MANAGING YOUR
GRANT OR
COOPERATIVE
AGREEMENT
PROJECT OFFICER
RESPONSIBILITIES
U.S. ENVIRONMENTAL PROTECTION AGENCY
GRANTS ADMINISTRATION DIVISION
GRANTS POLICY AND PROCEDURES BRANCH
Printed on Recycled Paper
-------
TABLE OF CONTENTS
MODULE I
MODULE II
MODULE III
MODULE IV
MODULE V
MODULE VI
MODULE IX
MODULE X
MODULE XI
MODULE XII
OVERVIEW
EPA BUDGET
REGULATORY AUTHORITY,
REQUIREMENTS, & GUIDANCE
INFORMATION SYSTEMS
DEVELOPING AND NEGOTIATING THE
APPLICATION
AWARD PROCESS
MODULE VII ADMINISTRATION
MODULE VIII FINANCIAL MANAGEMENT
PROCUREMENT
PROPERTY MANAGEMENT
CLOSEOUT
AUDITS
APPENDIX A
PROJECT OFFICER RESPONSIBILITIES
APPENDIX B DO'S AND DONTS LIST
APPENDIX C GRANTS VS CAs MEMORANDUM
-------
APPENDIX D
APPENDIX I
APPENDIX N
PERFORMANCE BASED ASSISTANCE
POLICY
APPENDIX E POLLUTION PREVENTION GUIDANCE
APPENDIX F CONTENTS OF OFFICIAL FILES
APPENDIX G APPLICATION FACE PAGE
APPENDIX H COMMITMENT NOTICE
DECISION MEMORANDUM
APPENDIX J POLICY ON ORPHAN GRANTS
APPENDIX K TIMELY AWARDS MEMORANDUM
APPENDIX L CARRYOVER POLICY
APPENDIX M MBE/WBE PLANS
CLOSEOUT POLICY
-------
MODULE I
OVERVIEW
-------
AN OVERVIEW
OF
EPA ASSISTANCE ADMINISTRATION
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Identify the Statutes Supporting EPA's Assistance Programs
• Explain the Difference Between Assistance Agreements and
Contracts, and Between Grants and Cooperative Agreements
Explain the Purpose of the Catalog of Federal Domestic
Assistance (CFDA) and EPA's Assistance Administration
Manual
VIEWGRAPH # -i
TITLE: An Overview of EPA Assistance Administration
KEY POINTS:
This module identifies and reviews the major provisions of the statutes that
support EPA's assistance programs, including the major environmental
statutes enacted during the past 25 years and the Federal Grant and
Cooperative Agreement Act of 1977.
This module also discusses the difference between assistance agreements
and contracts, and the difference between grants and cooperative
agreements.
Finally, this module reviews the general content of the Assistance
Administration Manual, the collection of guidance, procedural and
implementing documents that serves as the key resource for grants
specialists. And it explains the Catalog of Federal Domestic Assistance
(CFDA), the information it contains, and discusses both cataloged and
non-cataloged Federal programs.
1.1
-------
PROGRAMMATIC AUTHORITIES
'I -YEAR .-•:.-
1955
1956
1965
1969
1970
1972
1974
1980
1983
•••: ACRONYM
CAA
CWA
SWDA
NEPA
RCRA
FIFRA
SDWA
CERCLA
TSCA
:!=i:"i!"i;jjji .:i:j'/i:i::i:l:- •• "JACT : :='$SJ =.'!':::iH-- I-:-
Clean Air Act
Clean Water Act
Solid Waste Disposal Act
National Environmental Policy Act
Resources Conservation and
Recovery Act
Federal Insecticide, Fungicide.
and Rodentlclde Act
Safe Drinking Water Act
Comprehensive Environmental
Response, Compensation, and
Liability Act
Toxic Substance Control Act
VIEWGRAPH # 2
TITLE: Programmatic Authorities
KEY POINTS:
The statutes listed on the viewgraph establish the programmatic authorities of
EPA and many State environmental programs.
The CAA has two major grant-related provisions:
§103 Grants for Research, Investigation, Training and Other Activities
§105 Grants for Support of Air Pollution Planning and Control Programs
The CWA's grant-related provisions include:
§104 Research, Investigation, Training and other Activities
§105 Research, Development, Demonstration
§106 Surface Water and Ground Water Pollution
§107 Mine Water Pollution Demonstration
§108 Great Lakes Pollution Control
§109(b) Training
§113 Alaska Village Demonstration
§ 117 Chesapeake Bay
§201 Construction Grant for Wastewater Treatment Works
§205(g) Construction Management Assistance Grants
§205Q) Water Quality Management Planning
§205(j)(5) Nonpoint Source Reservation
1.2
-------
VIEWGRAPH* 2(cont.)
TITLE:. Programmatic Authorities
KEY POINTS:
§205(m) State Revolving Fund
§314 Clean Lakes
§319(h) Nonpoint Source
§320 National Estuary Program
§604(b) Water Quality Management Planning.
Key grant-related provisions of RCRA include:
Subtitle C §3011 Authorization of Assistance to States
Subtitle D §4008 Federal Assistance
Subtitle G §7007 Grants or Contracts for Training Projects
Subtitle H §8001 Research, Demonstrations, and Training, and §8006
Grants for Resource Recovery Systems and Improved Solid Waste
Disposal Facilities.
The key grant-related provisions of FIFRA are §136(r) Research and §136(u)
State Cooperation, Aid, and Training.
SDWA's grant-related provisions include:
§1442(b) Wellhead Protection
§1443(a) Underground Injection Control
§1443(b) Public Water System Supervision.
The key grant-related provision of CERCLA , as amended by SARA, is §104(d),
uses of Superfund.
Key grant-related provisions of TSCA include:
Title I §10 Research, and §28 State programs
Title III §306 Grant Assistance to States for Radon Programs, and §308
Regional Radon Training Centers.
1.3
-------
THE FEDERAL GRANT
AND COOPERATIVE AGREEMENT ACT
OF 1977
The Federal Grant and Cooperative Agreement Act of 1977
- Differentiated Acquisition from Assistance
- Differentiated Grants from Cooperative Agreements
- Distinguished Grants and Cooperative Agreements from
Procurement Instruments
EPA Order 1000.19 Implements the Federal Grant and
Cooperative Agreement Act of 1977
VIEWGRAPH # 4
TITLE: The Federal Grant and Cooperative Agreement Act of 1977
KEY POINTS:
The purpose of the Act was to characterize the relationship between the
Federal government and contractors, State and local governments, and other
recipients of Federal funds. The Act also established government-wide criteria
for selection of appropriate legal instruments to achieve uniformity in the use
by Federal agencies of such instruments, a clear definition of the relationships
they reflect, and a better understanding of the responsibilities of the parties.
EPA Order 1000.19 Implements the Federal Grant and Cooperative
Agreement Act of 1977.
1.4
-------
FEDERAL ACQUISITION AND ASSISTANCE
ACQUISITION
vs.
ASSISTANCE
VIEWGRAPH* 5
TITLE: Federal Acquisition and Assistance
KEY POINTS:
The Federal Grant and Cooperative Agreement Act requires Federal agencies
to use a contract to acquire property or services for the direct benefit of the
Federal government, and a grant or cooperative agreement to transfer money,
property, services, or anything else of value to support or stimulate an activity
to accomplish a public purpose of assistance authorized by Federal statute.
The determining factor in choosing acquisition versus assistance is defining the
direct beneficiary. If the direct beneficiary is the Federal agency, then a
contract is the appropriate legal instrument to use. If the direct beneficiary is a
State or local government or other recipient, and the purpose of support or
stimulation is authorized by Federal statute, then a grant or cooperative
agreement is the proper legal instrument to use. (See Appendix C).
A determination that a program is principally one of acquisition or assistance
does not preclude the use of any of the types of instruments for a particular
transaction.
The program office will make the initial recommendation as to whether the
relationship is one of acquisition or assistance.
The GMO/Contract Office will review and make a final determination on
whether the aid will be provided through a contract or an assistance
agreement.
1.5
-------
CLASSIFICATION OF FEDERAL ASSISTANCE
SUBSTANTIAL FEDERAL INVOLVEMENT
vs.
