APPENDIX L
PERFORMANCE BASED ASSISTANCE
           POLICY

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I
  ''•.„*»<•
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

               WASHINGTON DC 20440
                              si  m
                                                TMf ADMINISTRATOR
MEMORANDUM

SUBJECTt  Policy on Performjnce-Baied Assistance

FROMs     Lee M. Thomas

TOi       Assistan- Administrators
          General Counsel
          Inspector General
          Associate Administrator
          Regional Administrators
          Staff Office Directors
          Division Directors


     Z am 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.  Zn 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
across 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 explains how FY'86 assistance agree-
ments will be expected to comply with it and details the rstionale
behind major policy components.

     The Deputy Administrator will monitor implementation of the
Policy on Performance-Based Assistance and issue special instruc-
tions as necessary.  Z expect Assistant Administrators to advise
the Deputy Administrator of actions planned or taken to  make their
program policies* guidance and procedures fully consistent with
this policy within thirty days.

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                               -2-
     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 am pleased to Issue this EPA Policy on Performance-Based
Assistance*  This document was developed by a task force composed
of representatives from EPA Headquarters and Regions* State envi-
ronmental agencies and Executive Branch Organizations to establish
a consistent. Agency-wide approach toward negotiating and managing
assistance agreements with States.

     The three major components of the policy describe how assis-
tance agreements should be negotiatedt how a State's performance
against negotiated commitments should be assessed, and what actions
should be taken to reward accomplishments and correct problems.
The overall approach is one of EPA/State cooperation in setting
and attaining environmental goals through.effective State programs.

     I anticipate strong Agency commitment to the principles of
this policy and look forward to the strengthening of the EPA/State
partnership I believe will result from this approach.
                                    Lee N. Thomas            Date
                                    Administrator

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           EPA POLICY ON PERFORMANCE-BASED ASSISTANCE
PURPOSE
     This policy establishes an Agency-wide approach which links
U.S. EPA's assistance funds for continuing State environmental
programs to recipient performance.  The approach employs assistance
as a management tool to promote effective State environmental pro-
grams.  The policy's goal is the consistent and predictable appli-
cation of the performance-based approach across Agency programs
and among Regions.

     Mechanisms for tying EPA assistance to a recipient's accor-
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 "Consequenc.es of Oversight" sections) upon the
policy's issuance.  To the greatest extent possible* this policy
should also guide the negotiation of grants and cooperative
agreements for fiscal year 1986.

     This policy supersedes all previous policies on perfloraance-
based assistance to the extent they conflict with the approach
outlined below*  It 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 BPA's assistance for con-
tinuing environmental programs), it applies equally to Interstate
and local agencies which receive similar support.

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                              -2-
PRINCIPLES AHD APPROACH"
PRINCIPLES

     This policy on performance-based assistance is designed to
strengthen the EPA/State partnership by ensuring that EPA assis-
tance facilitates the implementation of national environmental goals
and promotes and sustains effective State environmental programs.
The policy provides a framework within which EPA and States can
clarify performance expectations and solve problems through a system
of negotiation, according to a predictable but flexible set of
national guidelines.  This framework is built around several funda-
mental principles which will also guide the policy's implementation:

     o EPA will use -^rfonaance-taised assistance as a management
       tool to promote 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-based approach to their needs and the poliey'i
       guiding principles!

     o States and EPA should share a common set of expectations
       regarding performance commitments and likely responses
       to identified problems.  There should be no surprises as
       EPA and States relate to each other under this policy;

     o In negotiating State- performance objectives, EPA and the
       States win seek realistic cosmUtments 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 is fully committed to the success of State environ-
       mental program* and will seek opportunities to acknowl-
       edge) tnelr 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 performance;
applying corrective actions to solve problems; escalating signif-
icant conflicts to top management; and, in cases of persistent per-
formance problems. Imposing sanctions.

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                               -3-



                       ASSISTANCE A<5REEMgB7
     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 -.op national priorities as iden  'led
in Agency guidance bv explicitly addressed in all State work pro-
grams.  As EPA and States negotiate outputs* nat'onal 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.  Stats priorities should
represent only those activities allowable under federal statutes.

     The appropriate mix of national and Stats priorities will vary
from work program to work program* according to ths uniqus 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 Stats prioritiss can dslivsr ths 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 scops of Agency
priorities, s rsslistic considsration of funding limitations
throughout its development, and specific identification of top
priorities by Program Offices.

     Ths 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 ths significant
outputs and conditions of each agreement.  They will bs respon-
sible for all major  assistance-related decisions.

     Assistance agreements msy be amended by mutual agreement of
the Regional Administrator and his/her State countsrpart.  A major
change in national or State priorities, environmental emergencies,
and ths discovery of grsatly overestimated commitments are examples
of the types of circumstances which may necessitats renegotiation.

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                              -4-
WORK PROGRAM

     The work program should specify the outputs a State win pro-
duce under its federal assistance award (including the State match
and level of effort) 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 programs*  The good
       or poor performance of a State (or EPA) identified through
       oversight she. ' * influence 'he outputs and conditions
       contained in the next annual assistance agreement.

     o Work programs should specifically identify completion
       timeframes for outputs.  EPA may also specify Interim
       milestones and reporting requirements based on the
       priority needs of national programs and in keeping with
       good management practice.  Reporting required under an
       assistance agreement should be consistent with EPA'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
       Chose paid for with the federal and State funds included
       in the federal assistance agreement budget.  Awareness
       of State responsibilitee not related to federal assistance
       greatly enhances EPA's understanding of the scope of
       State environmental programs.  Should a State choose to
       submit plans for its entire program, it need not indicate
       resource) levels, but only program activities.  EPA will
       not examine these activities in the course of assistance
       oversight except when 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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                              -5-
     o The assistance agreement should describe the specific
       research, technical advice, guidance, regulations,
       contractor assistance or other support EPA will furnish
       States to enable them to fulfill specific work program
       outputs, making clear that accomplishment of the outputs
       is contingent upon the receipt of the EPA support.  If
       EPA does not furnish the support described in the assistance
       agreement, the Statt 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 Stats- progress toward accomplishing outputs.  EPA
should also periodically conduce 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 prograas.  This process is governed by
EPA's Policy on Oversight of Delegated Programs which otates
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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                              -6-


 surprlses for States regarding content or expectations; and
 results should be documented  in a written report.

     EPA should adhere to these principles of oversight and to
 the scope and schedule of evaluation agreed to  in  the assistance
 agreement.
FEATURES

o States are responsible for notifying EPA in a timely manner of
  problems they experience in trying to accomplish their outputs.
  Likewise, EPA is responsible for promptly notifying States of
  its inability to supply promised support.

o Formal and informal evaluations by EPA should be constructive,
  conducted in the spirit of promoting good performance through
  problem-solving, not 1 .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 s 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 assistancs 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 time.

o Assistance oversight should use existing reporting and evaluation
  mechanisms to the extent possible.
                   CONSEQUENCES OP OVERSIGHT
     Once 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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                              -7-
APPROACH TO OVERSIGHT RESPONSE

     The Agency's goal  in providing performance-based 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 spirit 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 thtt most effective Incentives at EPA's disposal.
       Publicising 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 tos

           -  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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                              -8-


           •  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 talcing 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 br resolved, and any interim milestones
       that will be necessary to monitor State progress*

     o Regions and States should follow a corrective action strat-
       egy based on the unique history and needs of 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 problem*.

     o Possible corrective actions include but are not limited toi
       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 Zf a Region is not able to provide a particular essential
       type of specialized assistance to a State, the Reqion should
       bring this corrective) action requirement to the attention
       of Headquarters program managers for action aa appropriate.

     o The intent of this policy is to see that EPA assumes a
       constructive approach in responding to State performance
       problems.  When corrective actions have failed, or EPA and
       a State cannot agree on a corrective action, the Region
       may consider imposing a sanction.  Zf a sanction is contem-
       plated, the performance issuo 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 expeditiouslyi

         a.  The Regional Division Director responsible for
             managing the assistance agreement will raise the
             issue to the attention of the Deputy Regional
             Adminlnstrator or Regional Administrator and advise
             his/her State counterpart of this notification.

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                              -9-
             The Regional Administrator will personally contact
             the State Environmental Director or other appropriate
             State manager to attempt to reach agreement on a
             corrective action, and to discuss the contemplated
             sanction.

             National Program Managers should be advised of any
             State program problems warranting a sanction,  and
             should be notified of any final decision to take
             such action.

             If negotiations between the Regional Administrator
             and State counterpart fail to solve the problem,
             the Regional Administrator should judge under  what
             circumstances notification of the Governor should
             occur.
SANCTIONS
     o Regional Administrators must recognise that national re-
       sponsibility for any State environmental program continues
       after the imposition of a sanction.  They should make ar-
       rangements for completion of crucial outstanding outputs
       and should take steps to promote and sustain activities
       the State is performing effectively*

     o A» 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 regulation* 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
       terns 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-Baaed Assistance
                  Question and Answer Package
PURPOSE

I.  What  is the purpose of this policy?

         This policy lays out a framework for managing EPA's
    assistance to Statts 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 States1 performance against agreed
    upon commitmentsr solving problem* through corrective action
    strategies* and imposing sanctions when corrective actions
    have failed or EPA and a Statn 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 these 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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                               -2-
    on or at the top of  the national priority  list, are of
    great concern  to a particular State 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.  Each
    Program Office should also list priority activities in its
    media area, ranking them and identifying those which must
    be reflected in every State work program.  The Program Office
    and Agency priority lists should complement one another.
    EPA will involve states early on in defining the order and
    scope of Agency and Program Office priorities.

         EPA Regions should negotiate work program outputs based
    upon priorities as identified and ranked in the Guidance.
    Carefully delineated priorities will help ensure work programs
    that contain clear and measureable output commitment*.

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                              -3-


ESCALATION

6.  What is tho 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 commitmants 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 problem! receive the
    prompt attention of managers capable of solving those problems
    expedltiously.  This sequence was included in the policy to
    address concern that State performance problems too fr:^   Uy
    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 en-
    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 regarding
    sanctions* the policy encourages the escalation of any signi-
    ficant information (positive and negative) regarding the per-
    formance of a State program within both Regions and States as
    appropriate.


QUARTERLY 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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                             -4-


     States to plan their programs, which are qenerally based on
     a yearly cycle.  The Task Force Celt 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**
     or other payment mechanisms?

          The customary mechanisms for the release of funds are
     not affected by this policy.  For example, letter of credit
     procedures, which are used by most Regions* provide a
     system whereby the recipient may promptly obtain the funds
     necessary to finance the Federal portion of a project, and
     which precludes the withdrawal of funds froa 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 credit 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 do«s consider this practice a sanction.
     Zt 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 ths 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 ths problems through corrective steps.  Regional
     and programatic differences call for Regional managers to
     use their best judgment in making such decisions.

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                               -5-


11.  What doee this policy  imply for withholding funds for
     problems that are not  directly related to a State's perfor-
     mance of negotiated outouts 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 --
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                               -6-
IS.  How can the assistance agreement be amended?

          Both the policy and the regulation allow for the assist-
     ance agreement to be amended at any 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 devise 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.


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 IPA's
     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 as part of a comprehensive examination
     of State program performance.


18.  Hc\. <*.u State output commitments relate Lo SPMS commitments?

          EPA should always discuss with Statee any State
     commitments to bo included in BPA's Strstegie Planning
     and Management System.  Under a system of performance-based
     assistance, it is imperative that work program outputs which
     are also SPMS commitments be agreed upon in advance by Regions
     and States.  Since poor performance may have fiscal consequences
     under a performance-based system, it would bo unfair to hold
     States accountable for SPMS. measures they were not aware of
     or did not accept.

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APPENDIX M

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         APPENDIX M
CARRYOVER POLICY (COMPTROLLER
  POLICY ANNOUNCEMENT 88-09)

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        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON. DC. 20400
                            MAY  6
               COMPTROLLER POLICY  ANNOUNCEMENT
                           No.  88-09
                                                       OFFICE OF
                                                     ADMINISTRATION
                                                     AMD RESOURCES
                                                      MANAGEMENT
MEMORANDUM

SUBJECT:


FROM:


TO:
Disposition
Assistance
ted Balances of
David P.
Comptroll

Assistant Regional[Aflministrators
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 X and XX 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 XXI contains examples of  how this guidance
applies to specific types of assistance  agreements.

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EFFECTIVE DATE

     Allowance Holders must ensure that assistance awards
•ade froa their respective allowances are adainistered in
accordance with this Policy Announcement no later than
June 30, 1988.

FOR ADDITIONAL INFORMATION

     If you would like additional infornation 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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                                              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 Superfund
activities have historically been funded with such appropriations.
Congress  may choose to add to the /gency'e  "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 progrees  milestones or  similar criteria.)

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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" }_' for internal expenses, contracts,
etc., to carry out program/project objectives during the budget
period.  For various reasons, a recipient nay 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
A \ • «•!*•• mA i n Gmr>+ i «« T T HA 1 MU
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 FMFIA weaknesses, we made a commit-
ment to review our current practices for  making recipients'
unexpended bala.._js available in later budget periods.  T..-
policies and procedures set out in the following  sections are a
result of that review and seek to strengthen our  management of
those funds.

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
period.  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! -wing 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
or outcome, would be merely informational and are not  independent
or separate from the final project outcome, product or  report.

  Criterion: With respect to project agreements, unobligated
             funds from one budget period may be made available
             in a subsequent Budget period of the same  project
             by properly executing an assistance amendment as
             long as the general project scope of work  remains
             unchanged.  Zf there are major changes in  the scope
             of work, the unexpended balances may be carried
             forward only if the source appropriation for those
             balances has not expired prior to the date of the
             amendment.

      2* Continuing Environmental Program and Other General Support
Assistance Agreements.In addition to project type assistance, EPA
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.

  Criterioni With respect to program agreements, unobligated
             balances from one budget period of a continuing

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             environmental program or activity may be made
             available :n a subsequent budget period of that
             program c  activity as long as: 1) the transfer
             to the subsequent 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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DEPOSITION OF UNOBLIGATED BALANCES OF ASSISTANCE AWARDS.