GRANT \ NQ SUBSTAN11AL FEDERAL INVOLVEMENT
VIEWGRAPH* 6
TITLE: Classification of Federal Assistance
KEY POINTS:
The basis for distinguishing between a grant or cooperative agreement is
whether there is substantial Federal involvement between EPA and the
recipient during performance of the activity. Generally, there is substantial
Federal involvement where there is:
Intense monitoring by EPA
Joint operational involvement, participation, or collaboration between
EPA and the recipient
EPA review or approval of project phases within the scope of the
agreement
Examples of substantial involvement:
- Agency power to halt an activity if detailed performance specification are
not met.
- Review and approval of project phases or stages of work, prior to their
implementation.
- Agency review and approval of provisions directly related to the work that
a recipient may wish to add to any of it's proposed contracts.
- EPA approval of key personnel involved with the project, other than the
principal investigator.
- EPA and recipient collaboration during the work.
- Intensive monitoring which might permit an agency redirection of the work.
- The Agency may be required to provide equipment or work output to the
recipient before the tasks defined in the scope of work can be completed.
1.6
-------
VIEWGRAPH # 6
TITLE: Classification of Federal Assistance
KEY POINTS: CONTINUED
• If it is anticipated that the assistance agreement is to require substantial EPA
involvement, then the cooperative agreement is the appropriate funding mechanism.
If EPA's involvement will not be substantial, then the appropriate mechanism is a
grant.
• Since substantial Federal involvement often requires significant Federal resources,
it should be formally documented in the terms and conditions of the cooperative
agreement or the agreement application. The Project Officer provides the GMO
with specific language to include in the terms and conditions.
• Examples of Federal involvement that is not considered to be substantial:
- EPA approval of any work plans prior to award.
- Site visits, performance reporting, financial reporting and audits to ensure
that the objectives, terms, and conditions of the award are being met.
- Agency involvement to correct deficiencies in performance.
- Review after completion of the work.
- Administrative requirements as may be indicated in the regulations, OMB
Circulars, or statutes.
1.7
-------
DELEGATIONS OF AUTHORITY
Delegation of Authority Is Required to Award Assistance
Agreements
There are Two Separate Delegations:
- Award Authority
- Approval Authority
VIEWGRAPH # 7
TITLE: Delegations of Authority
KEY POINTS:
A delegation of authority is needed before an award can be made.
Delegation of authority is a transfer of authority from the EPA
Administrator to senior management officials in Headquarters and the
Regions that allows these officials to exercise authority on behalf of the
Administrator.
The Administrator has delegated authority to the Regional Administrators
for the approval and award of assistance agreements. Further
delegations are usually made within the Regions.
Award authority provides the authority to award funds under assistance
agreements.
Approval authority provides the authority to approve or reject an
application based on its technical merit and relevancy to the program's
missions.
The delegation will specify who receives approval authority, and who
receives award authority. Practically speaking, the Approval Official and
the Award Official may be the same person.
1.8
-------
REQUESTS FOR DELEGATIONS OF AUTHORITY
Should Be Evaluated By EPA's Management and
Organization Division for Consistency with Existing
Authorities
Should be Submitted to GAD for Assistance with Drafting
Must Be Approved by the EPA Administrator
VIEWGRAPH # 8
TITLE: Requests for Delegations of Authority
KEY POINTS:
When a new financial assistance program is introduced, the Headquarters
Program Office must request a delegation of authority from the Administrator.
Frequently, a grant award is delayed because the delegation of authority is not
requested far enough in advance.
Assistance in drafting delegations is available from the Grants Administration
Division (GAD). Although the format may vary, the following information is
required:
a. Authority: describes the specific authority being delegated, including a citation
to the current relevant statute, regulation, or Executive Order.
b. To Whom Delegated: identifies, by title, the senior Agency official(s) to whom
the Administrator will delegate the authority.
c. Limitations (optional): delineates any conditions or restrictions placed on the
exercise of the authority (such as operating procedures between organizations
sharing the delegated authority).
d. Re-delegation of Authority: indicates whether the authority may be
re-delegated to a lower level. If so, identify the lowest level. If not, say so.
e. Additional References (optional): usually contains citations or comments that
support or clarify the delegated authority and is a helpful reference for offices
implementing the delegated authority.
Once the Administrator approves a delegation, the EPA's Management and
Organization Division records the delegation in the Agency Delegations Manual.
Regional re-delegation should be documented by the Regional Office and
maintained in the delegations manual.
1.9
-------
KEY EPA OFFICIALS
INVOLVED IN THE AWARD PROCESS
• Approval Official
(Program Office)
Award Official (Regional
Administrator or Delegate)
Office of Congressional Liaison
VIEWGRAPH # 9
TITLE: Key EPA Officials Involved in the Award Process
KEY POINTS:
The Approval Official and the Award Official play separate roles during the
award process.
The Award Official for regionally-administered programs is either the Regional
Administrator, the Assistant Regional Administrator, or the Division Director,
depending upon the region. The Award Official is responsible for ensuring that
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 offer.
The Approval Official is from the program office and is responsible for approving
or rejecting an assistance application on the basis of technical/programmatic
considerations.
An assistance offer may not be disclosed to the recipient or others outside of
EPA until the Congressional representatives of the potential recipient are
notified of the intended award. Even after the agreement has been signed,
unless the Office of the Congressional Liaison fQCL) allows otherwise, the
Award Official may not inform the recipient of the assistance offer for five
business days following his/her signing the agreement. (Additional information
may be found in Chapters 15 and 16 of the Assistance Administration Manual.)
1.10
-------
CATALOG OF
FEDERAL DOMESTIC ASSISTANCE
Provides Detailed Information on EPA's Available Assistance
Programs
Lists Programs by EPA Program Office
VIEWGRAPH *10
TITLE: Catalog of Federal Domestic Assistance
KEY POINTS:
The Catalog of Federal Domestic Assistance is published by the Office of
Management and Budget and the General Services Administration to provide
information to potential recipients regarding current Federal programs.
In the FY 1992 CFDA, EPA had 43 Federal assistance programs from seven
EPA program offices listed.
As required by the Federal Program Information Act, Assistance Administrators
periodically (usually twice a year) review and update their programs listed, or
scheduled to be listed in the Catalog of Federal Domestic Assistance.
Assistance Administrators send the results of the review and classification to the
GIAB, which provides the final program description to GSA for inclusion in the
CFDA.
For a variety of reasons, several programs are not listed in the CFDA ,
Fellowship programs, new programs that do not meet CFDA publication
deadlines, some training programs, etc. In addition to these programs, three
additional types of programs are not listed in the CFDA: "pilot" programs, "one
time only" programs, and "special studies, investigations or surveys."
1.11
-------
CFDA NUMBERING SYSTEM
66 XXX
III |
EPA
PROGRAM OFFICE
SERIES EPA PROGRAM OFFICE
.000 Office of Air and Radiation
.400 Office of Water
.500 Office of Research and Development
.600 Office of Administration
.700 Office of Pesticides and Toxic Substances
.800 Office of Solid Waste and Emergency Response
.900 Office of Policy. Planning and Evaluation
VIEWGRAPH#11
TITLE: CFDA Numbering System
KEY POINTS:
The number 66 represents the section of the CFDA devoted to EPA programs.
The last three digits represent the EPA program office responsible for
administering the assistance program and identifies the specific program.
The EPA program offices are responsible for providing information on the
programs they administer to GAD, which ensures that the information is
published in the CFDA.
1.12
-------
ASSISTANCE ADMINISTRATION MANUAL
• Provides Policies and Procedures
Chapters Follow Phases of the
Assistance Process
Includes Numerous Relevant Circulars
and Directives as Appendices
VIEWGRAPH *12
TITLE: Assistance Administration Manual
KEY POINTS:
The AAM provides policies and procedures for managing administrative
aspects of all EPA financial assistance programs except the Scientific
Activities Overseas Program.
The AAM is organized largely according to the different phases of the
assistance process including application, award, and post-award phases.
The AAM includes reference material, such as copies of regulations and OMB
Circulars related to assistance administration.
The AAM is maintained by GAD.