            WHEN CAN I CARRY FORWARD FUNDS?
                             Funds net
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                             •wry Itrwwtf.
Pundf no
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                                              Attacnmerr
          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
b« 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
made before the end of the budget period, or at any time without
the support of a signed FSR or other signed authorization, the
Form 5700-20A/B must be signed by the recipient's authorizing
official.

     In lieu of the recipient official's signature on the 5700-20A/B,
an award official can use the recipient's interim or final FSR if
the 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
followsi

     1) Item 1.  The assistance ID in item 1 serves as the
obligating document number for the Financial Management System
(FMS), thus serving as a common data element for grants and
finance.

     2) Item 22.  The narrative in this item will include a
brief description of the action being taken by this amendment to
the original award.

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     3) 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. Item 22.   A brief  explanation of the action will be
included in the  narrative.

     3. Item 30.   This item would be completed only if the 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
amounts already  awarded from current year funds, a second  line of
accounting data  must be entered on line 39.  The data would be the
accounting information associated with the decrease, and the amount
of the decrease  would be placed in parentheses in the final block
of that line item.

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     If the less structured Form  5700-20B  is used to execute the
preceding actions, the saae information must be contained in
readily identifiable fora 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'a 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.  DEOBLICATION 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 am  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 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 CPA 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 cop/ of the  FSR)  to their financial
•anagement office (FMO).  The FMO recorded the  downward adjustment
using Transaction Code 050.2, and the accounting data for those
funds.

     Based on earlier discussions with the State, the Region had
agreed to make the $50,000 available as additional funding in the
then-current budget period.  Before the appropriation expired, an
amendment  increased the current year funding.

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     The amendment was provided to the FMO with the documents
effecting the decrease.  The FMO recorded the increase against
the current year obligation document nunber 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
•ward 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 tctsupport 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
             T
T
T
             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 nade 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
funds 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 wAe 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 RtD 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
am well, but since the project was now over, the balances were
treated as recoveries to the appropriation.

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APPENDIX N

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         APPENDIX N
USE OF DISADVANTAGED BUSINESS
      ENTERPRISES (DBE)

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            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                       WASHINGTON. D.C. 20460
                           JAN 151992
                                                         C OP
                                                    THE MJMWBTHATOR
MEMORANDUM
SUBJECT:  The 8% Plan for the Utilization of Disadvantaged Business
          Enterprises in Procurement Under/Assistance  Programs
FROM:     F. Henry Habicht  I
          Deputy Administra '

TO:       Assistant Administrators
          General Counsel
          Inspector General
          Associate Administrators
          Regional Administrators
          Staff Office  Directors
          Laboratory  Directors

     On February 15,  1991, the Agency issued guidance entitled "FY-
91 Program for Utilization of Disadvantaged Business Enterprises in
Procurement Under Assistance Programs11.  That guidance implemented
the 1991 Appropriations Act, P.L.  101-507,  which authorized EPA to
establish a minimum 8%  goal for the use  of disadvantaged business
enterprises in all procurements under  its assistance programs.

     In the Conference Report to EPA'a FY-92 Appropriation Act, the
conferees reaffirmed their support for  this program.  Based on P.L.
101-507 and the Conference  Report, EPA will  continue to establish
an 8% goal each fiscal year. Accordingly, the plan, as cited in my
February 15, 1991 memorandum, remains  in full force  and effect.

     I am  positive  that each of you will  join  me in making  this
commitment work.

     Should you have questions regarding the  technical application
of  this  plan,  the Office  of  small   and  Disadvantaged  Business
Utilization stands ready to offer  any assistance deemed  necessary.
All requests for information on this program should be directed to
John H. Ropes,  Director, Office of Small and Disadvantaged Business
Utilization, or George  K. Mori., Senior Program  Officer.   John can
be reached at  FTS 365-7777  and George  on 365-6301.
                                                             on Ricydid f»p*

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, DC. 20460
                               FE3  I 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 Hablcht, II \
          Deputy Administrator f

TO:       Assistant Administrators
          General Counsel
          Inspector General
          Associate Administrators
          Regional Administrators
          Staff Office Directors
          Laboratory Directors

     On November 5, 1990, President Bush signed into lav, the 1991
Appropriations Act, P.L. 101-507, which Includes the appropriations for
the Environmental Protection Agency.

     The Administrative Provisions of this Act contains the following
language:

          "The Administrator of the Environmental Protection Agency
     shall, to the fullest extent possible, ensure that at least 8 per•
     centum of Federal funding for prime and subcontracts awarded in
     support of authorized programs, Including grants, loans and contracts
     for vastevater 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 (IS 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 cay new procurement und-jr FY-91 grant amendments which involve
the use of additional Agency funds.
                                                                 Fruttd. aw RtcycltA 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 entitles 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 lav 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 commitrent
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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                   L'.S. ENVIRONMENTAL PROTECTION AGENCY

              Disadvantaged Business Enterprise Program Plan

                      Financial Assistance Programs
I.  BACKGROUND.

     Under the authority of Executive Orders 11625, L2432 and 12138, :p.e
\gency established annual objectives for minority and women-owned businesses.
These objectives are accomplished by mandating that the recipient and tne
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 \geacy
how well they were doing in meeting their "Fair Share" objectives.

     Prior to Fiscal Year 1991, the Environmental Protection Agency's (EPA's)
""air Share" polic> ~^r utilization of small, minority and women-owned   =1-
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.   Idltionally, all
of the non-profit institutions and universities were exempt r:om 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*a FY-1991 Appropriations Act, Congress requires EPA to ensure, to
the fullest extent possible, that at least 8 percent of Federal funding for
prime and -subcontracts awarded in support of authorized EPA programs for FY-9L
go to businesses or other organizations owned or controlled by socially and
economically disadvantaged individuals (see VII. "definition").  Accordingly,
any grant, cooperative agreement or loan awarded by EPA in FY-91 must stipulace
that a minimur objective of 81 of such funding be directed to DBEs.

     To the extent that the requirements of OMB Circulars A-102 and A-110 as they.
pertain to the utilization of minority and women-owned businesses conflict with
the FY-91 Appropriations Act language, the Circular provisions are superseded.
State government agencies receiving EPA funding will be required to escablisn  a
minimum 8Z "Fair Share" objective for disadvantaged business utilization  .n
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, cooperacive agreements or loans, including chose for researcn anc
development (other than research awards under che Clean Air Act) will be suajec:
to the same requirement, "positive efforts' (as required in OMB Circular A-llu)
for the utilization of small businesses and minority Dusinesses are not suf-
ficienc to meet the requirement of ?.L. 101-507.

     The AsproDriations Act soecirically includes Historically Slac* lollages
and Universities (HBCUs) as part of tne definition of DBEs.  Therefore, £?A
will require that all recipients, including institutions of higher ecucacior..
include HBCUs, in their definition of DBEs.

     The following is taken verbatim from P.L.. 101-507 signed by che Presiaer.t
on November 5, 1990.  The Administrative Provisions contains the foilowi-.g
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
     _n support of authorized programs, 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 ics "Fair Share" policy
in FY-1991.

V.  POLICY.

     It is EPA policy chat recipients of EPA financial assistance awards utilize
the services of DBEs to the maximum extent practicable.  P.L. 101-507 establishes
a minimum objective of 82 of total contract and subcontract awards.  It is EPA's
policy that such business entities be afforded the maximum practicable opportunity
to participate as contractors, subcontractors, suppliers and otherwise in EPA
awarded financial assistance programs.  This policy applies to all contracts and
subcontracts for supplies, construction, equipment and services under EPA grants,
cooperative -gzeements or loans awarded in FY-91.  For the SRF program, che 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 :o

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                                  - 3 -

encourage recipients and cheir 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 dtsadvancaged individuals are those social!v disad-
vantaged individuals wtv^e ability to compete in Che free encerprise system has
been impaired due to diminished capital and credit opportunities, as compared
to others in the same business area who are not socially disadvantaged.  In
determining the degree of diminished credit and capital opportunities, the
Small Business Administration shall consider, but not be limited, to the assets
and net worth of such socially disadvantaged individuals.  In determining the
economic disadvantage of an Indian tribe, the Snail 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 Deparcment 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 mimama,
methods for encouraging grant recipients and their prime contractors  to
utilize DDEs.

     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 mone>,
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 lover 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  co
meet the minimum 8Z 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 coi.dition 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 selow.

             Programs which primarily place work with institutions of higner
education can achieve their 8% 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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                                 - 5 -

         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
concraccs and subcontracts be placed with OBEs.

         3.  State Grants, Cooperative Agreements and Loans.  States receiving
grants, cooperative agreements or loans must include as a minimum an objective
of 8£ of all extramural funds will be placed with DBEs.

         i.  Local Level Cranes, Cooperative Agreements, and Loans.  Local units
of governments receiving grants, cooperative agreements and loans to local -e-
cipients muse 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&O funds or  any other
Agency funds will have a minimum objective of 82 for DBEs, including HBCUs,  in
the award of prime and subcontracts.  (Except for research awards under the
Clean Air Ace).

         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 nay 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 8Z 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 UBEs.  Additionally,
prime contractors are to Include in their bid documents the1 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 che
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 8X, 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 re7
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,
made In FY-91 must contain a condition requiring recipients to meet the require-
ments of the Act.  Clcacion of the 'Fair Share" objectives for MBEs (Inc*—*ng
HBCUs) and UBEs must be Inserted as veil 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 wl:h the six affirmative steps stated in 40
             CFR §33.240, §31.36(e) or §35.680(a), aa 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 8Z with EPA before the recipient begins the process co
             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 81;

             "The recipient 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 MECOTIATED 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 seeps.  The recipient agrees to require (and to assure
             that the selected assistance recipients also require) that all
             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-33& "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 eIseal 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.  Avard 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 8Z; however, those
States and  recipients who have negotiated a higher percentage in the past  should
be strongly encouraged to maintain the higher level.  Percentage ranges e.g.,  4-9
percent or  6-8 percent etc., are not authorized.

         3.  The (SDBUO) must  provide the Grants Management Offices  (CMOs) with
the negotiated "Fair Share" objective for each State or other recipient at the
earliest practicable date, but in no event later than August  31st  of each  fiscal
year  for the following year.   In addition, the SDBUO will be  responsible  for
the following actions:

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             a.  Ensure chat che Scats or recipient Is fully cognizant of che
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 to report are now required to report in order for the Agency
to determine if It has met the 8Z goal for each EPA-funded program.  No waivers
will be approved for reporting requirements.  Quarterly or annual reporting will be
conducted by using the Standard Form 334.

         6.  The Clean Air Act Research Grants.  The 8 percent goal for the utili-
zation of DBEs in F°A-funded procurement under assistance programs applies to
all programs, except for .:search awards funded under the Clean Air Act.  The Clean
Air. Act Amendments requires a 10Z goal for research programs awarded by EPA for
DBEs.  This requirement will be addressed under separate cover.
2 Attachments

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APPENDIX O

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

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                         SEP 141S92
MEMORANDUM
SUBJECT:  Policy on the Timely Award of Assistance Funds
          for Continuing Environmental  Programs
           Cnginci binned by Harvey Plppea, Jp,
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.  Feldman
     Reading        Grants Management  Offices -   Regions  I-X
     Division       GPPB Staff    GAD Branch Chiefs
PM-216F:RJohnson:RAJ:260-5296:FC 801:Disk - RJ:MEM02.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^d 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  ZV.  6MO  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

      l.    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
                                 WASHINOTON, O.C.  20460
                                JUN261992

                                                                       AOMNMTRATKM
MEMORANDUM

SUBJECT:    A'

FROM:
                            (FM-225)
TO:          Assistant Regional Administrators
             Senior Budget Officers


       This memo is intended  to clarify some of the general poJfcfaa and concepts that
govern funds availability and flexibility in the Agency When a fiscal year begins.  The
"financial environment"  has been rapidly changing over, the-last few yean bom inside
EPA as well as government-wide.  These changes have raised  qpeetkos «to the
fundamental core f*Npftnff{MW*q of the Agency's management of oar flnanrJ«i rwmrvfft
These issues are  extremely complex and highly variable, «**pi^g an '""tf^r*1*^  of
the inter-relationship  of four core funding documents.   TWa mnny pyMfff  SB overview
of the fundamental core responaibilities.  The Budget Division ia comntr/ in the. proceat
of updating the Planning and Budget Manual and the' Fonda Control Manual which wffl
incorporate the more detailed guidance.  As part of this proceat,  I would weioooe
comments  and suggestions  for additional clarifications,  as needed.

Background

      Several recent events have focused our attention on how the division  ia
communicating resource decisions and providing information ""nr^frt  the release 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, The Chief
Financial Officer Act of 1990, Federal  Credit Reform Act of 1990 and the Caeh
Management  Improvement Act of 1990. Second, we have i'mf4rMli1l*f  the Jatnjgajad.
Financial Management  System  (IFMS) within the last few yean which hat nau *
significant impact on the flow of information concerning financial lesources and added
new  responsibilities  for the Responsible Planning and Implementation Officers (EPIOa).

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Third,  a quality  action team was convened by the Office of Wutewtter Enforcement
and Compliance  for the  purpose of addressing State concerns on the grants process.
And firilly, 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 01 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 flnt step in providing some clarification on the general
concepts, controls, and procedure! which make  funds avauabb for obligation.

Availability of Funds

       At any  tune, the funds available to the Agency is governed by four talk
documents:  (1) the Congressional Budget  Justification; (2) the  Appropriation law under
which the  Agency is funded; (3) the OMB  Apportionment;  and (4) the Agency's
approved financial Operating  Plan.  la general, etch document  governs a different  aspect
of the  Agency's cash flow and flexibility.

(1)    Coocnsrtnial Budget Jnatiflnrtten  provide! Coognas ad me Ajimin«»n*H>ii  wfch
       the Agency'i bask blueprint on where we are spending our money, what Mote
       we expect to achieve, and our accomplishments  tor the previous two fiscal JOB*.
       Since OMB and Congrats consider  tail document  to  be the bead of our budget.
       deviation  from it usually require!  action, by cAber Congnas and/or OMB.
(2)   Appropriations Law provides the Agency with the basic
      by Congress. It include* the total level of funds avatiabb within each financial
      account and specific guidance  to the Agency through apedfle aypniuilaHnm
      language, report language,  and other legislate Uatory.  Tbe tew enacts the
      underlying structure  of our appropriations  accounts and CosgnjaiOMl  Budget
      Justification  with modifications spelled out in the legislative history. Tbe Law
      provides both restrictions (account transfers; Travel ceilings; PC4B floors) and
      flexibility (repragramming authority; appropriation  charging).

(3)   OMB Apportionments control the rate at which obligations  can be made by the
      Agency and  in some instance the exact purpose for the ohtigafkws.   UanOy,
      OMB apportions  the Agency's funds by quarter.  There are, howevar, otter cam
      where OMB limia the use of funds either through  a sat aatde On a "category B*)
      or through footnotes  to the apportionment.   One react use of these reerrktkms
      has been  OMB's  establishment  of a clean-up category  in the Supeaftad
      apportionment.

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                                         3

(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
      eApends  funds. The  Operating  Plan is the  document against  which the
      Agency is monitored  for compliance with Congressional and  OMB
      directive*.

      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 flwv**! Operating Plan contained in the Tntyafffd Financial Management
System (IFMS); and (3) the Appropriations Analysis, Bills and Reports digest*

      These sources of information establish spending limits at • detailed level to
ensure compliance with appropriated amounts,  directives,  and guidance  {fr***^ add-
ons and redactions) u 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 govenint the Agency
will take one of two forms:  either an annual  Appropriations  Bffl covering the full year
or & Continuing Resolution that coven  a shorter  period of time.  (If the Apncy has no
Appropriations  Law, the Agency  must  "shut-down" operations which la addressed  by BPA
Order on Actions in the Event of an Appropriations  and/or Debt Getting Htami).  The
status of the Agency's appropriations significantly affects the  level of funds available to
the Agency  and the amount of flexibility with which the Agency can operate.  The
following lays out general principles for the availability of foods under each
appropriation scenario and attempts to  illustrate the interrelationship between the
controlling  documents listed above.

      One  special  note, however, is that the specific rules and conditions under which
the Agency  operate* 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  4rtftrm
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               of Funds Under an Annual Appropriation

      Th;  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 ««P™I 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 ht requirements,  This transmittal
represents a formal  delegation  from the Comptroller  to the BPIOi of the program
responsibilities contained  10 our Appropriations Law  v4 its legislative Ustozy.
       During the interim period prior to approval of the enacted Operating Plan,  the
Operating Plan based on the President's request (Phase AT) is loaded in the QMS. A
guidance «"?p"> based on ****W temporary f^tpy^ ^nrWH is OMB apportionments  is
issued to the RPIOs  on  how to proceed until the Agency hao an approved Qpsatfnf
Plan. We try to provide the "'•«*'*"« amount of funding to alto* DOOM! Afency
operations.  However, RPIOs are advised that the- Opening Plan m IFMS has not been
adjusted  to reflect  Congressional actions or the final ********  distribution of
resources.  Therefore, Agency managers must JM prudent and careful hi msnaitnj their
1st quartet resources that have been  made available in the event that the mudrrVslkrs
reduce the amounts available.

       Once  the Operating  Plan has been approved, the RPIO is notified  through the
normal Advice of Allowance letter.  This letter sets .out the funding  avtflable to the
allowance holders  for that quarter as well as provides  guidance on the llmhsttmu and
flexibilities on the  use of funds (ceilings, floors, reprogramming requirements).

    Availablit
       In recent yean, our annual Appropriation*  Bin has act been enacted by the start
 of the fiscal year,  In this situation,  the Agency begins the fiscal yen under a Coottening
 Resolution (CR).  During this time, the RPIOs are provided- general guidance
 memoranda from the Comptroller  Budget Division on  the roles governing Agency
 operations until we have a full year Appropriations- Law and the nsnttnf  enacted
 Operating  Plan. These raks include,  but are not  limited  to, the use of funds Ibr me
 purposes  for which they wen requested  in the Congressional Budget JmUnminn, torwefl
 as the restraints included  in the  Continuing Resolution, as written by Congress, sad
 OMB's Apportionment  of the Continuing Resolution  funds.

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                                         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 provide! 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 teve)
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 cue 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 Aeftadbflfcy
U laid oat in the Agency's Appropriation  Law.  For example, the Agency is allowed to
rcprogram funds up to a certain level ($500,000 for FY 1992) between programs in (he
operating plan.

      Another example of flexibility is in the quarterly apportionments by OMB.
Doting the development of the Operating Plan, the snlfrlpalHl qesBtndjr  sptni an
equally applied to every program element in the appropriation.  These mfrHiieil
quarterly splits to resources may be adjusted, however, fo obtain desired ***tiflltT *•&•
as long as the quarterly  split at the RFIO level  for that ayjffopfisrtnri
       Flexibility is, therefore, within the limits established in the Jmffllfsrinn.
Appropriations  Law, and the OMB Apportionment.   The situations and variables are far
to numerous  and complex to set out specific guidance in this memo.  The UttrhmmT to
this memo gives one specific case example.of flexibility within our Hmtaltans  Within
these limitations, the Agency doc* maintain a signhVant amount of flcodbtttty hi ftndbf.

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 goidenoe
you believe would be helpful to you in managing the Agency's resources.  Please dbect
your comments and inquiries to Delia Scott, Chief, Formulation end Control Bntoch, at
260-1176 or Becky Fredericks, Chief, Management  and Pottcy Staff, at 260-2470.

Attachment

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                                 ATTACHMENT

CASE EXAMPLE
       The Agency begins the  year on a Continuing  Resolution (CR)  for 3G days which
provides  us with an automatic  apportionment  for 30/36SUis or approximately 8% of etch
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 HI Operating Plan (OPLAN)  which is awaiting action to incorporate
Congressional  add-ons and reductions following eni
      How do Agency managers  operate under this scenario?

      In terms of the four funding documents  needed,  we have two at this point..a
limited Appropriations  Bill (CR) and the (automatic CR) apportionment  Ite fun-year
Appropriations  Bill  based  on the Congressional Budget Justification, and the Opeating
Plan, are still pending.  Funds are now available, however, as is guidance and flexibility.

      The Comptroller/Budget  Division issues a sedes of status tad guidance
memoranda  (or EMAIL) providing aa much specific uiroraatiufl tad genaal finding
guidance as is available  to EPA.  Among other features, this guidance linu stresses:

      1. Caution  pnd prudent ftt*|t*ffffBfnt

      2. Availability of funds (CR percentage)   at the Appropriatioo/Allowaiice  Bolder
total level for each RPIO/Region.  Allowance  Holders  an not bald to lower
program element/object  class level during a CR,

      So, even under the  most restrictive (CR) circumstances,  matmMffl rsgbflfr is.
being  provided  within the  total  pool of resources available for the
fund the highest priorities  based on their own detcnmnatioa.
or an AC&C grant to a particular State  is the highest priority, then the (HietMiiflity  tot
obligation is in place.
END  OF THB c^ - As soon as the CR is ended (usually during die first onaitsr)  by the
enactment  of EPA's Appropriations  Bill and signature by the President, the ftdl year
Phase m Operating  plan is loaded into IFMS and guidance  to obligate cantfoustjr white
Congressional  add-ons and reductions  are  impkorated  is issued.

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      Now that a full year's appropriation  is enacted, (he 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 Tint 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
disj"t>poriionately  "from loaded' in the  1st quarter apportionment  to allow Program
uinces to fund Priorities (such  as grants   .n the  1st quarter should they choose  to do
curing the phases of Operating  Plan development.

CONCLUSION

      In 'erras of proper budget planning, the following  steps by the Program Offices
will allow for priority  items to be funded in the first quarter
      A. BafioMi diarihutiona  of the Pies. Budget resources  have been made by the
National Program Manager and  incorporated into the OPLAN.

      B. Priority items  (such as grants) have all beta budgeted in the  1st quarter
OPLAN by the RPIO during Phase m.

      C. RPIOs begin the obligating paperwork for the priority terns ai soon as the
year begins so it is ready to go as soon as sufficient rands in.
       D» CO^BBUQBCfltS JffS CtttftPPO - OlOJDOClY ftfl tQQfl AS IDO ^^DDVODKUHDOBS
signed and  IFMS is open.

       B. Obligating  documms are promptly forward>3 to Oaatt Offoea, Cootttcti
Offices, etc. for obligation.

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APPENDIX P

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           APPENDIX P
STATE GRANT GUIDANCE, "INTEGRATION
     OF POLLUTION PREVENTION"

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11/1S/92   11:51   ®202 252 0516
                      OCLA/OLA DIV
                                   ---. EPA'G
                UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                           WASHINGTON. D.C. 20460

                               NOV  1 2 1992
                                                        THEADMWSTW
                                                  LTOH
    HBMORMTDUM

    SUBJECT:
state Grants Guidance:   integration of Pollution
Prevention

F. Henry Habicht iiY/S
Deputy Administrate

Assistant Administrators
Regional Administrators
    JTKOM:
    TO:
         Attached is the new Agency-wide Guidance
    pollution prevention into EPA'c 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
    develop this Guidance.   The document reflects the many
    constructive comments provided by Agency headquarters, Regional
    Offices, and State governments.  In response to those comments
    the final product is shorter,  tighter, and IRRS prescriptive  in
    tone.

         With this Guidance in hand, the Agency nap now mov** rjuidely
    to develop specific Guidance documents for our individual
    grant programs in concert with our State partners.

    Attachment                            x'**-*  •
                                                     Printed on Raeydod Pae^f

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11/18/92   11:54    Q202  252 0516 .       OCLA/OLA DIV    -— EPA/GAD             $003
                UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                           WASHINGTON, D.C. 20450

                              NOV I 2 1992
   KEHORANDDM
   OFFICE OF
THE ADMINISTRATOR
   SUBJECT:   State Grants Guidance:  Integration of Pollution
              Prevention

   PROM:      F.  Henry Habicht
              Deputy Administrator

   TO:        Assistant Administrators
              Regional
         This memorandum announces the Agency-wide pollution
   prevention Guidance, beginning with the FY'94 State grants 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 simple accounting process to share
              information on successful State projects, and identify
              statutory or other barriers to funding State proposals;
              and

         •    Building sustained State capacity in pollution ,
              prevention to the extent consistent 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 Recycled Paper

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     11 55    S202 252 0518        OCLA-OLA DI\     — EPA-'GAD            .0004
     In general,  this Guidance applies to all of the Agency's
media-specific State grant programs, but particularly to the
following: Clean  ALr 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 §3i9(h)—Non-point Source Management.

       Building on the Agency's many successful pollution
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 developed 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 for funding
through the grant programs.  In addition, Regional Offices should
take the initiative to suggest pollution prevention approaches,
drawing upon program-specific Guidance and implementation
workshops.  Regional Offices and states are expected to use their

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11'18'92   11-55    ®202 252 0516         OCLA'OLA DIV    --.-. EPA'GAD
    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.

    3)  The workplan -.ncorporates pollution prevention as a priority
    in environmental management decisions made by the grantee as part
    of the grant-assisted activities.

    4)  The workplan encourages opportunities to modify existing or
    to develop new equipment, technology, processes, procedures,
    products, or educational or training materials to promote
    pollution prevention.

    5)  The workplan encourages institutional coordination—including
    coordination with existing State pollution prevention programs—
    and multi-media opportunities for pollution prevention.

    6)  The workplan complements or builds upon existing EPA
    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) .

    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).

    8)  The workplan includes activities or approaches that muy serve
    nationally as innovative models for other state or local
    programs.  Workplans also should encourage innovative approaches
    already developed by other state or local programs, and improve
    coordination to build on existing successes.

    9)  The workplan structures grant output information so 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 requirements and tahe into account other factors
    that may be important.  Regional Offices and States may identify

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ll'18/92   11 56    ©202  252 0516         OCLA'OLA DIN     --- EPA'GAD            3'JOt5
                                    4

    additional Principles to guide workplan requirements.

                               Flexibility

         Many Regional Offices already have made adjustments to
    accommodate flexibility needs.  The purpose of this Guidance is
    to encourage such flexibility.  Whenever possible,  vorkplans
    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 Cample, (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, which
         allows disinvestment from national priority activities and
         re-investment in Regional or State priorities: up to 25% of
         enforcement resources in FY'92 and '93.
           —An example of (2) is being tested in Region One with
         Massachusetts1 Blackstone project.  The Key issue is how 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  Accomplis^*insii't Report

         To allow EPA to evaluate progress in integrating pollution
    prevention into State grant programs, each Regional Office should

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11/18/92   11:58    ®202 252 0518         OCLA'OLA DIV     — EPA/GAD            0007
    provide an annual report summarizing pollution prevention
    accomplishments  (e.g. activities, products, approaches/ etc.)/ as
    reflected in grants-assisted work.  The report may take any form
    and may draw upon reports developed to satisfy other
    requirements.

         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 Principles and
    Annual Reports described above will help us to measure our
    progress and build on our successes.