1.13
-------
MODULE II
EPA BUDGET
-------
EPA BUDGET
FORMULATION AND EXECUTION
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
Explain the Basic Elements of the Federal Budget Process,
Including the Roles of the Executive and Legislative
Branches
Understand the Level of Planning Involved in Formulating
EPA's Budget
Understand the Importance of Appropriations and Budget
Execution Processes to EPA Operations
Identify the Procedures used in Funds Control
Understand the Importance of Sound Fiscal Management
VIEWGRAPHtf 1
TITLE: EPA Budget Formulation and Execution
KEY POINTS:
Project Officers should know EPA's budget formulation process in order to
understand the assistance financial data in a grant document.
This module describes the three types of appropriations used to fund EPA activities.
The module next delineates the Agency's practices with regard to funds control.
This discussion covers the issuance of Advices of Allowance, distribution of
authority to spend money, and requirements for obtaining modifications to the
allowance.
Finally, the module will highlight the importance of effective fiscal management.
-------
LIMITATIONS ON APPROPRIATIONS
EPA HAS THREE TYPES OF FUNDS FROM APPROPRIATIONS
o ANNUAL MONEY
o MULTI-YEAR MONEY
o NO-YEAR MONEY
VIEWGRAPH #2
TITLE: Limitations on Appropriations
KEY POINTS:
Congress appropriates funds by purpose, time, and amount. For
instance, the Program and Research Operations (PRO) funds are for
travel and salaries only, for one year, and may not exced the amount
specified in the law.
EPA receives annual (one-year) appropriations for operational funds
including salaries and travel and must be spent during the FY for which
they were appropriated. If not spent during that FY, the funds revert back
to the Trreasury.
Multi-year funds include continuing program and project assistance.
Similar to one-year funds, these funds revert to the Treasury if not
obligated during the two years identified in the appropriations.
EPA receives no-year money for its continuing and project type
assistance for construction grants, Superfund, and Leaking Underground
Storage Tanks (LUST). This type of appropriation can be carried over
into successive fiscal years and does not expire until all of the authority
has been used.
22
-------
FUNDS CONTROL
OMB
APPORTIONS FUNDS
TO EPA
L
EPA OC ALLOCATES FUNDS
TO HO AND REGIONAL
ALLOWANCE HOLDERS
THROUGH
OPERATING PLANS
L
HO AND REGIONAL OFRCES COMMIT.
OBLIGATE, AND EXPEND FUNDS
VIEWGRAPH # 3
TITLE: Funds Control
KEY POINTS:
While Congress appropriates funds for EPA, OMB apportions funds to the Agency
each quarter, thereby limiting the obligations and expenditures the Agency can
make each quarter.
EPA's Office of the Comptroller (OC), in turn, allots funds to Headquarters and
Regional allowance holders. An allowance holder is an individual who is
responsible for monitoring and reporting on the status of funds covered in the
allowance.
Funds are passed down to Headquarters and Regional allowance holders by
means of an Operating Plan, which may be followed by an Advice of Allowance
(AOA). The Operating Plan provides spending authority to each allowance holder,
including the authority to commit, obligate, and expend funds.
A commitment is a formal action to reserve funds in an allowance for a
specific purpose in the future (e.g., grants, contracts, payroll).
An obligation is a binding agreement to spend a given amount of money for
a transaction that occurs during a given period. An obligation occurs when
an award is made from the allowance. Payment may be made either during
the same period or during a future period.
An expenditure occurs when a payment is made for goods and services
received.
23
-------
VIEWGRAPH # 3
TITLE: Funds Control
KEY POINTS: Continued
An Allowance Holder's spending authority may include the authority to use
funds for operating excpenses and programmatic resources.
Although many of EPA's assistance agreements and contracts are funded
with multiple-year or no-year money, the Operating Plan is issued
(including new year appropriations and prior year carry-over) at the
beginning of the fiscal year and revised during the year. The Operating
Plan is limited to 1 year, so a multi-year appropriation has to have a new
Advice of Allowance for each year of the 2 year life of the funds.
All EPA financial data, including commitments, obligations, and
expenditures, is recorded in the Integrated Financial Management System
(IFMS), which serves as the Agency's automated General Ledger.
24
-------
OPERATING PLAN (OP)
PROCESS AND PROCEDURES
The OP Is Necessary to Ensure that EPA does not Exceed Its
Appropriation or Apportionment
The Allowance Holders Distribute the OP to Responsibility
Centers
• New Obligation Authority
• Carryover Authority
Funds May Be Shifted Via A Reprogrammlng Request
VIEWGRAPH # 4
TITLE: Advice of Allowance (AOA) Process and Procedures
KEY POINTS:
The Integrated Financial Management System (IFMS) produces a report
entitled "The Environmental Protection Agency's Approved Operating
Plan." This report is provided to each Allowance Holder and is broken
out by appropriation, e.g., LUST, IG.
The OC notifies each Allowance Holder through the OP at the first of the
year the amount they will have for the year. The OP includes any
special restrictions or requirements. Upon receipt, the Allowance
Holders distribute the funds to the responsibility centers within the
allowance (e.g., Office of the Regional Administrator, Superfund , etc.).
This distribution provides managers with parameters with which to direct
the operations of their responsibility center; however, the Allowance
Holder is responsible for ensuring that over-obligations do not occur.
There are two categories of allowances: New Obligation Authority and
Carryover Authority. New Obligation Authority is based on the eight
Congressional Appropriations which are funded each year (PRO,
AC&C, SF, R&D, CG, B&F, LUST, and IG). Agency Carryover
Authority is used to spend unobligated balances remaining in multi-year
25
-------
VIEWGRAPH* 4
TITLE: Advice of Allowance (AOA) Process and Procedures
KEY POINTS: Continued
appropriations (Multi-year and no-year funds). (Agency Carryover
Authority is a distribution of appropriated funds that EPA did not
obligate or spend before the end of the fiscal year, and is not to be
confused with the term "carryover" under a specific grant award,
which relates to funds awarded but not spent by the recipient by the
end of the budget period.) Both New Obligation Authority and
Carryover Authority funds in the OP are displayed in conformance
with the EPA Budget classification structure (see next two slides).
The Allowance Holder can request a redistribution of resources within
the funding limits of the OP (there is a $500,000 limit for
reprogramming funds between programs) or can request additional
funding through a reprogramming request entered into IFMS.
26
-------
PROGRAM ELEMENT CODE STRUCTURE
PROGRAM ELEMENT NUMBER
SP _ B -
C RESEARCH I DEVELOPMENT
D BUILDINGS I FACILITIES
F LUST TRUST FUND
a CONSTRUCTION GRANTS
H. OPRNS. RESEARCH* FACILITIES
1 ABATE. CONTROL. tCOMP-ClO
K.MD-C/O
U AC1C REIMBURSABLE
M. ENERGY RID
N OFRCE OF INSPECTOR GENERAL
P FIFRA REVOLVING FUND
R HAZ SUB RESPO • REIMS
S HAZ SUB RESP - DO
T HAZ SUB RESP TR FUND
V OCEAN DUMPING FUND
V MSC CONTRIBUTED FDS
W CONSOLIDATED WORKING FUND
X. REIMBURSEHEMTS _
C DRINKING WATER
D HAZARDOUS WASTE
F RADIATION
K MULTIMEDIA
K. GENERAL
L, TOXIC SUBSTANCES
M. NEW FACILITIES
P REPAIRS IMPROVEMENTS
R. PROORAM MANAGEMENT
8 AGENCY MANAGEMENT
T REGIONAL MANAGEMENT
V LUST
ENFORCEMENT
FACILITIES
MANAGEMENT * SUPPORT
HAZ SUB RESP ACTION
HAZ SUB RESPONSE
TRUST FUND
W CONSTRUCTION GRANTS
X SUPPORT GRANTS
Y 8UPERFUNO
V REVOLVING FUND
Z. ALLOCATION ACCOUNTS
1 OIL SPILLS TRUST FUND
T CREDIT REFORM • PROG
ACCT
S CREDIT REFORM • RN
ACCT
VIEWGRAPH #5
TITLE: Program Element Code Structure
KEY POINTS:
During the Operating Year or current year budget execution, the OC controls
Allowance Holder's spending by Program Element, and within Program Element
by various individual object classes (e.g., travel, contracts, grants/loans).
The code chart above illustrates how to read a program element number and
relate the program element number to the overall budget structure. The
program element number is always a six-character code which identifies the
program element, its appropriation, its budget activity/media, function, and its
budget subactivity.
In IFMS, the Regional AOA or "Approved Operating Plan" is organized and
displayed by Program Element and object class with authorization levels by
fiscal quarter. The Approved Operating Plan with cumulative updates, is
available to the Regional Budget Office through IFMS on a daily basis.
27
-------
PROGRAM ELEMENT CODE STRUCTURE
VIEWGRAPH #5
TITLE: PROGRAM ELEMENT CODE
KEY POINTS: continued
Program element definitions are contained in the EPA "Resource
Planning and Budget Manual." The latest version of the program element
definitions is current only through FY 85. EPA Headquarters Budget
Division is in the process of updating and revising the PE definitions.
Accurate PE definitions are essential to GMOs in determining the legal
and administrative use of funds proposed for assistance awards, e.g.,
code of law, grant authority, delegation of authority.
28
-------
IFMS APPROVED OPERATING PLAN (AOP)
3RAM ELEMENT PROGRAM CLEMENT TITLE
TOTAL SPENOMO AUTHORITY
BSPB2D 04 BF NONPOINT SOURCE GRANTS)
25 CONTRACTS 196.OOO
41 GRANTS/LOANS 7.175,931 863,070 493,942 540.761
7,175,931 1.059.O70 493.942 540.761
ENVIRONMENTAL PROTECTION AGENCY
APPROVED OPERATING PLAN
•V ALLOWANCE HOLDERS 8, OBJECT CLASS
4 REGIONAL ADMINISTRATOR
04 ATLANTA
.TEMENT A CONTROL
ROORAM SUB-ELEMENT
& UMBER TITLE
OTRI
•1.000
OTH2
•1.000
OTRI OTR4
•1,000 f 1.000
TOTAL OTRI
• 1.000 POS
BSPB2D 04 BF NONPOINT SOURCE GRANTS
IS CONTRACTS 1B6.000 188.000
41 GRANTS/LOANS 7.175.831 803.070 483.042 540.761 B.071.704
T.I 75.831 1.058.070 483.842 540.761 8.268.704
823A2F 04 DA AIR QUALITY MANAGEMENT IMPLEM
2S CONTRACTS 88.800 4,256 17,000
121.896
VIEWGRAPH # 6
TITLE: IFMS - Approved Operating Plan (AOP)
KEY POINTS:
The Approved Operating Plan (AOP) is available daily through IFMS
from the Regional Budget Office. The Operating Plan displays by
Program Element and Object Class the total spending authority by
Fiscal quarter and fiscal year. Updates may be issued through IFMS
to add to or delete from the total spending authority in any given
Program Element. Updated line items are each shown on a separate
page of the Operating Plan and entitled the "Transaction History
Report."
For example, the enlarged area shows the Program Element BSPB2D
or AC&C extramural funds (appropriations Code B); Program Element
sequence (SP); Media-Air (Media Code B); function AC&C (function
code 2); and subactivity sequence D in Object Class 41 (Grants/loans)
the amount of $9,073,704. The Program Element Title (and definition
manual) identified these funds as available for Clean Water Act,
Section 319(h), Nonpoint Source Management grants and cooperative
agreements to State and local governments.
2.9
-------
Viewgraph # 6
Title: Approved Operating Plan
Key Points: continued
The object class for the AC&C Appropriation for grants and loans is
41. An assistance award cannot be issued until the needed amount
is in Object Class 41.
When funds (spending authority) are ready to be committed for an
approved/authorized purpose under a specific Program Element, a
Commitment Notice (EPA Form 2550-9) is prepared (usually by the
Budget Office for all programs) to reserve the funds. The funds are
identified on the CN from the AOP using the EPA standard 10 digit
account number, as shown on the next slide.
The Allowance Holder (AH) enters the commitment into the
Automated Document Control Record (ADCR) which downloads the
information into IFMS.
2 10
-------
EPA ACCOUNT CODE STRUCTURE
FUNDS
•o EP* Amoitfil TMa Aoaon
• 1 EP* tovklnd AfiMum
•9 Unoap India prtor V«ar Bolono*
U Odior Fodorol Fi«ia«
M »»clpmil C>»i»lbullon
M BIO1O ContrtbtiMon
M LOOM Contribution
•T OOior Comrlbullon
M AIIOWOM* Protooi COM
IB 1 PROORAM ELEMENT
|01)BSPB2D
FY
82
FORMER AWARD
O
O
o
o
o
V
o
o
681/2O1O8 1 TKO3O9
THIS ACTION
M90.000
O
O
o
272.468
IX^.OHV
O
299.599
1.542.771
| ACCOUNT HUOWEH |oBi
1 1 SBSPD4T043J
AMENDED TOTAL
O
0
O
o
o
o
o
o
o
:ECT CLAOa aaUOATtONVDEOaUOATION
41.17 S88O.OO4
ISP
1st digit
laat digit el yaar
el appropriation
2nd.3rd.4th dlglla^ f sth.eth digit* | f 7th digit! I 8th dlgltj |8th*lOth dlglta
"™l 3 dl9'<" •• allowance holder raaponatbllrly "action el law local
program alamant coda numbar cantar *°*» numberju "ft0? •*
numbar «J2.1!,.., SF/Lual actlvhy 8F •Ma
•ponalblllty -"••—• —••-
center coda number.^
eeda latter 8F/Luat act I why
eeda
ar irackabla Ham
activity i '
option pr
8F alia
Identifier
Of traekabla Han
Identifier
VIEWGRAPH # 7
TITLE: EPA Account Code Structure
KEY POINTS:
For each Program Element, the Allowance Holder creates one or more
account numbers, against which spending actions are charged in IFMS.
The figure above shows the standard 10 digit alpha/numeric account
number for the FY 92 Nonpont Source Management Program .
The first digit is the last digit of the Source of Year Funding e.g., FY 1992.
The 2nd, 3rd, and 4th digits are the first 3 digits of the program element
number , e.g. BSP.
The 5th and 6th digits identify the allowance holders, e.g., 04 = Region 4.
The 7th digit identifies the Responsibility Center, e.g., T=AC&C, Program
Grants.
2 1 1
-------
VIEWGRAPH # 7
Title: EPA Account Code Structure
Key Points: Continued
The 8th digit identifies the Section of Law by use of a pseudo code. Zero
is used where the program element is applicable to only one section of
law. The numbers 1,2,3, 4, or 5 will be used where more than one
Section of Law is applicable to a single program element. For Superfund
awards, this digit identifies the SF activity code, and for LUST awards, the
activity code. When an account number is for a trackable item, (see
Comptroller Policy Announcement No. 91-01) the 8th digit is a special
"trackable item" code. Reports of spending for trackable items can be
retrieved by reading this field.
The 9th and 10th digits are an alpha/numeric local option for all program
elements except Superfund and trackable items. For Superfund, these
fields are used for the site identifier code; for trackable items, the item
identifier.
2 12
-------
EFFECTIVE FISCAL MANAGEMENT
Necessary to Account for Funds
Necessary for Effective Program Management
Crucial for Cost Recovery under Superfund
VIEWGRAPH* 8
TITLE: Effective Fiscal Management
KEY POINTS:
EPA activities are monitored closely by various interests to ensure that the
Agency's funding is used appropriately. These interests include: Congress,
EPA Inspector General, EPA HQ Comptroller's Office, EPA HQ Program
Offices, Regional Program Offices, the General Accounting Office (GAO),
State Offices, and the Public. Sound fiscal management is important for
accountability to all of these interests.
Sound fiscal management is also critical for assessing progress and setting
project goals. It allows the organization to determine efficiency and permits a
realistic evaluation of future accomplishments.
In the Superfund program, there is an added importance to this accountability:
cost recovery. The recovery of costs incurred in the cleanup of Superfund
sites through settlements with responsible parties is not possible if the Agency
cannot demonstrate that all cleanup costs were justified and well-documented.