    Attachment

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APPENDIX Q

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       APPENDIX Q
SF 424, "APPLICATION FORM"

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                                                                                                                                            OMB Approval No 0348-004]
APPLICATION FOR z. DATE SUBMITTED Appucam menuier
FEDERAL ASSISTANCE
1. TYPE OF SUBMISSION:
Appecafiori
LJ Construcinn
Q Non-Consiruaion
3. DATE RECEIVED BY STATE Slate Appicaton oentider
Pre-anptairen
LJ Cvrairuaion 4 DATE RECEIVED BY FEDERAL AGENCY Faaeraiic«rtii«r
n Non Consinicton


S APPLICANT INFORMATION
Legal Na>ne
Address (goo ay county, slate, and n> code;
6, EMPLOYER IDENTIFICATION NUMBER (EIN):

a TYPE Of APPLICATION
If RevBon. enter appropriate letter
A. Increase Award
D Decrease Duration
—
] New Q Continuation Q Revision
(S)n bo»i.es) Q '~~l
B Decrease Award C Increase Duration
D Other (tpecly)
10. CATALOG OF FEDERAL DOMESTIC _
ASSISTANCE NUMBER:
TITLE

12. AREAS AFFECTED BY PROJECT (aUfm. cmnMe. (MM. «ic;
11. PROPOSED PROJECT:
Organizational Un>
Name and telephone nurroer ol me person 10 be contacted on matters involving
the appicaton fgive area code;
7. TVPE OF APPLICANT (inter appropriate totter in boi) . I I
A. Stale H Independent School Dm
B County 1 Stale Controlled Instiiuion of Higner Learning
C Munceal J Private University
D Townshp K Indian Trbe
E Interstate L IndrvOual
F Intermuncoal M Prol« Organization
G Soeoal District N Oiher (Specify)

9 NAME OF FEDERAL AGENCY
1 1 DESCRIPTIVE TITLE OF APPLICANTS PROJECT
14. CONGRESSIONAL DISTRICTS OF:

Start Date EndngDate a. Applcant b Proied
IS. ESTIMATED FUNDING:
a. Federal $
b Applicant $
c Stale t
d Local t
» Other I
I Program Income t
g TOTAL »
IB. IS APPLICANT SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 12372 PROCESS?
a. YES THIS PREAPPLICATION/APPLtCATON WAS MADE AVAILABLE TO THE
STATE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON
00
DA
00 |-
b NO |_
rE

2 PROGRAM IS NOT COVERED BY EO 12372
00
1 1 OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW
00

00 17. IS APPLICANT DELINQUENT ON ANY FEDERAL DEBT?
00 II Yes If "Yes." attach an eiplanation 1 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 ol Authorized Representative
c Telephone nurroer
e Date Signed
Previous Ednons Not UsaMe
                                                                                                                                           Standard Form 424  (REV 4 88)
                                                                                                                                          Prescribed Dy OMB Circular A 102

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BUDGET INFORMATION - Non-Construction Programs °MB Appr°vs" N° ^^
SECTION A - BUDGET SUMMARY
Grant Program
Function
or Activity
(a)
1.
2.
3.
4.
5. TOTALS
Catalog of Federal
Domestic Assistance
Number
(b)





Estimated Unobligated Funds
Federal
(c\
$



$
Non-Federal
(d)
$



$

Federal
(e)
$



$
New or Revised Budget
Non-Federal
r Hi




$
Total
(a)
$



$
SECTION B- BUDGET CATEGORIES
6. Object Class Categories
a. Personnel
b. Fringe Benefits
e. Travel
d. Equipment
e. Supplies
f- Contractual
g. Construction
h. Other
I. Total Direct Charges (sum of 6a - 6h)
I- Indirect Charges
k. TOTALS (sum of 61 and 6J)
mmmm^m
7. Program Income
GRANT PROGRAM. FUNCTION OR ACTIVITY

$









$
$

$









$

$









$
$

$









$


$









$
MH
AUTHORIZED FOR LOCAL REPRODUCTION
   Standard t-orm 424 A (4-08)
Proscrfeod by OMBCvcutar A 102

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SECTION C - NON-FEDERAL RESOURCES
(a) Grant Program
8.
9.
10.
11.
12. TOTALS (sum of lines 8-11)

13. Federal
14. Non-Federal
15. TOTAL (sum of lines 13 and 14)
(b) Applicant
$



$
(c) State
$



$
(d) Other Sources
$



$
(e) TOTALS
$



$
SECTION D - FORECASTED CASH NEEDS
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
S



$
SECTION F - OTHER BUDGET INFORMATION
(Attach additional Sheets H Necessary)
21. Direct Charges:
22. Indirect Charges:
23. Remarks
         SF 424 A (4-88) Pag* 2
Prescribed by OMB Ocular A-102

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APPENDIX R

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           APPENDIX R
LIST OF HEADQUARTERS AND REGIONAL
      MBE/WBE COORDINATORS

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 RlfilfiN -I

 Josiah N.  Pripp,  SDBUO

 Jame»  Younger,  SDBun
U.S. Environmental  Protection Ayency
Region  I
John P. Kennedy  Federal Building
One congress Street
Boa con, MA  0220}
       II
Dana P. Williams, SDBUO
U.S. Environmental protection Agency
Region II
Jacnh K. Javitta Federal Building
25 Federal Plaza
New York, NY  10278
Mary 7telinski, SOBUO


U.S. Environmental Protection Agency
Region III
841 Chestnut Building
Philadelphia, PA  19107

MGIOM IV

Jamas P. Favoro, SDBTin
U.S. Environmental protection Agency
Region IV
345 Court land Street, NE
Atlanta. GA  30365
Robert Richardson, SDBUO


U.S. Environmenr.al Protection Agenry
Region V
77 west Jackson Boulevard
Chicago, IL   60bO«-3507
     (£17) 565-3289
PAX  (617) b65-3346
     (617) 565-3427
FAX  (C17)
                                             PAX
                                             PAX
                                             PAX
     (212)  7A4-B218
     (212)  264-8100
     (215)  597-6795
     (215)  597-6170
     (404)  347-22UO
     (404)  347-1043
     (31?) J53-56-V
PAX  (312) 353-9096

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 MfllQB VI

 Reta J.  Brown,  SDBUn                               (214) 6SS-74UV
                                                   Ui4) 655-2146

 U.S. Environmental  Pror action Agency
 Region VI
 First  interulate Bank Tower at Fountain Place
 12th Floor, Suite 1200
 1445 Ross Avenue
 Dallas,  TX  75202-2733

 BBfllOM VII

 Kmajo  May berry, SDBUO                              (913) 4S1.7U8
 Carol  Rompage,  
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CINCINNATI PHD

Norm Whitft, SUBUO
U.S. Environmental  Protection Agency
Cinr.innacl Cunti-acts Management Division
Cincinnati, OH   45268
pflDBP  (A-149C)

rc«orge K. Mori
Rebecca D. Ncer
           (os 200)
Jan Baker
fltata Revolving Fund  (WH-547)

XI i. Farber
                       (PM-216F)
T.npe saldana, SDBUO
Richard Johneon
                 (LE 132G)
Mark Gordon
                                              FAX
     019;
     (9191
366-2024
366-2004
     (703)  305-6301
     (7m)  JUb-5023
WVX  (703)  305-C4C2
     (202) 260-2180
PAX  (202) 260-4386
     (202) 260-3973
FAX  (202) 260-0116
     (202) 260-b245
     (202) 260-5296
FAX  (202) 260-1828
                                             FAX
     (202) 260-8886.
     (202) 260-8392

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APPENDIX S

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         APPENDIX S
OFFICIAL PROJECT AND GMO FILES

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                 OFFICIAL EPA PROJECT FILE

Project File: The official file developed and maintained by the Project Officer to serve
as a collection of documents and or items that provide programmatic and/or fiscal
information on the purpose, performance and history of an award to a sepcific
recipient.

      Contents:

      Parti

           1) Copy of application and any application amendments with
           Work Plan/Budget (copy)

           2) Administrative Review Checklist signed by the Grants
           Specialist and the Project Officer  (copy)

           3) Quality Assurance documentation

      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

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            2) Correspondence concerning negotiations and agreements
            3) Recipient requests for deviation;  EPA approval or denial
            4) Correspondence concerning continuation or renewal of
            project
            5) Site visit reports
            6) Administrative reports
            7) Stop-work order and related correspondence
            8) Correspondence concerning termination actions
            9) Correspondence concerning disputes and appeals
            10) Final determinations
            11) Audit reports
            12) Regional and General Counsel opinions
            13) End of year evaluation
      PartV
            1) Reimbursement requests (copy)
            2) Payment vouchers (copy)
            3) Financial Status Reports (copy)
            4) Automated Clearinghouse Authorization (copy)
            5) Increase and decrease amendments (copy).
            6) Close-out checklist/memo (copy)
            7) Commitment Notices (copy)
      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.

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      2)  Payment vouchers
      3)  Financial Status Reports
      4)  Automated Clearinghouse Authorization (ACH)
      5)  Increases and decreases
      6)  Close-out check list
      7)  Commitment Notices
Part VI
            Funding recap

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                        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)  Appltiation reviews, in-house and extramural (copy)
            3)  Programmatic reviews (copy)
            4)  Program memo regarding funding recommendation (copy)
      Part III
            Assistance Agreements and any amendments (a .copy of agreement
            should be retained until a signed original is returned, by the
            recipient)

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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

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APPENDIX T

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         APPENDIX T
CLOSEOUT POLICY FOR ASSISTANCE
         AGREEMENTS

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                             AUG 2 7  1992
MEMORANDUM
SUBJECT:  Final Closeout Policy For Assistance Agreements
FROM:
TO:
                                          ~
          Harvey G. Pippen, Jr., Directo£*~c-
          Grants Administration
          Assistant Regional Administrators
          Grants Management Offices
          Regions Z-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 youi .*n specific Regional
K* 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 II:     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.  Superfimd

                C.  Construction Grants



Part IV:     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.

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2.     Ensure that any/all deliverable; required under the award are received when required by
       the award, and are acceptable.

3.     Certify to the GMO within 90 days of completion of the project that all work has been
       satisfactorily completed.  For continuing programs, specific work elements  may be
       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 end  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 ^ased :-n  the provisions of
              the assistance agreement  and the final negotiated  indirect cost rate;

       o      determine amount, of any unliquidated  obligations and/or funds owed to EPA by
              the recipient and provide instructions to the FMO for the disposition  of those
              funds.

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                                         5

4.    Request final audit (if applicable and required for closeout)

5.    Prepare ciose-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 recipier  for any funds Hue EPA;  establish  an accounts
      receivable if appropriate and perform follow-up collection efforts.

3.    Make necessary entries to IFMS for any 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

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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 (MS)

                            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 Days 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 Days after Completion

       The recipient will submit final progress (technical) reports to the Project Officer 90 days
       after the project's completion or end date, whichever comes first and notify the GMO of
       their receipt and acceptability.   Other reports, including the  final Financial  Status
       Reports, are also due within 90 days, and should be submitted to the Grants Specialist.
       The Grants Specialist will then review those projects that have overdue reports (over 90
       days) and determine whether another followup letter should be sent to the recipient. This
       letter must be tailored to address specific deficiencies of the project, e.g., what required
       deliverables were not received and are overdue?  A copy of this letter should also be sent
       to the FMOVPO.

       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 Days after Completion

       Closeout should be completed within 6 months (180 days) after the end of ihe agreement
       When closeout has been completed, the Award Official should provide the recipient vnt
       the closeout letter or a letter of final determination, with ccpies to the  FMO and PO
       (See Disputes Section in Pan V)

Part HI:   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 [C WA
Title VI, §606(e)], and by receiving audits of the program  [CWA Title VI,  §606(b)l.   If.
however, a State is found to be out of compliance with any part of Title 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 gram, the GMO,  m
conjunction with the Project Officer  (the SRF Coordinator) would follow the requirements  as
specified in Part 0.
       B. Superfund

    The following are the additional steps each GMO must follow in closing ou  a Superfund
Cooperative Agreement.   Superfund recipients are usually States,  Political Subdivisions,  or
Federally Recognized Indian Tribes, and the closeout procedures in this section r.piy to th  >e
    'For example, a Region may decide to closeout a capitalization gran' before *n equivalency
project has met all of its equivalency requirements [Sixteen Title C inquire...ien'; 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:
  Re-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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                                          10

    For a Superfund site-specific CA, if the CA is terminated when a responsible party takes
over the cleanup or the lead changes from State to EPA, the CA should be closed out and any
unliquidated obligations balance should be de-obligated.

       A Superfund Core Program cooperative agreement provides funds to a State or Indian
Tribe to conduct CERCLA implementation activities that are not assignable to specific  sites, but
are intended to  support a State's (or Indian Tribe's) ability  to participate in the CERCLA
response program.  In the Core Program, the CA is closed out when the activities identified in
the scope  of work are completed.  Likewise for Enforcement, Support Agency, or  Removal
cooperative  agreements.  When all required work as  specified in the scope of work  has been
completed, the CA should be closed out. To close out a Superfund CA, the GMO and  PO must
follow the requirements specified in Part IL
       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/CLOSEOirr MILESTONES
        Physical Completion: When the scope of the work is completed.  For Steps 1 & 2,
        project completion and physical completion are synonymous. (For steps 2 + 3, 3, 7 & 9
        project completion, physical completion, and construction completion are synonymous.)
         Initiation of Operations (IO):  When the wastewater treatment works becomes capable of
         operating for the purposes planned, designed and built.  (Steps 3, 2+3, 7 & 9)
         Project Performance Certification: One year after IO, the grantee certifies that the
         treatment facility is meeting project performance standards. (Steps 3, 2+3, 7 & 9)
         Please note that the project cannot be sent to audit until the certification is received.

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                                           11

        Administration Completion:  All administrative aspects of the project have been
        completed, final payment has been requested, eligible costs have been determined, all
        grant conditions have been satisfied and the audit has been requested.  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.
•••NOTE-"-

       The time between physical completion and administrative completion can be no less than 14
months because the project performance certification period is one year after physical completion and
initiation of operations. The project can not be sent to audit until after project certification.  If the IG
accepts the project for audit, it may be 24 months before the final audit report  is issued.

PART IV: RECORD RETENTION REQUIREMENTS

    EPA's Uniform Administrative Requirements  for 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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                                         12

       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 27S0.2A (Management of EPA Audit Report* - .d Followup Actions) states 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 QOJ;  receive
individual final audits.  A final audit is usually not  a prerequisite for clos^owt.

       All Superfund Cooperative Agreements are subject to audit by the Gffior 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 res-tofu-* 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 Pan 31 Subpart F applies.  Disputants may
not ask EPA to review the following Agency actions:
       1. Denials of requests for a deviation under 40 CFR 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 Part V Audit Section). Inadequate
or incomplete audit  resolution can  increase  the number  of disputes  filed by recipients.
Unresolved disputes further delay closeout of the award  until the action or claim is settled.

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                                        15

                                   APPENDIX A

LISTING OFEXISTING EPA CLOSEOUT REGULATIONS, POLICIES, AND RELATED
GUIDANCE

(1)   40 CFR Part 4 (Uniform Relocation Assistance), or 49 CFR Part 24 if applicable;

(2)   40 CFR 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-l 10 (Grants and Cooperative Agreements with Institutions of Higher
      Education, Hospitals and Other Nonprofit Organizations), A-133 (Audits of Institutions
      of Higher Education and Other Nonprofit Institutions),  and A-21  (Cost Principles for
      Universities;

(12)   OMB Circulars  A-87 (Cost Principles for State and  Local Governments) and A-122
      (Cost Principles for Nonprofit Organizations);

(13)   Policy on Performance-Based Assistance  (EPA policy  memorandum dated  May 31.
      1985);

(14)   Comptroller Policy Announcement No. 88-09 (Disposition of Unobligated Balance of
      Assistance Awards);

(15)   EPA Directive 2750 (Management of EPA Audit Reports and Follow-up Actions).

(16)   Chapter 40 of EPA's Assistance Administration Manual

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                                        16

(17)   Construction grants Program For Municipal Wastewater Treatment Works Handbook cf
      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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                                         17

                                   APPENDIX B

  GICS DATA ELEMENTS FOR CLOSING OUT NON-CONSTRUCTION GRANTS

      GICS contains a series of data elements used to track grant closeout.  This appendix
      provides definitions and applicable codes for the most commonly used data elements.
      Note:  not all closeout data elements are available in RAGDS, FADS, or JAMS. It is
      CAD'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 this code is  contained in Final Financial
      Status Report Date (Ref No  M5-A, Financial-Status-Date).

      For purposes of Closeout the following codes are applicable:

      DE   Financial status report approved; FMC, Las Vegas requested to deobligate
      DR   Financial status report approved; EPA owes recipient;  Recipient advised to draw
             down
      NA   Not applicable to this project/budget period
      OU   Financial  status report approved; Recipient owes  EPA; Requested to  submit
             refund or adjust letter of credit
      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
      Pite (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
REAL-PROPERTY-CODE/DATE

      A code indicating the status of the real property inventory purchased under a grant. The
      date related to this code is contained in Real 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/j 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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                                        19

      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


FINAI^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 cnu ha 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 dement 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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                                         20

       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  program
             administered in Headquarters.

       FT    Assistance terminated by EPA before completion. Termination letter sent front
             Grants Operations Branch or appropriate Regional grants a&.'iiustnrion staff to
             the recipient.

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                                       21

         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 01* certain activities
            such as WWT Stan, 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.

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APPENDIX U

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        APPENDIX U
PERSONAL PROPERTY UNDER EPA
   ASSISTANCE AGREEMENTS

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  PERSONAL PROPERTY
UNDER EPA ASSISTANCE
     PROJECTS

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    PERSONAL PROPERTY
  UNDER EPA ASSISTANCE
        PROJECTS
       Table of Contents
                      Page (s)
  Universities and Non-Profits    1
  State Governments          2
  Local Governments          3-4
'  All Other Recipients          5-7

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        PERSONAL PROPERTY UNDER EPA ASSISTANCE PROJECTS

  NON-PROFIT INSTITUTIONS OF HIGHER EDUCATION conducting basic
  or applied research and NON-PROFIT ORGANIZATIONS whose primary
  purpose is the conduct of scientific research  [40 CFR Part 30]
A.     Purchase

       i.     The recipient may purchase personal property if authorized to do so
             in the assistance agreement.

       2.     If a piece costs $10,000 or more  the recipient must receive the
             Award Official's prior approval.

       3.     Title is vested  In the recipient subject to the following:

             a.      EPA may reserve the right to transfer title for property with
                    an acquisition cost of $1,000 or more to  the Government or
                    a  third party any time within the life of me project or within
                    120  days after project completion.  EPA must identify this
                    property in the assistance agreement or otherwise in writing.

             b.     If  EPA does not reserve the right to transfer title, the recipient
                    has  no  other obligations or accountability to EPA.

B.     Disposition

       1.     Non-expendable personal property with a unit acquisition cost of less
             than S1.000

             a.     The recipient has no accountability to EPA.

       2.     Non-expendable personal property with  a unit acquisition  cost of
             greater than $1.000

             a.     If EPA reserves the right  to  transfer title to the  Federal
                    Government or a third party

                    1)     EPA must instruct the recipient to ship the  property,
                           and;

                    2)     EPA must reimburse the recipient for its proportionate
                           share of the fair market value of the property, plus
                           reasonable shipping and storage costs.

        3.     Expendable personal property

              a.    The recipient has no accountability to EPA.
                              Page I

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        PERSONAL PROPERTY UNDER EPA ASSISTANCE PROJECTS
              STATE GOVERNMENTS [40 CFR Part 31]

A.     Title

       1.     Title to equipment is vested in the recipient subject to the following:

             a.     EPA may reserve the right to transfer title for property to the
                    Federal Government or a third party any time within the life
                    of the project or within 120 days after project completion.
                    EPA must identify this property in the assistance agreement
                    or otherwise in writing.

B.     Use, Management and Disposition

       1.     A State will use, manage, and dispose of equipment acquired under
             assistance in  accordance with State laws and procedures.

       2.     When title to  equipment is transferred, by EPA, the recipient shall
             be  paid  an  amount  calculated  by applying the percentage  of
             participation in the purchase to the current fair market value of the
             property.

C.     Supplies

       1.     Title to supplies acquired under an assistance project will ve.it, upon
             acquisition, in the recipient.

       2.     If there is a residual inventory of unused supplies exceeding  $5,000
             in total aggregate fair market value upon termination or completion
             of the award, and the supplies are not needed on other Federally
             sponsored activities,  the recipient shall compensate  the awarding
             agency for its share.
                               Page 2

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A.
  PERSONAL PROPERTY UNDER EPA ASSISTANCE PROJECTS

        LOCAL GOVERNMENTS [40 CFR Part 31]

Title

1.     Title to equipment is vested m the recipient subject to the following:

       a.     EPA may reserve the right to transfer title for property to the
             Federal Government or a third party any time within the life
             of the  project  or within  120 days after project completion.
             EPA must identify this property in the  assistance agreement
             or otherwise in writing.
B.
Use
       3.
       Equipment shall be used by the recipient in the program or project
       for which it was acquired as long as needed, whether or not the
       project or program is supported by Federal funds.

       When no longer needed for the original program or project, the
       equipment may be used in other activities currently or previously
       supported by a Federal agency.

       The recipient must follow the Property Management Standards of 40
       CFR 31.32 (d).
       Supplies

              Title to supplies acquired under an assistance project will vest upon
              acquisition, in the recipient.
 1.
        2.     If there is a residual inventory of unused supplies exceeding $5,000
              in total aggregate fair market value upon termination or completion
              of >se award, and the supplies are not needed on other Federally
              sponsored activities, the recipient shall compensate  the awarding
              agency for its share.
                                Page 3

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        PERSONAL PROPERTY UNDER EPA ASSISTANCE PROJECTS




              LOCAL GOVERNMENTS [40 CFR Part 31J

D.    Disposition

      1.      When original or replacement equipment is no longer needed for the
             original project  or  program  or  for  other cctivities currently or
             previously supported by a Federal agency:

             a.     items of equipment with a current per-unit fair market value
                   of  less than  $5.000 may  be retained, sold  or otherwise
                   disposed  of with no further obligations to EPA.

             b.     Items of equipment with a current per-unit fair market value
                   of SS.OOO or more  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 EPA's share of the equipment

             c.     When title to equipment is transferred, by EPA, the recipient
                   shall be   paid  an  amount  calculated  by  applying  the
                   percentage of participation in the purchase to the current fair
                   market  value of the properly.
                               Page 4

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A.
  PERSONAL PROPERTY UNDER EPA ASSISTANCE PROJECT*

       ALL OTHER RECIPIENTS [40 CFR Part 30J

Purchase
       1.


       2.


       3.
B.     Use

       1.
      The recipient may purchase personal property if authorized to do so
      in the assistance agreement

      If a piece costs  $10,000 or more  the recipient must receive the
      Award Official's prior approval.

      Title is vested in  the recipient subject to the following:

      a.     If the acquisition cost is $10,00 or more, the recipient must
             assure that  EPA's  interest  is  adequately  reflected and
             protected  in compliance with all recordation or registration
             requirements of the Uniform  Commercial Code.

      b.     The recipient must follow the Property Management Standards
             01  40 CFR 30.531.

      c.     EPA may  reserve the right to transfer tide for property with
             an acquisition cost of $1,000 or more to the Government or
             a third party any time within  the life of the project or within
             120 days  after  project completion.   EPA must identify  this
             property in the assistance agreement.

      d.     The recipient must follow disposition requirements of 40 CFR
             30.532.
       For all personal property purchased  with  assistance funds,  the
       recipient must adhere to the following:

       a.     The property must be used in the EPA project for which it
             was acquired as long as needed, whether or not the project
             continues to be supported with  EPA funds.

       b.     If it is not needed on the original project the property can be
             used on other EPA project.

       c.     If the recipient does not have other EPA projects the recipient
             may use the property for other Federally-funded projects.
                              Page  5

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        PERSONAL PROPERTY UNDER EPA ASSISTANCE PROJECTS

              ALL OTHER RECIPIENTS [40 CFR Part 30]

C.     Disposition

       1.     If EPA reserves the right to transfer title of any non-expendable
             personal  property with a unit acquisition cost of greater than $1,000
             to the Federal Government or a third party;

             a.     EPA must instruct the recipient to ship the property, and;

             b.     EPA must reimburse the recipient for its proportionate  share
                    of the fair  market value of  the  property,  plus  reasonable
                    shipping and storage costs.

       2.     If the recipient wishes to use the property on other than Federally
             funded activities, it must follow these rules for disposition:

             a.     Non-expendable personal property with a unit acquisition cost
                    of less than $1.000

                    1)    The  recipient, except for a profit maker, may keep the
                          property or sell  it and keep the proceeds.  There is
                          no further accountability to EPA.

                    2)    If profit making organizations keep the property or sell
                          it they must reimburse EPA for its proportionate share
                          of the current fair market value.

             b.     Non-expendable personal property with a unit acquisition cost
                    of $1.000 or more

                    1)    The recipient may  keep the property, provided they
                          compensate  EPA for its proportionate share of the
                          current fair market  value.

              c.     Expendable personal property  with a  total  aggregate fair
                    market value of $1,000 or more

                    1)     The recipient may keep the property or sell  it if EPA
                           is reimbursed for its proportionate share of the current
                           fair market value.
                                 Page 6

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        PERSONAL PROPERTY UNDER EPA ASSISTANCE PROJECTS



             ALL OTHER RECIPIENTS [40 CFR Part 30]

C.    Disposition (continued)

      3.     If neither the recipient nor EPA has a need for the property, EPA
             must  report  the  fact to the General Services Administration  to
             determine whether a need exists in another Federal agency.

             a.     if  a need  exists elsewhere, the recipient will be instructed
                   where to ship the property and will be reimbursed for its
                   proportionate  share, plus  reasonable shipping and storage
                   costs.

             b.     If  the property is not needed elsewhere, the recipient must
                   sell it and reimburse  EPA for its proportionate share of the
                   sales proceeds less any reasonable handling expenses.
                              Page 7

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APPENDIX V

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            APPENDIX V
EPA ORDER 2200.4, "REVIEW PROCESS FOR
   SCIENTIFIC, INFORMATIONAL AND
      EDUCATIONAL DOCUMENTS"

-------
 ENVIRONMENTAL
 PROTECTION       TRANSMITTAL
 AGENCY
2200.4
                                               Decanter 28. 1«»82
	PUBLICATIONS AMD COMMUNICATIONS MATERIALS - GENERAL

MATERIAL TRANSMUTED:


EPA Order Mo. 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.
                                     P. Morton
                      Assistant Administrator for Administration
 Dw:
     Directives

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 ENVIRONMENTAL


 PROTECTION                ORDER                   22004


 AGENCY



              PUBLICATION AND OOnrUffllCATIOTC MATERIALS - GPIRRM.


       REVIEW PROCESS FOR sciorriFic,  piFORfwrinriAL AND EpncATiQHAL


  l.  PURPOST.

      a.  This Order establishes Agency policy on reviewinq  scientific, infor-
  mational or educational materials.   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 enqender 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 rlocunent
  will not be construed as constituting any suggestion of constraints on the
  fme expression of Agency employees.

      c.  This Order is  intended to supplement other applicable guidelines and
      •nendations, and supersedes other directives only to the  extent that it
   inconsistent with then.  Any program area or office may adopt procedures consistent
  with this Order to meet its specific needs.

   2.  oogjrrorrs SUSTECT TO RT/IEW.

      a.  "tie 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, gr?ntee or consultant with the excep-
   tions of:

          (1)  Congressional testimony;

          (2)  verbatim testimony from hearings;

          (3)  Advance Notices of Proposed Rulemakings (AlTPRM's), proposed or
   final regulations subject to a formal comment period;
Oist:   directives Distribution                                        Initiated by

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                                                               2200-4
         (4)  pro«w releases approved by the Office of Puhlic Affairs within
the office of  the Administrator;
              legal opinions, briefs or memoranda, including initial, final,
or other decisions in quasi-judicial administrative proceedings;

         (6)   Pederal Rpiister Notices;

         (7)  ftotices of Puhlic Hearinqs;

         (8)  t quest for Proposals;
             cuhlications hy EPA employees proposed for scientific journals
which incorporate peer review (inclusion of a disclaimer statement is apnro-
nriate when policy issues are incorporated in the article);

       (in)  Criteria Documents or other similar documents subject to
A for~wl puhlic comment period or review hy the Science Advisory Board or
the Vience Advieorv Panel;

       (11)  advisory cormittee statements and reports;

       (12)  materials Generated on an employee's own time usinq private
facilities:

       (13)  'internal policy statements or memoranda; and

       (14)  official Anency correspondence.