2 13
-------
MODULE III
REGULATORY AUTHORITY,
REQUIREMENTS, &
GUIDANCE
-------
REQUIREMENTS
GOVERNING EPA ASSISTANCE AGREEMENTS
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Explain the Role of Executive Orders, OMB Circulars, the
Code of Federal Regulations, and EPA Policies
• Identify Key Executive Orders, OMB Circulars, Federal
Regulations, and Policies Governing EPA Assistance
Programs
• Discuss the Special Provisions Governing Indian Tribal
Governments
VIEWGRAPH* 1
TITLE: Requirements Governing EPA Assistance Agreements
KEY POINTS:
EPA assistance is governed by many Federal requirements. Knowledge of
these requirements is very useful to personnel involved with the various phases
of the assistance administration process.
This module describes the contents of Executive Orders, OMB Circulars,
Federal regulations, and EPA policies.
Next, this module reviews the primary requirements governing EPA assistance
programs and the special provisions pertaining to Indian Tribal governments.
3.1
-------
TYPES OF REQUIREMENTS
GOVERNING EPA ASSISTANCE
• Federal Statutes
• Executive Orders
• OMB Circulars
• Codified Federal Regulations
• Agency Orders and Policies
VIEWGRAPH* 2
TITLE: Types of Requirements Governing EPA Assistance
KEY POINTS:
Federal statutes are laws enacted by the United States Congress and signed by
the President. EPA administrative and program activities must be conducted
consistent with these requirements. Deviation from statutory requirements is
not allowed. (For more information regarding the primary statutes governing
EPA assistance programs, see Module I.)
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.
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. EPA regulations are developed consistent with OMB
Circulars.
The Code of Federal Regulations contains rules developed by Federal agencies
and issued by the Federal government to implement Federal statutes or agency
policy, and are therefore legally enforceable. A Federal regulation cannot
conflict with a statute. Codified Federal regulations may govern the activities of
a Federal agency or the general public. EPA regulations are codified in Title 40
of the Code of Federal Regulations.
EPA Orders and policies are agency requirements issued by EPA
Headquarters. In areas covered by both an order and a policy, the order
supercedes the policy. Regions may also issue regional policies.
3.2
-------
EXECUTIVE ORDERS
E.0.11625 National Minority Business Enterprise Program
E.0.12432 Minority Business Enterprise Development
E.0.11738 Clean Air/Water Violators
E.0.12138 National Women's Business Enterprise Policy
E.0.12372 Intergovernmental Review of Federal Programs
E.0.12549 Debamnent and Suspension Rules For
Nonprocurement Activities
VIEWGRAPH* 3
TITLE: Executive Orders
KEY POINTS:
This viewgraph identifies the primary executive orders governing EPA assistance
agreements.
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 growth 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 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 grantees 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
establish programs to deliver management and technical assistance to
MBEs.
3.3
-------
VIEWGRAPH # 3 (cont.)
TITLE: Executive Orders
KEY POINTS:
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.
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
to take affirmative action in support of women's business enterprise
to require the recipient's of federal assistance to take appropriate
affirmative action in support of women's business enterprise, and to
prohibit actions or policies which discriminate against women's business
enterprise. Federal agencies were also required to prescribe sanctions
for noncompliance.
Executive Order 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.
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.
3.4
-------
OMB CIRCULARS
A-21 Cost Principles tor Educational Institutions
A-87 Cost Principles tor State and Local Governments
A-122 Cost PrlnciplM tor Non-Profit Organizations
A-102 Uniterm Administrative Requirements for
Granls-ln-Ald to State and Local Governments
A-110 Grants and Agreements with Institutions of
Higher Education. Hospitals, and Other
Non-Profit Organizations
A-128 Audits of Stats .Local Governments, ft Indian Tribal Governments
A-133 Audits of Institutions of Higher Learning and
Other Non-Protlt Organizations
VIEWGRAPH# 4
TITLE: OMB Circulars
KEY POINTS:
This viewgraph identifies the primary OMB Circulars governing EPA assistance
programs.
OMB Circulars A-21, A-87, and A-122 provide the cost principles for charging
project costs to Federal assistance agreements or grants. More specifically,
these OMB Circulars provide guidelines for determining whether or not project
costs are allowable. (Cost principles are defined as the rules governing
Federal reimbursement of project costs.)
OMB Circular A-21, issued February 26,1979, and last revised on
December 2,1986, 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 last revised May 19,
1987, provides guidelines for non-profit organizations other than States,
local governments, and educational institutions.
OMB Circulars A-102 and A-110 provide uniform administrative requirements
for managing the pre-award, award, and post-award phases of grant
management.
OMB Circular A-102, issued on March 3,1988, establishes
requirements for State and local governments.
OMB Circular A-110, issued April 1, 1976, establishes requirements for
institutions of higher learning, hospitals, and other non-profit
organizations.
3.5
-------
VIEWGRAPH # 4 (cont.)
TITLE: OMB Circulars
KEY POINTS:
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, local governments, and Federally
recognized Indian tribal governments.
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.
Additional audit requirements for financial assistance programs are
described in Module XII.
3.6
-------
TITLE 40 OF THE
CODE OF FEDERAL REGULATIONS
PART 29
PART 30
PART 31
PART 32
PART 33
PART 35
PART 40
PART 45
PART 46
PART 47
Intergovernmental Review of EPA Programs and
Activities
General Regulation lor Assistance Programs For
Other Than Stale and Local Governments
Uniform Administrative Requirements For Grants
•nd Cooperative Agreements to Ststs and Local
Governments
Government-wide Determent and Suspension
(Nonprocurement) and Government-wide
Requirements lor a Drug-Free Workplace
Procurement Under Assistance Agreements
State and Local Assistance
Research and Demonstration Grants
Training Assistance
Fellowships
Environmental Education
VIEWGRAPH* 5
TITLE: Title 40 of the Code of Federal Regulations
KEY POINTS:
This viewgraph illustrates the primary EPA regulations governing assistance
programs and recipients.
These regulations are described further in subsequent viewgraphs.
3.7
-------
40 CFR PART 29
• Provides Intergovernmental Review Requirements
• Applies to Most EPA Assistance Programs
• Implements Executive Order 12372
VIEWGRAPH* 6
TITLE: 40 CFR Part 29
KEY POINTS:
• 40 CFR Part 29, issued June 24,1983, provides intergovernmental review
requirements for EPA-specific programs and activities, as well as the
appropriate communication channels for voicing comments. Intergovernmental
review refers to coordinated review processes performed at two or more levels
of government.
40 CFR Part 29 implements Executive Order 12372 "Intergovernmental Review
of Federal Programs," which requires Federal agencies to allow State and local
governments the opportunity to review proposed Federal financial assistance
and direct Federal development impacting State and local programs. Further,
Executive Order 12372 provides that where feasible, and to the extent permitted
by law, State and local review processes and comments must be incorporated
into Federal programs as early in the planning stage as possible.
• Additionally, 40 CFR Part 29 implements provisions of the Intergovernmental
Cooperation Act of 1968 and the Demonstration Cities and Metropolitan
Development Act of 1966.
• Indian Tribes are exempt from intergovernmental review requirements, but are
encouraged to comply.
3.8
-------
40 CFR PART 30
Provides Administrative Requirements for Assistance
Agreements to Other Than State and Local Governments
Implements OMB Circulars A-21, A-110, and A-122
VIEWGRAPH* 7
TITLE: 40 CFR Part 30
KEY POINTS:
40 CFR Part 30 "General Regulation for Assistance Programs for Other Than
State and Local Governments" provides administrative requirements for all
grant recipients other than States, local governments, and Indian Tribes.
Further, it establishes quality assurance guidance requirements.
40 CFR Part 30 implements: OMB Circular A-21 "Cost Principles for Educational
Institutions," OMB Circular A-110 "Grants and Agreements With Institutions of
Higher Education, Hospitals, and Other Non-profit Organizations," and 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."
3.9
-------
40 CFR PART 31
Provides Administrative Requirements for Assistance
Agreements to State, Local, and Indian Tribal
Governments
• Replaced 40 CFR Part 30 for Grants to These Recipients
• Implements OMB Circulars A-87, A-102, and A-128
VIEWGRAPH# 8
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.
Prior to the issuance of 40 CFR Part 31, uniform administrative requirements for
State and local governments were governed by 40 CFR Part 30, which now only
governs assistance to non-profit organizations and interests other than States,
local governments, and Indian Tribes.
Audit requirements contained in 40 CFR Part 31 are contained in 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."