3.  \PPLlCAniLITY.  Wese Guidelines are applicable to ercloyecs acting in an
official camcity rt!?«-ed to their wnrk for the Anency.  Ttiey are also applicable
to HPA contractors, consultants, and grantees to the extent provided for in
thoir aoreo-npnt with F?A.  Publications by EPA employees are subject to review
if they are generated on Agency time or are based on materials derived from EPA
suoport-.M activities.  This Order does not provide for, nor describe, all -of the
stcos in the publication process;  it is desioned to outline the mview proopdur^
This Order should not he construed to conflict with the disclosure provicions of
the Freedom of Information Act.

4.  nrrpimnns.

    a.  TTie tern "publication" induces all 1?PA generated materials that may be
released in mass to the general public, including:

        (1)  written statements needed to satisfy a statutory or regulatory
reouirsment;

        (2)  published or unpublished bonks, manuals, and research reports;


                                      -2-

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                                                                            ~1
                                                               22JV1.4
         i3>  infonaf.cnil brochures cr iracenals an.i newsletters or other
periodic reports;

         (4)  publications by EPA enployjes nreposo-J for outsit journals other
than t_ose that incorporate peer rev IP-;

         (S)  project reports and other '.atarials file- *i*ih the rational Technical
Information Service (NTIS);

         (6)  EFA puDlished proceedings r^ulting fr-m -Vjency sponsored conferences,
wortshors, and seminars (oarers by non-F^A e.Tpioyees should go through this peer
review process or co-.tain an
        (7)  cop.tri&Jtiorr-, made to pj?I -cations by intewaenc/ workinq groups
where authorship is to ^ attributed to EPA. or its eupJoyecs (these publications
should qo through this peer review process or contain a? adequate disclaimer);

        (3)  audiovisual materials desi^neJ to be rsieds<»d to the general public
in other than a single presentation; or,
        (9)  ccrouter software desij^- for release to the general public.


5.  PSQCEDURSS.

    a.  Initiation of rne Review Process.

        (1)  Tfse review process is initisteo vhen the author (hereinafter includes
authors) submit? a publication to hisA«cr innc^isrc s-jTcrvisor or office director
for review, ccocther with recorrandaticr.s f-r at least two peer reviewers who
should be specialists in the subject.  The author nay raquest that a reas-*iable
review schedule be established to ensure tiieiy processing.

        (2)  Tho nanuscript should h» in near-finishef forn to the satisfaction
of the author.  Typically, it should bs in a nouble-spccnd, typed format with
all of the necessary tables, charts, illustrations and figures attached.  A
designated supervisor evaluates the te*w and f3n.-an" : it to, usually, the author's
    imenried reviewers for scientific and cechnical re; lew.  nRvievk-s ^ay be done
sinultaneously in order co reduce the tine required.

        (3)  Additional review by other EPA offices antf laboratories may be
requested by any office through which a publication, mist pess enro»rt-e to its
final publication form.
                                       -3-

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                                            ORDER             2200.4
    b.  Peer Review.

        (1)  Beer review  is designed  to  identify weak, .-Vxjbtf'Jl, amhinuoi:^ ~>r
(insupportable statements or conclusions,  l^e peer reviewer  is exnoct-^l tn <-../.-nj-
ate the manuscript  for general content,  organization and scooe, prespitfln.vi *n^
quality of data, validity of analytical  techniques, soundness of conclusion^.
and consistency of  the text with  tables, figures, illustrations and  cans.

        (2)  A reviewer should use marginal notes or interlineations on th«
draft publication to indicate suggested  chanqes or questions.  '.Jhore sunnos-.ions
are numerous or complex, or where mnre serious questions arise, an attache^
memorandum is appropriate.  Narked-up drafts, and accompanying statements  from
reviewers, are returned directly  to the  author unless other directions are provided.

        (3)  Hevi«*ws should be completed in a reasonably prompt fashion.   °eer-
reviewers and those in the administrative chain should make e**»ry attest  to
meet the proposed time schedule.  A goal would be for review from the office
director level up through the Associate, Assistant or Rpaional Vhunjstrator
level to be completed within two  weeks.  Refusal at any level of manaqoment to
approve a document may be appealed once  to the next hiqher l*»vel of  nwnaqc'ner.t.

    c.  ttedrafting.

        (1)  TTie author should make efforts to give thoughtful consideration to
and to acconwodate the cements provided by reviewers in modifying and redrafting
of the text.  Tn 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, th*»
author should briefly explain his positions on the revised draft wh"n it  is sent
out for re-review.  7toe author should also indicate changes that "iav or
i.c* h-n-3 been made so as to alert the reviewers of a revised draft.

        (2)  Where substanti.il differences or misunderstandings occur, th*
author should explain his/her views in more formal comments in a
attached to the revised draft of  the  manuscript.  Informal consultation
discussion between reviewers and  author  are highly desirable in order to clarify
points of view and to facilitate  agreement when significant differences in^e.

        (3)  The review process is repeated until the author feels that the
proposed publication in ready for submission for final administrative and
technical, review.  At this point, statements of concurrence and the  siqnar.ure
of the designated peer revievnrs  should  S» attached to the text.  In caso^
the author has not reached a consensus with the reviewers, comments  on th*>
of their differences, prepared by tho reviewers, should be attached  to th^
and transmitted to subseouent administrative? levels for review.
                                       -A-

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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 orovirte final
for technical and scientific soundness and overall organization and
of data.
        (2)  At this level, or if aporopriate at a lower level, a
outlining any expenditures, and sources of funds or priorities, or unusutl condi-
tions should be attached.  This memo should also include plans for publication,
dates, and the anticipated number of copiis, as wpll a«? the purpnsw 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 t!.e Administrator,
the office director will have responsibility for the document and make this
decision.  In some 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 tho 
-------
                                            °*°f*             2200. 4
         (3)   The Science Advisor, or  his riesianate, will review documents for
general scientific and technical content, clarity, logic, consistent , soundness
of  conclusions,  organization  and scope, presentation and quality oL data, validity
of  analytical techniques and  overall  conformity with research and publication
ains of the  Agency.  The Science Advisor will develoo .systems for review, for
report of  comments 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.  The
           Associate, Assistant, or Regional Administrator in whose
           prooram,  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 OMB Circular A-3.

         (2)  The 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 EPA'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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                                              OBOE*
2200.  4
    q.  Arcroval and Publication Process

        (1)  The final nanuscript, it annroved by the Associate, Assistant,
or i*»-jion*l Administrator is returned to the author for appropriate distribution
or ouhlication.  "Major" documonts must he approved by the Science Advisor and/or
the office of Public Affairs prior to publication.  Following such approval,
each adrir.istrativp office that participated in the review process will he notified
of the action.  The author is responsible for ensuring publication anil distribution
in accordance with guidelines established by the Office of Public Affairs.

        (2)  Papers nrepared for publication for outside journals are returned to
the author after aopropriate approval.  Qch administrative office that partici-
pated in the review procrss will be notified of this action.  Tfce 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 nanuscript is returned to the originating office or the author as
is anonnriatc.  All conrents should be addressed and necessary revisions made.

    h.  Products of External Contracts and Grants.

        (1)  F3>A encouranns 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 been
             funded wholly or in part by the United States Owironmental
             Protection Agency through 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 shouM also be sent to the EPA Project Officer who
will forward it to the appropriate Offion 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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                                            ORDER
                                                                2200.4
        (3)  Informational materials, reports, and other products produced under
an EPA contract, grant, or cooperative agreement should go through a comparable
systen of review prior to their release to the public as an EPA publication or
product.  The Project Officer is responsible for insuring that adequate EPA
review consistent with the rights and data clauses of EPA contracts, grants or
cooperative agreener.ts is conducted, including approvals by appropriate Associate,
Assistant, or Regional Administrators and the Science Advisor and/or Office of
Public Affairs, if necessary.  Qrant officers developing grants which involve
public information/public participation activities should encourage the use o*.
cooperative agreements which enable EPA to require the grantees to submit
their material for review and/or approval prior to its conpletion and distribution.
                                            Anne >1. Gorsuch           -
                                             Administrator  /

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APPENDIX W

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         APPENDIX W
SAMPLE INTERAGENCY AGREEMENT

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                                                                                               Page 1 of 3
United States Environmental Protection Agency
Washington DC 20460
c n A Interagency Agreement /
tPA Amendment
Part I - General Information
6. Name and Address of EPA Organization
ENVIRONMENTAL PROTECTION AGENCY
ENVIRONMENTAL RESEARCH LABORATORY
200 S.W.35TH STREET
CORVALLIS, OR 97333
1. EPA / IAG Identification Number
DW1 49361 41 -01-0
2. Other Agency ID Number
3. Type of Action
NEW
4. Funding Location
by Region
XI
5. Program Office
Abbreviation
ERL/COR
7. Name and Address of Other Agency
INTERIOR, DEPARTMENT OF THE
US GEOLOGICAL SURVEY, WATER RESOURCES
DIVISION, P.O. BOX 1350
ALBANY, NY 12201
s. Project Title Stream Discharge and Water Quality in the Catskill Mountains of New York
9. EPA Project Officer (Name, Address, Telephone Number)
PAULSEN, STEVEN
EPA/ERL
200 S.W. 35TH STREET
CORVALLIS, OR 97333
(503) 754-4428
11. Profect Period
03/01/931002/28/96
10. Other Agency Project Officer (Name, Address, Telephone Number)
MURDOCH, PETER S.
DOI/USGS/WRD
P. 0. BOX 1397
ALBANY, NY 12201
(518)472-4574
12. Budget Period
03/01/931009/30/94
1 3. Scope of Work (Attach additional sheets, as needed)
See attached proposal. The attached proposal contains the scope of work for this agreement.
            SIGNED ACCEPTANCE FOR THIS AGREEMENT MUST BE RETURNED
            TO ADDRESS IN ITEM 29, PAGE 3 OF THIS EPA FORM
            The EPA Grants Specialist for thislAG is Joseph Faria, (202) 260-8276
                                                                             3..   by. 5, WWSP......
14. Statutory Authority for Both Transfer of Funds and Project Activities
    ECONOMY ACT OF 1932 AS AMENDED
                                                       15. Other Agency Type
                                                         FEDERAL
          FUNDS
PREVIOUS AMOUNT
AMOUNT THIS ACTION
AMENDED TOTAL
16. EPA Amount
                                 51,500
17. EPA In-Kind Amount
                                     0
18. Other Agency Amount
19. Other Agency In-Kind Amount
20. Total Project Cost
                                 51.500
  Fiscal Information
ogram Element
CC2A1E
FY
93
Appropriation
683/40107
Doc. Control No.
MW0108
Account Number
3CC226M014
Object Class
25.71
Obligation/Deoblig. Amt
51,500

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                                    Part II • Approved Budget
                                                                                                            Page 2 of 3
                                                                                       EPA  IAG Identification Number
                                                                                              DW14936141-01-0
                          22. Budget Categories
                                                                      Itemization of
                                                                       This Action
                    Itemization of Total Project
                      Estimated Cost to Date
(a) Personnel
                                                                            9,902
                               9,902
(b) Fringe Benefits
                                                                                0
(c) Travel
                                                                            1,600
                                1,600
(d) Equipment
(e) Supplies
                                                                             750
                                 750
(f) Procurement / Assistance
                                                                            3,700
                               3,700
(g) Construction
                                                                                                          0
(h) Other
                                                                            6,450
                               6,450
(I) Total Direct Charges
                                                                          22,402
                              22,402
(I) Indirect Costs: Rate
                      Base$
    29,098
                       29,098
(K) Total:
(EPA Share:.
      100.00 %) (Other Agency Share    0.00%)
    51,500
                       51,500
23. Is Equipment authorized to be furnished by EPA or leased, purchased, or rented with EPA funds?     I  I
 (Identify all equipment costing $1000 or more.)                                                  L~J
                                                                                       Yes
                          No
24. Are any of these funds being used on extramural agreements? (See Item 22f.)
                                                                    Yes
   D
No
 Type of extramural agreement
                               Grant
                                   Cooperative Agreement
Procurement (includes Small Purchase Order)
 Contractor / Recipient Name (if known)
  UNKNOWN AT THIS TIME
                                       Total Extramural Amount under this Project

                                                         3,700
            Percent Funded by EPA (if known)

                         100.00
                                   Part ill • Funding  Methods and Billing Instructions
25.
       Funds-Out Agreement     (Note: EPA Agency Location Code (ALC) - 68010727)


        |X| Disbursement Agreement


              |XJ Repayment  Request for repayment of actual costs must be itemized on SF-1080 and submitted to the Financial Management
                             Office, Cincinnati, OH 45268:

                                      I  I Monthly     |XI Quarterly    I   I Upon Completion of Work

                             Only available for use by Federal agencies on working capital fund or with appropriate justification of need for
              I  | Advance    this type of payment method. Unexpended funds at completion of work will be returned to EPA. Quarterly cost
                             reports will be forwarded to the Financial Management Center, EPA, Cincinnati, OH 45268.
                          Used to transfer obllgational authority or transfer of function between Federal agencies. Must receive prior
D            Allocation      approval by the Office of the Comptroller, Budget Division, Budget Formulation and Control Branch, EPA Hdqtrs.
            Transfer-Out   Forward appropriate reports to the Financial Reports and Analysis  Branch, Financial Management Division, PM-
                          226F.EPA, Washington, DC 20460.
26.
   D
Funds-ln Agreement
      I  I Reimbursement Agreement


      I  I Allocation Transfer-In
                               II Repayment
                               |	| Advance
 Other Agency's IAG Identification Number
                                                                   EPA Program Office Allowance Holder/Resp. Center No.
 Other Agency's Billing Address (include ALC or Station Symbol Number)
                                                                   Other Agency's Billing Instruction and Frequency

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                    Part IV - Acceptance Conditions
                            EPA IAG Identification Number

                              DW14936141-01-0
27 General Conditions
   The other agency covenants and agrees that It will expeditiously Initiate and complete the project for which funds
   have been awarded under this agreement.
28. Special Conditions (Attach additional shoots if needed)

   EPA  will only honor requests  for  payment up  the amount specified for  this  project.