3.10
-------
40 CFR PART 32
Implements Executive Order 12549, Debarment and
Suspension Rules For Nonprocurement Activities
Describes Drug-Free Workplace Requirements For
Assistance Recipients
VIEWGRAPHtf 9
TITLE: 40 CFR Part 32
KEY POINTS:
40 CFR Part 32, issued May 26,1988, and last amended May 3,1990,
implements Section 3 and Section 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.
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.
3.11
-------
40 CFR PART 33
Describes Procurement Requirements for EPA
Assistance Agreements for Other Than States, Local
Governments, and Indian Tribes
VIEWGRAPH* 10
TITLE: 40 CFR Part 33
KEY POINTS:
40 CFR Part 33, issued March 28,1983 and last amended March 11,1988,
describes requirements for procurement under assistance agreements for
recipients other than States, local governments, and Indian Tribes. This
regulation discusses procurement of supplies, services, and construction under
EPA assistance agreements. This regulation supplements 40 CFR Parts 30,
32, and 35.
3.12
-------
40 CFR PART 35
• Provides Program-Specific Assistance
Requirements
• Contains 15 Subparts Including
Subpart O (Supedund)
VIEWGRAPHf 11
TITLE: 40 CFR Part 35
KEY POINTS:
40 CFR Part 35, issued October 12,1982, was last amended on June 5,1990,
when Subpart 0 was finalized. While 40 CFR Parts 30 and 31 provide the
general assistance requirements, 40 CFR Part 35 provides the program-specific
assistance requirements.
• 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)
Financial Assistance for the National Estuary Program (Subpart P)
Subparts B, F, G, L, and N are reserved for future use.
3.13
-------
EPA POLICIES/GUIDANCE
Performance-Based Assistance
Carryover of Unobligated Balances
Use of Dlsadvantaged Business Enterprises
Pollution Prevention Guidance
Recycled Paper
VIEWGRAPH* 12
TITLE: EPA Policies/Guidance
KEY POINTS:
• 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 D).
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.
- 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 appropriations
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 40 CFR 33.240 (for universities and other nonprofits); 40 CFR
31.36(e) (for local governments and Indian tribes); and 40 CFR 35.6580 (for
Superfund recipients); and in the Assistant Administrator's February 15, 1991,
DBE program plan. The plan sets forth how EPA will implement the
Appropriations Act requirements which established an 8% objective for DBEs.
3.14
-------
VIEWGRAPH4M3
TITLE: EPA Policies/Guidance
KEY POINTS: (Continued)
- A minority business enterprise (MBE) is defined as a business which is certified as
socially and economically disadvantaged by the Small Business Administration or
as a minority business enterprise by a State or Federal agency, or is an
independent business concern which is at least 51 percent owned and controlled
by minority group members who are U.S. citizens.
- A women's business enterprise (WBE) is a business certified as such by a State or
Federal agency or one which is at least 51 percent owned by women who also
control and operate it and are U.S. citizens.
- Recipients of assistance agreements must comply with the six affirmative steps
pertaining to MBE/WBE and small businesses (except for institutions of higher
education and other non-profit organizations). (See Appendix M). Specifically,
recipients must:
Include qualified MBE/WBE and small businesses on solicitation lists
Actively solicit these firms whenever they are potential sources
Divide the contracts into smaller tasks or quantities to permit maximum
participation when economically feasible
Offer delivery schedules which allow MBE/WBE and small business
participation when requirements permit
Use the services of the Small Business Administration and the Minority
Business Development Agency of the Commerce Department
Require the contractor to take these affirmative steps when subcontracts
are let by a contractor under an assistance agreement.
The Agency's implementation of pollution prevention is provided in EPA's State
Grants Guidance: Integration of Pollution Prevention, dated November 12, 1992.
This guidance establishes the Agency's pollution prevention commitment by:
- Promoting pollution prevention in State programs supported by Federal grants;
- 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 grant requirements.
EPA Order 1000.25, "Use of Recycled Paper," issued January 24,1990, and
amended April 26,1992, requires that contracts and assistance agreements
specify that reports delivered to EPA in conjunction with an EPA contract or
assistance agreement must be printed on recycled paper (whether or not such
paper is more costly.
3.15
-------
SPECIAL PROVISIONS FOR
INDIAN TRIBAL GOVERNMENTS
• Minimum Requirements For Establishing "Treatment as
States"
• Exemption from Certain Statutory Requirements, Including
Land Ownership Requirements
• Exclusion from Intergovernmental Review
• Multi-Media Grants
VIEWGRAPH* 14
TITLE: Special Provisions for Indian Tribal Governments
KEY POINTS:
Under the TAS policy, a tribe need only document once that they are
A Federally recognized Indian Tribal government;
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.
Under Superfund, Indian Tribal governments are exempt from some of the
CERCLA statutory requirements, e.g., cost-sharing and off site disposal, but must
comply with the statutory requirement concerning acquisition to title to land.
3.16
-------
MODULE IV
INFORMATION SYSTEMS
-------
EPA INFORMATION SYSTEMS
MANAGEMENT TOOLS USED BY EPA:
• Grants Information and Control System (GICS)
• Automated Grants Document Systems (RAGDS)
• Interagency Agreement Management System (IAMS)
• Management Audit Tracking System (MATS)
• Integrated Financial Management System (IFMS)
VIEWGRAPH# 1
TITLE: EPA Information Systems
KEY POINTS:
A number of EPA information systems contain data relevant to the phases of
assistance administration.
GICS is a national information system providing tracking and reporting for all
EPA financial assistance programs.
GICS data is derived from input provided by Headquarters, regions, and states,
•depending on the program involved. Headquarters, regions, and states can also
use GICS to monitor assistance program activities.
The grant award documents and the Interagency Agreemetns are now being
produced on computer by the GMO. The Regional GMO use the Regional
Grants Automated Document System (RAGDS) to produce a grant award, and
the Interagency Agreement Management System (IAMS) to produce Interagency
Agreements.
EPA's Integrated Financial Management System (IFMS), implemented in 1990,
is an information system used for accounting and financial reporting. It is both
an on-line and batch system accessible at Headquarters and regional offices.
IFMS data includes the financial information from numerous sources, such as
grants, cooperative agreements, lAGs, procurement requests, invoices, and
timecards.
When the GICS and IFMS interface is complete, much of the financial data on
EPA assistance awards will be available to GMOs and program offices.
4.1
-------
VIEWGRAPH* 1
TITLE: EPA Information Systems (continued)
KEY POINTS:
MATS was developed to implement the Inspector General Act Amendments of
1988. This act requires Federal agencies to track audit follow-up actions until
all corrective actions are complete. The Act also requires agencies to report
to Congress on audit resolution and the implementation of corrective actions.
In order to meet the requirements of the Inspector General Act Amendments
and to administer MATS, EPA issued a new policy, dated December 22,1989,
to strengthen the Agency's audit management capability. Among other things,
the policy requires each Assistant Administrator to designate the director of
their central management office, and each Regional Administrator to
designate their Assistant Regional Administrator, as the Audit Management
Official responsible for developing an office operating directive to manage the
audit process and for designating an Audit Follow-up Coordinator. The Audit
Follow-up Coordinator is responsible for the day-to-day, overall audit
management, response, and resolution process.
4.2
-------
MODULE V
DEVELOPING AND
NEGOTIATING THE
APPLICATION
-------
THE ASSISTANCE AGREEMENT:
APPLICATION PHASE
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Explain the Role of Grants Management Offices (GMOs) during
Pre-Application Assistance
• Explain the Role of GMOs upon Receipt of Formal Assistance
Applications/Amendments
• Identify the Basic Information Applicants must Provide in an
Application
VIEWGRAPH # 1
TITLE: The Assistance Agreement: Application Phase
KEY POINTS:
This module begins the discussion of the role played by Grants Management
Offices (GMO) and Project Officer (PO) with respect to the administrative and
programmatic management of assistance agreements.
The role of GMOs and POs begins with the assistance provided to prospective
applicants as they develop their applications (pre-application assistance), and
continues through the administrative evaluation of applications received, the
coordination of technical evaluations provided by program personnel, the
coordination or oversight of the various steps involved in making an award, and
the administration and closeout of awards.
This module focuses on the roles of the GMOs and POs prior to award. Central to
the role you play during the development of the agreement is the analysis and
approval of the pre-application/application materials (which, upon approval,
become part of the assistance agreement). At the end of this module, you will be
familiar with these materials, and will be able to identify the basic information
applicants must provide in an application for assistance.
The information required in an application varies, depending upon the type of
assistance sought. This module describes general application requirements, and
makes no attempt to cover the additional requirements under each program.
5.1
-------
PREAPPLICATION ASSISTANCE
• Available from EPA Headquarters, Regions, and State
Program Personnel
Informal or Formal Inquiry
EPA Response Within 45 Days of Receipt
VIEWGRAPH # 2
TITLE: Preapplication Assistance
KEY POINTS:
EPA offers potential applicants the opportunity to work with the Agency to
develop a properly completed application that will ensure a timely award.
Depending upon the assistance sought, EPA encourages applicants to seek
preapplication assistance from EPA Headquarters, Regions, or State program
personnel.
Preapplication assistance can be obtained by submitting a formal inquiry on
Standard Form 424 (SF-424), although a letter containing the same information
may be substituted for the official form. Formal preapplications or informal written
proposals, except unsolicited proposals (See Chapter 3 of the Assistance
Administration Manual for information on unsolicited proposals), must be
submitted to the appropriate GMO for all regionally administered programs. It is
the responsibility of these offices to provide application kits, forms, instructions,
and attachments relevant to the programs they administer.
Preapplication or negotiation sessions are often conducted by the EPA Project
Officer and Grant Specialist to provide the applicant with basic information on
preparation of the application, administrative and programmatic requirements,
and other pertinent planning matters.
To allow sufficient time for thorough review, preapplication assistance should be
sought by the applicant well before the target quarter for funding. The
appropriate timing depends on the type of assistance sought by the applicant.
Program-specific guidance may be distributed by the Agency at the time that
applications are distributed to recipients.
5.2
-------
EVALUATING AND PROCESSING
THE APPLICATION
GMO Responsibilities:
- Ensure that the application is complete
• Review for Statutory Eligibility
• Prepare administrative comments
- Forward Application for Program Evaluation
Project Officers Responsibilities:
- Review for technical merit
- Prepare programmatic/technical comments on workplan
VIEWGRAPH # 3
TITLE: Evaluating and Processing the Application
KEY POINTS:
The GMO is responsible for the following:
- Receiving all original applications for Federal assistance.
- Assigning the EPA Assistance Identification Number.
- Evaluating each application for statutory eligibility of the applicant and
inclusion of all necessary documentation. Ineligible applications should be
returned to the applicant.
The Project Officer is responsible for the following:
- Evaluating the workplan to ensure that it complies with program guidance.
- Preparing technical comments on the application.
- Ensuring that proposed costs are necessary to carry out the proposed
workplan objectives.
5.3
-------
ASSISTANCE IDENTIFICATION NUMBER
Program Code
Serial Number
Sequence Number
Amendment Designator
Al oooooo QQ Q
VIEWGRAPH* 4
TITLE: Assistance Identification Number
KEY POINTS:
The EPA Assistance Identification Number consists of eleven characters and
uses both letters of the alphabet and numbers. Sequential identification of
these numbers is as follows:
Program Code. A two-character alpha-numeric code identifies the assistance
program.
Serial Number. A six-position number identifies a specific assistance
application or agreement.
Sequence Number. A two-position number identifies a fiscal year or budget
period in all assistance programs other than Wastewater Treatment
Construction and State Revolving Fund projects, where it identifies a specific
project.
Pre-Application/Amendment Designator. A one-position code identifies a
specific formal amendment to an assistance agreement or amendment.
Numerals "0-9" are used to indicate no amendments through the ninth
amendment and the alpha codes "A-Z" are used to indicate the tenth through
thirty-fifth amendment. An asterisk (*) identifies a pre-application.
5.4
-------
THE OFFICIAL
EPA ASSISTANCE FILE
OFFICIAL ASSISTANCE FILE
L
ADMINISTRATIVE FILE 1
c
PRCjGRAMFILE *}
r FINANCIALFILE "^
VIEWGRAPH # 5
TITLE: The Official EPA Assistance File
KEY POINTS:
Immediately after assigning an EPA Assistance Identification Number,
the GMO is responsible for establishing the official administrative file.
The official administrative file is maintained by the GMO and is
supported by the financial documentation maintained by the Financial
Management Office (FMO), and by the technical documentation
maintained in the files of the program office and the EPA Project
Officer. (See Appendix F).
The official administrative file contains information on EPA's funding
decisions (or decisions to reject funding), principal operating activities,
and required reporting through project completion, closeout, and audit.
The sponsoring program office/EPA Project Officer establishes and
maintains the official technical record of activities under supported
assistance agreements.
The FMO establishes, maintains, and retires the official financial
records of assistance agreements. A copy of Financial Status Reports
and certain other financial documents also will be included in the FMO's
file.
5.5
-------
VIEWGRAPH* 5 (cont.)
TITLE: The Official EPA Assistance File
KEY POINTS:
The official EPA financial assistance file may consist of paper (hard copy)
records, or, when specifically authorized by the Agency Records Management
Officer (Information Management and Services Division), a combination of
paper and microform records.
Appendix F of this manual contains a list of the contents of the Official EPA
Assistance File maintained by the GMO and contains a list of the contents of
the Official EPA Project File maintained by the Project Officer.
5.6
-------
THE APPLICATION FORM
The "Application for Federal Assistance" (Standard
Form 424) Consists of:
SF424
• Face sheet
• Budget Information
• Assurances
• Program Narrative Attachment
VIEWGRAPH # 6
TITLE: The Application Form
KEY POINTS:
It is the responsibility of the GMO to review the application to ensure that all
information necessary to receive funding is present and correct. This
process begins with an administrative review of the application for
completeness.
GMOs and Project Officers need a thorough working knowledge of the
application form and all attachments in order to assist the applicant in
preparing the application package and to review the applicant's submission.
Even if an application has already been through a preapplication
evaluation, it still may be necessary for the GMO and program staff to work
with the applicant to revise the application further before it is accepted for a
complete, formal review.
It is the responsibility of the Project Officer to review the application to
ensure that all budget items, proposed contracting/subcontracting and work
elements are reasonable and necessary.
The application form is Standard Form 424. The SF-424 is designed so
that application can be made for funds relating to all EPA programs.
Because of its general applicability, not all areas of the form apply to all
programs. A discussion of each part of the application form, as well as the
most commonly required attachments follows. (See Appendix G).
5.7
-------
FACESHEET
GENERAL SUMMARY INFORMATION
SF424
Facesheet:
• General
Information
• Project
Summary
Provides General Information
About Applicant
Provides Summary Information
on the Proposed Project
VIEWGRAPH* 7
TITLE: Facesheet General Summary Information
KEY POINTS:
The facesheet of the SF-424 provides general administrative information
about the applicant and the proposed project.
Grants specialists review the SF-424 facesheet to ensure that all items
have been properly completed. Certain information need not be entered on
the facesheet if the submission is an amendment, since this information is
included on the original application.
If the award of assistance involves verification of the recipient having met
the required level of effort under a previous award (as with assistance
provided under Sections 106 and 205(g) of the Clean Water Act), the most
recent Financial Status Report and supporting documentation must be
carefully reviewed to ensure that the requirement is met.
5.8
-------
BUDGET INFORMATION
SF 424-A
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 Informa-
tion
VIEWGRAPH # 8
TITLE: Budget Information
KEY POINTS:
• The SF-424A - Budget Information is used to indicate total funding needs and
summary information for proposed projects.
Sections A, B, C, and D should include budget estimates for the whole project
except when applying for assistance which requires Federal authorization in
annual or other funding period increments. In the latter case, Sections A, B, C,
and D should provide the budget for the first budget period (usually one year)
and Section E should present the need for Federal assistance in the
subsequent budget periods. The SF-424A contains additional detailed
instructions for its use.
The applicant is responsible for preparing the project budget. Sources of
information used in developing the project budget will vary depending on the
type of project.
It is the Region's responsibility to ensure that budget information is complete,
technically sound, and consistent with Federal statutes, regulations, and
policies. The program office is responsible for reviewing a proposed budget
against the statement of work and for determining programmatic eligibility.