   Any  document produced  under  the  terms of this  agreement  is subject  to the  review

   policies of the  EPA.



   See attached  indirect cost certification and DBE
                                       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 EPA. The agreement/amendment must be forwarded to the
          address cited 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/amendment 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-in   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 wfll be returned to the other agency after
	acceptance.
    EPA IAG Administration Office (for administrative assistance)
                      EPA Program Office (tor technical assistance)-
29 Organization/Address

   Grants Information &  Analysis Branch

   Grants Admin.   Div.,  U.S.  EPA

   401  M Street,  S.W.          (3903F)
   Washington, DC  20460
           30. Organization/Address

            Corvallis Environmental Research  Lab.

            U.S.  Environmental Protection Agency

            200 S.W. 35th Street

            Corvallis,  OR  97333
                                              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 ol the Environmental Protection Agency Program Office
31  Signature
Typed Name and Title
Thomas A.  Murphy

Director,  ERL-Corvallis
Date
                               Action Official on Behalf ot the Environmental Protection Agency
32 Signature
Typed Name and Tide
W.  Scott  McMoran, Chief

Grants  Info. &  Analysis Br.  GAD
Date
                                     Authorizing Official on Behalf ol the Other Agency
33 Signature
Typed Name and Title

L.  Grady  Moore,  District  Chief
Date


  9/14/93
EPA Form 1610-1/ftieVT 10-88)
                                                   Page 3 of 5

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                                 DW14936141-01-0


DBE Special Condition


EPA's policy requires at least 8% of  its Federal funding for prime
and subcontracts be  awarded  to businesses or other organizations
owned  or controlled by  socially and  economically disadvantaged
individuals.

As a  recipient of monies under this IAG, the Department  of the
Interior/U.S. Geological Survey must ensure to the fullest extend
possible that at least 8% of funds  for prime or subcontracts and
subgrants for services are made available to businesses owned or
controlled by socially and economically disadvantage individuals,
women-owned  businesses,   and  Historically  Black  Colleges  and
Universities.  (DBE)

The Department of  the  Interior/USGS must submit a  report  to EPA
showing  the  total extramural  funds awarded  and  the  amount and
percentage of extramural  funds awarded  to  DBEs by November 15th of
current year.  Reports should be submitted to:

                Office of Small and  Disadvantage
                  Business Utilization (A-149C)
                U.S.  Environmental  Protection Agency
                401 M street, S.W.
                Washington,  D.C.  20460
The Department of  the  Interior/U.S.  Geological Survey certifies:
1)  that any indirect costs included  in billings to EPA represent,
in accordance with GAO principles, indirect costs that are funded
out  of  the Department  of  the  Interior's  currently  available
appropriations and that bear  a significant relationship  to the
performing of the service or work,  or 2)  that statutory authority
exists for charging other than these costs of performance.  If an
audit determines that any direct or indirect costs charged to EPA
are unallowable,  EPA will be  notified  immediately  following the
resolution of the audit and EPA will be credited for those costs.

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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

     Award Official role - 1.5
     Approval/Decision Official role - 1.4
     Direct Benefit - 1.7; 8.11
     EPA Order •-1.4; 1.12; Appendix B
           Failure to comply - 1.13
     GMO Role » 1.5
     Principle Purpose --1.6-7
     Support or Stimulation - 1.8

Administrative Requirements

     Cooperative Agreements - 1.10-11; 2.8-9
     Grants - 1.10-11; 2.8-9
     Interagency Agreements - 8.11

Application Identification Number - 3.7

Application Package

     Content -- 3.9; 4.4;  4.5-7; Appendix Q
     GMO Responsibility - 3.7-8
     PO Responsibility -3.7-8

Approval/Decision Official

     Roles and  Responsibilities --1.4

Assurances

     Purpose - 3.24
     Signatures - 3.24

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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 -- 2.10; 7.2-3
     Interaction With Auditors - 7.7-8
     Internal - 7.2
     Requests - 7.5-6

Automated Clearinghouse (ACH) - 5.7

Award Instrument

     Assistance vs Acquisition - 1.2
     Cooperative Agreement, definition - 1.10
     Grant, definition - 1.10

Carryover of Unobligated Balances - 2.23; Appendix M

Certifications

     Anti-lobbying - 3.29
     Drug-free Workplace - 3.20
     Procurement System - 3.29
     Suspension and Debarment - 3.30

Changes

     Informal Approval -- 5.11
     Prior Written Approval  -  5.9
           All Recipients -- 5.9-10
           State, Local, Tribal Governments -- 5.9-10
           Universities - 5.9-10
           Nonprofits - 5.9-10

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(Numbers Refer to the Module and Page in a Module)

Closeout - Appendix T

     Initiating - 6.2; 6,6
     Products/Reports
           Peer Review ~ 6.8
           Publications - 6.8
     Property Disposition - 6.7
     Repayment of Debts - 6.8
     PO Roles and Responsibilities - 6.3; 6.10
     GMO Roles and Responsibilities -- 6.11
     FMO Roles and Responsibilities - 6.12
     Recipient Roles and Responsibilities - 6.12
     Timing - 6.4-5

Code of Federal Regulations

     Force and Effect of Law  -- 2.11
     General Assistance Regulations
           Nonprofits - 2.15
           State, Local Governments, and Indian Tribes - 2.16
           Universities - 2.15
     Intergovernmental Review  -- 2.13
     Program  Specific Regulations -- 2.19

Competition

     Approval/Decision Official Responsibilities — 1.14
     Requirements for - 1.14
     SRO Responsibilities - 1.14

Conferences -- 1.9

Conditions

     High Risk Applicants/Recipients - 4.9
           Special Conditions - 4.9
     Terms and Conditions -- 4.8

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(Numbers Refer to the Module and Page in a Module)

Conflicts of Interest

     Deputy Ethics Officials - 1.15
     EPA Employees - 1.15
     Impartiality of Action --1.15
     Preferential Treatment --1.15
     Recipient Code of Conduct - 1.16
     Recipient Decisions - 1.16

Cooperative Agreement --1.11

Cooperation Authorities -- 8.5

Cost Principles - 2.10

     Allocable - 3.19
     Allowable -- 3.18
     Eligible - 3.18
     Preaward -- 3.20-21
     Reasonable -- 3.19

Cost Sharing

     Federal vs Recipient Share -- 3.16-17
     In-kind - 3.16

Debannent and Suspension -- 2.17; 3.30

Decision Memorandum

     Content - 1.4;  8.12-13

Delegations of Authority - 2.3-4; Appendix F & G

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(Numbers Refer to the Module and Page in a Module)

Deviations

     Approval/Disapproval Authority - 5.13-14
     Content of Request - 5.13-14
     Limitations  - 5.13

Disadvantaged Business Utilization Plan--2.23-24; 8.11; Appendix N

Disputes

     Disputable Activities - 5.15
     Nondisputable Activities - 5.15

Economy Act - 8.4

Equipment - 3.22

Executive Orders - 2.5-7

Federal Grant and Cooperative Agreement Act - 1.2-3; Appendix A

Federal Statutes - 2.2; Appendix F

Freedom of Information Act - 3.8

Guidance, Program

     Distribution - 3.2-3
     National Program Manger - 3.2
     Purpose  -- 3.2
     Regional - 3.2

Indian Tribes

     Intergovernmental Reviews -- 2.12
     Treatment as States - 2.25

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(Numbers Refer to the Module and Page in a Module)

Indirect Cost Rate Agreements - 3.14; 8.11

Interagency Agency Agreements

     Authority -- 8.4-5; 8.7; 8.12
     Decision Memorandum - 8.12-13
     Federal lAGs » 8.1-2
     Funds Out - 8.8; 8.11; 8.13
     Funds In - 8.8; 8.11; 8.13
     Guidance - 8.6
     Intergovernmental Agreements -- Apendix W
     International lAGs -- 8.3
           Funds From Foreign Governments -- 8.3
     Limits on Availability of Funds - 8.7
     Memorandum of Understanding (MOU) - 8.2
     Ordering Agency - 8.1
     Payment/Billing
           Advance - 8.10; 8.13
           Reimbursement -- 8.10; 8.13
     Requirements - 8.11
     Servicing Agency - 8.1

Intergovernmental Cooperation Act - 8.5

Intergovernmental Review - 2.12; 2.14

International Agreements

     Approvals  -- 3.33; 8.3
     Department of State Role -- 3.33; 8.3
     Office of International Activities Role -- 3.33; 8.3

Minority Business Enterprise/Women Business Enterprise-Appendix R

     EPA Plan » 2.6; 2.23; 8.11
     Objectives - 2.23

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(Numbers Refer to the Module and Page in a Module)

Monitoring

     On-site Reviews - 5.3
     In-house Reviews — 5.3

Official Files

     Grants Management Office -- 5.14; 8.14; Appendix S
     Program Office - 8.14; Appendix S

OMB Circulars

     Applicability - 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 - 5.6-7
     Reimbursement - 5.8

Peer and Publication Review - 6.8-9; Appendix V

Performance Based Assistance - 2.23; Appendix L

Pollution Prevention -- 2.24; Appendix P

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(Numbers Refer to the Module and Page in a Module)

Preapplication Assistance - 3.4-6

Principle Purpose

     Grants vs Contracts - 1.3

Procurement

     Certification Form (EPA Form 5700-48) - 3.29
     MBE/WBE Requirements - 2.6; 2.23

Program Guidance

     Annual Guidance - 3.2-3
     Annual Planning Process - 3.2

Project Narrative/Workplan - 3.12; 3.25

     Continuing Environmental Program Grants - 3.26
     Negotiations - 3.25; 3.27-28
     Purpose •- 3.25
     Technical Review - 3.12; 3.25

Property

     Acquisition  - 3.23
     Disposition - 6.3; 6.7
     Intangible - 3.22
     Personal - 3.22
     Real - 3.22
     Title - 3.23

Quality Assurance/Quality Control

     Program Plan -- 3.31
     Project Plan -- 3.31
     Requirements - 3.32

                                   8

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(Numbers Refer to the Module and Page in a Module)

Recipient Performance

     Coordination - 5.17
     Noncompliance - 5.17
     Performance Based Assistance •• 5.17

Recycled Paper - 2.22

Reports

     Responsibilities - 5.3-5
     Requirements -• 5.3; 5.5

Reviews

     Administrative -- 3.7
     Budget
           Categories  -• 3.13-15
           GMO Responsibilities - 3.12
           PO Responsibilities - 3.12
     Extramural (non-EPA) Reviews  --  3.8
     Technical - 3.7-8; 5.3-4
     Time Frames - 3.7-8

Roles and Responsibilities

     Award Official - 4.10
     Applicant  » 3.37; 4.13
     Financial Management Office - 3.37; 4.13; 5.22
     Grants Management Offices - 3.36;  4.3; 4.10; 4.12; 5.20; 8.14
     MBE/WBE Coordinators - 3.38; 4.13; 5.22
     Office of General Counsel/Regional Counsel -- 3.37; 4.13; 5.22
     Project/Program  Offices --1.4; 3.34-35; 4.11; 5.18-19; 8.12-13
     Recipient - 4.10; 4.13; 5.21
     Senior Resource  Official - 1.4; 4.2; 4.13

Solicitations (Research and Development)  - 3.2-3

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(Numbers Refer to the Module and Page in a Module)


Statutory Authorities

     40 CFR Part 29 - 2.12
     40 CFR Part 30 - 2.15; Appendix D
     40 CFR Part 31 - 2.16; Appendix E
     40 CFR Part 32 -- 2.17
     40 CFR Part 33 - 2.18; Appendix H
     40 CFR Part 35 -- 2.19
     40 CFR Part 40 -- 2.20; Appendix I
     40 CFR Part 45 - 2.20; Appendix I
     40 CFR Part 46 - 2.21; Appendix I
     40 CFR Part 47 -- 2.21; Appendix I

Substantial Involvement - 1.11

     Examples - 1.11

Timely Award - 2.24

Transferring an Award - 5.12

Travel -- 3.14; 8.7; 8.11

Workplan

     Review -- 3.12
                                 10

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GLOSSARY

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GLOSSARY

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                GLOSSARY/DEFINITIONS

1.  ACCRUED EXPENDITURES:  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 (SUCH AS
ANNUITIES, INSURANCE CLAIMS, AND OTHER BENEFIT PAYMENTS.
(A-102 & A-110)

2. ACCRUED INCOME: THE SUM OF: (1) EARNINGS DURING A GIVEN
PERIOD FROM SERVICES PERFORMED BY  THE RECIPIENT AND
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. (A-102 & A-110)

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 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. (A-102
& A-110)

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  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. (A-102)

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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.
(A-110)

6.  ALLOCABLE COSTS:   COSTS  THAT ARE ALLOCABLE TO  A
PARTICULAR   COST OBJECTIVE  TO  THE  EXTENT BENEFITS
RECEIVED BY SUCH OBJECTIVE. (A-87)

7. ALLOTMENT: AN AMOUNT REPRESENTING A STATE'S SHARE OF
FUNDS  REQUESTED  IN  THE   PRESIDENT'S  BUDGET  OR
APPROPRIATED BY CONGRESS FOR 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:  1.   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)

            2. INFORMAL AMENDMENT:  PROPOSED PROJECT
CHANGE WHICH DOES NOT SUBSTANTIALLY ALTER THE OBJECTIVE
OR SCOPE OF THE PROJECT.

10. APPLICANT:  ANY ENTITY THAT FILES AN APPLICATION OR
UNSOLICITED PROPOSAL FOR EPA FINANCIAL ASSISTANCE UNDER
40 CFR  CHAPTER  I--ENVIRONMENTAL PROTECTION AGENCY,
SUBCHAPTER A -- GENERAL. (40 CFR PART 30)

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11. APPROVAL MEMO:  A MEMO ORIGINATED BY THE PROJECT
OFFICER AND CONCURRED IN BY THE IMMEDIATE SUPERVISOR
WHICH DENOTES WORKPLAN 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. (40 CFR PART 30)

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')  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 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. (A-110)

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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) (ASSISTANCE ADMINISTRATION MANUAL)

17. AWARDING  AGENCY:  (1) WITH RESPECT TO A GRANT, THE
FEDERAL AGENCY, AND (2) WITH RESPECT TO A SUBGRANT, THE
PARTY THAT AWARDED THE SUBGRANT. (A-102)

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. (40 CFR PART 30)

19. CASH CONTRIBUTIONS:  1.  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
LEGISLATION,  FEDERAL  FUNDS  RECEIVED   FROM  OTHER
ASSISTANCE AGREEMENTS MAY BE CONSIDERED AS RECIPIENT OR
SUBRECIPIENT CASH CONTRIBUTIONS. (A-102)

    2.  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. CLOSEOUT:  1.  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.
(A-110)

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    2.  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)

22. COGNIZANT AGENCY: THE FEDERAL AGENCY WHICH, ON BEHALF
OF ALL FEDERAL AGENCIES, IS RESPONSIBLE FOR REVIEWING,
NEGOTIATING,  AND APPROVING COST ALLOCATION PLANS OR
INDIRECT COST PROPOSALS DEVELOPED UNDER A-87. (A-87)

23. COMMITMENT: 1.  THE OFFICIAL RESERVATION OF FUNDS AND
AUTHORIZATION  TO INCUR  OBLIGATIONS.    (ASSISTANCE
ADMINISTRATION MANUAL)

    2.  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)

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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.)

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: (EXCEPT AS USED IN THE DEFINITIONS FOR GRANT
AND SUBGRANT AND EXCEPT WHERE  QUALIFIED BY FEDERAL) A
PROCUREMENT CONTRACT UNDER A GRANT OR SUBGRANT, AND A
PROCUREMENT SUBCONTRACT UNDER A CONTRACT. (A-102)

29. CONTRACTOR:  ANY PARTY TO WHOM A RECIPIENT AWARDS A
SUBAGREEMENT. (40 CFR PART 30)

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). (40 CFR PART 30)

31. COST: COST 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. (A-87)

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32. COST ALLOCATION PLAN (CAP): ANY OF THE FOLLOWING --

    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.

    C."INDIRECT COST RATE PROPOSAL" - THE DOCUMENTATION
PREPARED BY A GOVERNMENTAL UNIT OR SUBDIVISION THEREOF
TO SUBSTANTIATE ITS REQUEST FOR THE ESTABLISHMENT OF AN
INDIRECT COST RATE AS DESCRIBED IN ATTACHMENT E OF OMB
CIRCULAR A-87. (A-87)

33. COST OBJECTIVE: A FUNCTION, ORGANIZATIONAL SUBDIVISION,
CONTRACT, GRANT, OR OTHER ACTIVITY FOR WHICH COST DATA
ARE  NEEDED  AND  FOR  WHICH  PROVISION IS MADE TO
ACCUMULATE THOSE COSTS. (A-87)

34. 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 CON TRACT 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.
(A-102)

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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. (A-110)

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. (GPPB)

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. (A-
110)

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. (A-102 & A-110)

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. (40 CFR PART 30)

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.  (A-110)

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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. (A-110)

44. EXPENDITURE REPORT: (1) FOR NONCONSTRUCTION GRANTS,
THE SF-269 "FINANCIAL STATUS REPORT": (OR OTHER EQUIVALENT
REPORT); (2) FOR CONSTRUCTION GRANTS, THE SF-271 "OUTLAY
REPORT AND REQUEST FOR  REIMBURSEMENT"  (OR OTHER
EQUIVALENT REPORT). (A-102)

45. FEDERAL AWARDING AGENCY:   THE FEDERAL AGENCY THAT
PROVIDES AN AWARD TO THE RECIPIENT. (A-110)

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. (A-110)

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. (A-
110)

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48. FEDERALLY RECOGNIZED INDIAN TRIBAL GOVERNMENT: THE
GOVERNING BODY OR A GOVERNMENTAL AGENCY OF ANY INDIAN
TRIBE,  BAND,  NATIONS,  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
BY HIM THROUGH THE BUREAU OF INDIAN AFFAIRS. (A-87 & A-102)

49.  FINANCIAL  STATUS  REPORT  (FSR):    A   STANDARD,
GOVERNMENTWIDE 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. (A-110)

51. GOVERNMENT:  A STATE OR  LOCAL  GOVERNMENT OR A
FEDERALLY RECOGNIZED INDIAN TRIBAL GOVERNMENT. (A-102)

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. (A-102)
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53. GRANT AGREEMENT: (SEE ALSO "ASSISTANCE AGREEMENT1) 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. (OMB
CIRCULAR A-102)

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. (A-87:PROPOSED REVISION 8/19/93)

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.
(A-87:PROPOSED REVISION 8/19/93)

58. INDIRECT COST RATE AGREEMENT: AN AGREEMENT BETWEEN
THE RECIPIENT AND THE COGNIZANT FEDERAL AGENCY WHICH
IDENTIFIES THE BASIS FOR THE INDIRECT COST RATE, USUALLY
SUBMITTED ANNUALLY. (REGION 9)
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59. INDIRECT COST RATE PROPOSAL:  THE  DOCUMENTATION
PREPARED BY A GOVERNMENTAL UNIT OR SUBDIVISION THEREOF
TO SUBSTANTIATE ITS REQUEST FOR THE ESTABLISHMENT OF AN
INDIRECT COST RATE AS DESCRIBED IN ATTACHMENT E OF OMB
CIRCULAR A-87. (OMB CIRCULAR A-87)

60. IN-KIND  CONTRIBUTION:  1.  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. (40CFRPART30) 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):(1) A WRITTEN
AGREEMENT BETWEEN FEDERAL AGENCIES UNDER WHICH GOODS
AND SERVICES ARE PROVIDED IN EXCHANGE FOR FUNDS,  OR
WHERE SERVICES ARE PROVIDED WITHOUT PAYMENT.

    (2) 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.

    (3)  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.
(HEADQUARTERS ~ GIAB)
                         12

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63. INTANGIBLE PROPERTY AND DEBT INSTRUMENTS: MEANS BUT
IS NOT LIMITED TO TRADEMARKS, COPYRIGHT, 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.  (OMB CIRCULAR A-110)

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 CIRCULARS A-87 & A-102)

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 WORKPLANS
AND FUNDS AVAILABLE TO CARRY OUT THE WORKPLAN ACTIVITIES.
(REGION 9)
                          13

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68. NONEXPENDABLE PERSONAL PROPERTY: PERSONAL PROPERTY
WITH  A USEFUL  LIFE OF AT LEAST  TWO  YEARS AND  AN
ACQUISITION  COST OF $500  OR MORE.  (40  CFR PART 30 &
ASSISTANCE ADMINISTRATION MANUAL)

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. (OMB CIRCULARS A-102
& A-110)

70. OFFICIAL FILE:  1.  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. (OMB
CIRCULAR A-102)

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

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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)

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.
(OMB CIRCULAR A-102)

75. PERSONAL PROPERTY: 1.  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.  (OMB CIRCULAR A-110)

    2.  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  THAN AN
APPLICANT FOR CONTINUING ENVIRONMENTAL PROGRAM SUPPORT
(STATE, INTERSTATE  OR  LOCAL AGENCY)   CONSIDER IN
DEVELOPING ITS APPLICATION AND WORK PROGRAM. (ASSISTANCE
ADMINISTRATION MANUAL)
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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 SUBAGREEMENT 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")

79. PRIOR APPROVAL: DOCUMENTATION/WRITTEN APPROVAL BY AN
AUTHORIZED  OFFICIAL  EVIDENCING  CONSENT  PRIOR  TO
INCURRING SPECIFIC COST. (COMBINATION OF OMB CIRCULARS A-
102 & A-110)

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".) (40 CFR PART 33)

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: 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  	.24(e) AND (h)  OF OMB  CIRCULAR A-110).
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

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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. (OMB CIRCULAR A-110)

    2.  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  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.  (OMB CIRCULAR A-110)

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 "WORKPLAN/WORKPROGRAM")
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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.  (40 CFR PART 30 & ASSISTANCE
ADMINISTRATION MANUAL)

87. PROJECT PERIOD:  l.THE PERIOD ESTABLISHED IN THE AWARD
DOCUMENT DURING WHICH FEDERAL SPONSORSHIP BEGINS AND
ENDS. (OMB CIRCULAR A-110)

    2. 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. (40 CFR PART 30
& ASSISTANCE ADMINISTRATION MANUAL)

88. PROPERTY:  UNLESS OTHERWISE STATED, REAL  PROPERTY,
EQUIPMENT,INTANGIBLE PROPERTY AND DEBT INSTRUMENTS. (40
CFR PART 35; A-110)

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.   (40  CFR PART  30  & 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.   (40  CFR PART  30 &
ASSISTANCE ADMINISTRATION MANUAL)
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91. QUALITY ASSURANCE PROJECT PLAN:  AN ORGANIZATION'S
WRITTEN PROCEDURES WHICH DELINEATE HOW IT PRODUCES
QUALITY DATA FOR A SPECIFIC PROJECT OR MEASUREMENT
METHOD.   (40 CFR PART 30 & ASSISTANCE ADMINISTRATION
MANUAL)

92. REAL PROPERTY: LAND, INCLUDING LAND IMPROVEMENTS,
STRUCTURES  AND  APPURTENANCES  THERETO,  EXCLUDING
MOVABLE MACHINERY AND EQUIPMENT. (OMB CIRCULARS A-102 &
A-110; 40 CFR PART 30; ASSISTANCE ADMINISTRATION MANUAL)

93. RECIPIENT:  (SEE ALSO  "GRANTEE") 1.  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 PRIVATENON-PROFITORGANIZATIONS 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. (OMB CIRCULAR A-110)

    2. ANY ENTITY WHICH HAS BEEN AWARDED AND ACCEPTED AN
EPA ASSISTANCE AGREEMENT.  (40 CFR  PART 30; ASSISTANCE
ADMINISTRATION MANUAL)
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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. (OMB CIRCULAR A-110)

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)
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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 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. (OMB CIRCULAR A-102; 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 $25,000).  (OMB CIRCULAR A-110)

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. (OMB CIRCULAR A-87)

101. SUBAGREEMENT: A WRITTEN AGREEMENT BETWEEN AN EPA
RECIPIENT AND ANOTHER PARTY (OTHER THAN ANOTHER PUBLIC
AGENCY) AND  ANY  LOWER TIER AGREEMENT  FOR SERVICES,
SUPPLIES, OR CONSTRUCTION NECESSARY  TO COMPLETE THE
PROJECT.     SUBAGREEMENTS INCLUDE   CONTRACTS  AND
SUBCONTRACTS FOR PERSONAL AND PROFESSIONAL SERVICES,
AGREEMENTS WITH CONSULTANTS,  AND PURCHASE ORDERS. (40
CFR PART 30; 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 BE
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 F GOODS AND SERVICES
NOR DOES IT INCLUDE ANY  FORM OF ASSISTANCE WHICH IS
EXCLUDED FROM THE DEFINITION OF "AWARD" IN PARAGRAPH
	(e) OF OMB CIRCULAR A-110. (OMB CIRCULAR A-110)

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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. (OMB CIRCULAR A-102; 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.  (OMB
CIRCULAR A-102; 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. (OMB CIRCULAR-110)

106. SUPPLIES:  1.  ALL TANGIBLE PERSONAL PROPERTY OTHER
THAN equipment AS DEFINED IN 40 CFR PART 31. (OMB CIRCULAR A-
102)

    2.    ALL  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." (OMB CIRCULAR A-110)
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107. SUSPENSION: (1) 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."  (OMB CIRCULAR A-110)

    2.  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.O.  12549 TO IMMEDIATELY
EXCLUDE A  PERSON  FROM  PARTICIPATING  IN  GRANT
TRANSACTIONS FOR A PERIOD,  PENDING COMPLETION OF AN
INVESTIGATION AND SUCH LEGAL OR DEBARMENT PROCEEDINGS
AS MAY ENSUE. (OMB CIRCULAR A-102; 40 CFR PART 31)

108. TERMINATION:  1.   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  NONCOMPETING CONTINUATION,  RENEWAL,
EXTENSION, OR SUPPLEMENTAL AWARD; OR (4) VOIDING OF  A
GRANT UPON DETERMINATION THAT THE AWARD WAS OBTAINED
FRAUDULENTLY, OR WAS OTHERVvlSE ILLEGAL OR INVALID FROM
INCEPTION. (OMB CIRCULAR A-102; 40 CFR PART 31)

    2. THE CANCELLATION OF FEDERAL SPONSORSHIP, IN WHOLE
OR IN PART, UNDER AN AGREEMENT AT ANY TIME PRIOR TO THE
DATE OF COMPLETION. (OMB CIRCULAR A-110)

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    3.  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: ALL REQUIREMENTS OF
THE GRANT OR SUBGRANT, WHETHER IN STATUTE, REGULATIONS,
OR THE AWARD DOCUMENT.
(OMB CIRCULAR A-102; 40 CFR PART 31)

110. THIRD PARTY IN-KIND CONTRIBUTIONS: 1. 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. (OMB CIRCULAR A-110)

    2.  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. (OMB CIRCULAR A-102; 40 CFR PART 31)

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: 1. 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. (OMB CIRCULAR A-102; 40 CFR
PART 31)

    2.  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.  (OMB CIRCULAR A-110)

    3.  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. (OMB CIRCULARS A-102 & A-110;
40 CFR PART 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.  (OMB CIRCULAR A-110)
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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)

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.   (OMB
CIRCULAR A-110)

120. WORKPLAN/WORKPROGRAM (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)
MAY 23, 1994
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