• The GMO, and the program office, are responsible for evaluating proposed
budgets. Specifically, the GMO is responsible for performing a review of the
budget to ensure that costs are allowable (i.e., based upon the required cost or
price analysis consistent with the cost principles discussed in Module III),
allocable (i.e., relevant to the project to be funded) and reasonable (i.e.
consistent with costs covered under other agreements funding similar work
under similar circumstances). The GMO will verify the current indirect cost rate
and perform an arithmetic review of the budget. This includes checking all
computations for accuracy. The program office will verify that any purchase of
equipment or property and proposed staffing and travel are reasonable and
necessary.
5.9
-------
VIEWGRAPH* 8 (cont.)
TITLE: Budget Information
KEY POINTS:
• Section A - Budget Information provides for a budget summary.
Section B - Budget Categories identifies budget amounts by object class
categories. Object class categories include: personnel, fringe benefits, travel,
equipment, supplies, contractual, construction, indirect costs, and other.
Usually this page is supplemented by additional budget breakdowns.
As an attachment to Section B, the applicant must include separate sheets to
provide sufficient documentation supporting the total cost of each object class
category entry. This is important because this documentation is the basis upon
which the GMO can perform an analysis to determine how the applicant
established the budget, and whether each cost listed is reasonable, allowable,
eligible and allocable. This documentation also allows the program office to
determine program eligibility. (See Appendix I for a guide for preparing budget
detail and an example.)
For personnel, it is important for the applicant to identify all staff positions by
title, annual salary, and the percentage of time that each position will be
assigned to the grant program.
For travel, the applicant should indicate the number of trips planned, expected
mileage, airfare, per diem, and other costs for each type of travel, as well as
the purpose of the travel.
• For equipment, each item needs to be identified and its associated cost
indicated. This is important, because once an assistance agreement is
accepted, even if specific items were not reviewed and evaluated, they are
considered approved. (Equipment is discussed further in Module X).
For indirect costs, a copy of the current indirect cost rate agreement approved
by the cognizant agency should be included as an attachment to the
application, or should be on file in the Grants Management Office.
Section C - Non-Federal Resources should be completed to list funding
sources and amounts other than those provided by EPA or other Federal
agencies. In cost share situations, the applicant must enter information into
this section.
• Section D - Forecasted Cash Needs is not mandatory for the application. If
completed, this section shows the estimated level of expenditures over the
fiscal year.
• Section E - Budget Estimates of Federal Funds Needed for Balance of the
Project provides useful information to project 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 within this form for remarks to allow the applicant to clarify other
parts or sections of the application.
5.10
-------
ASSURANCES
SF 424 - B
• Applicable
laws
• Assurance
of compliance
Standard Form 424-B Does the Following:
• Outlines Applicable Federal Laws for
Applicants
• Assures EPA of an Applicant's Compliance
with Applicable Federal Requirements
VIEWGRAPH* 9
TITLE: Assurances
KEY POINTS:
The purpose of the assurances in SF 424-B is to outline for applicants the
Federal laws and statutes imposed on all Federally assisted projects.
The inclusion of these pages in the applicant package indicates the
applicant's willingness to adhere to these requirements.
The applicant must sign the second page in the signature box in order for
the application to be complete.
5.11
-------
PROJECT NARRATIVE
PROJECT NARRATIVE
I. History
• Describes the History of the
Problem, and Proposed Actions
• Indicates Compliance with
Regulatory Requirements
VIEWGRAPH* 10
TITLE: Project Narrative
KEY POINTS:
The statutes authorizing some programs require an applicant to submit a
plan before receiving assistance. For most applications, the plan will take
the form of a project proposal or narrative, which includes objectives,
strategies, and expected results; required financial, facility, equipment, and
manpower resources; and such technical and other information as required
in 40 CFR 31.11 and other program-specific regulations. The project
proposal must be included as part of the application in order for the
application to be funded.
The PO performs a technical review of the proposal. When the technical
review requires specific qualifications not available in the program office,
the GMO must obtain assistance from other EPA staff with expertise in the
particular subject area.
5.12
-------
THE APPLICATION PACKAGE
Standard I
Application 1 .
Form (SF 424) |T
Budget Detail |
+
| Project Narrative |
| Intergovernmental Review Sign-off |
• | Governor/Attorney General Letter |
| Procurement System Certification, H applicable |
| Certification Regarding Debarment and Suspension |
| Current Approved Indirect Cost Rate Agreement |
| Drug-Free Workplace Certification |
| Anil-Lobbying Certification |
| Quality Assurance Project Plan. H applicable |
VIEWGRAPH* 11
TITLE: The Application Package
KEY POINTS:
This viewgraph illustrates the key components of an application package.
The standard attachments required by all EPA assistance applications will
be discussed in the next several viewgraphs; however, grants specialists
and project officers should be aware that the list of required attachments
varies from program to program.
5.13
-------
GOVERNOR/ATTORNEY GENERAL LETTER
OFFICE OF THE GOVERNOR
DMT
Thta M1*r Mithortm that
Sincerely,
Governor of
The Certification Letter
Indicates That a State
Has The Authority to
Enter into an
Agreement with EPA
VIEWGRAPH* 12
TITLE: Governor/Attorney General Letter
KEY POINTS:
The certification letter indicates that the State organization has the official
authority from its highest governing offices to enter into an agreement with EPA.
This document should also indicate that the State has the authority to make any
statutory assurances that are necessary to complete the project.
5.14
-------
INTERGOVERNMENTAL REVIEW
Most Applications for Federal Assistance Are Subject to
Review and Comment From State and Local Entitles
VIEWGRAPH *13
TITLE: Intergovernmental Review
KEY POINTS:
The intent of the intergovernmental review 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. Under Executive Order 12372, if the application
is subject to the State's official review process, applications for Federally funded
projects must undergo intergovernmental review before EPA will obligate funds.
This procedure applies to most EPA programs.
EPA will not award assistance until it has received evidence of intergovernmental
review, or the comment period ends and comments were not received. The
comment period for a new project is 60 days and is 30 days for a continuation
unless EPA has waived or shortened it.
If the State does not have a designated single point of contact or State process
established, the applicant must comply with Section 204 of the Demonstration Cities
and Metropolitan Development Act of 1966, as amended. Section 204 requires
applicants for federally funded projects in metropolitan areas to give area-wide
agencies 60 days to review and comment on a proposed application. To do this, the
applicant must send a copy of its application to the area-wide metropolitan, regional
or local planning agency designated to perform planning for the geographical
location of the proposed project and allow the agency 60 days for review and
comment.
Indian Tribes are not required to conduct intergovernmental reviews.
5.15
-------
PROCUREMENT SYSTEM CERTIFICATION
EPA FORM
5700-48
Procurement Certification Provides
the Following:
Certification that an Applicant's Procurement
System Meets EPA Requirements
Assurance for EPA that an Applicant will
Follow EPA Procurement Regulations,
if Its System is not Certified
VIEWGRAPH # 14
TITLE: Procurement System Certification
KEY POINTS:
EPA Form 5700-48 applies to local governments, Indian Tribes, universities,
non-profit organizations and state recipients of Superfund agreements.
The procurement certification form documents whether the applicant's
procurement system meets EPA requirements and is therefore certified. If the
applicant does not certify its system or meet certification requirements, it is
required to follow 40 CFR Part 31, and allow EPA to conduct pre-award reviews
of proposed subcontracts with any contractors employed by the applicant to
conduct activities under the award.
• A completed, signed copy of the Procurement Certification Form must
accompany each application for EPA assistance. The GMO is responsible for
ensuring that the recipient sends in a completed Certification form.
5.16
-------
CERTIFICATION REGARDING
DEBARMENT AND SUSPENSION
Assistance Applicants (and Their Contractors) Must Certify That They
are not Debarred or Suspended.
VIEWGRAPH # 15
TITLE: Certification Regarding Debarment and Suspension
KEY POINTS:
Debarment and suspension are periods of exclusion from participating in
Federal assistance or contracting programs.
Debarments generally do not exceed three years; however, a longer period
of debarment may be imposed if circumstances so warrant. Debarment
procedures include an investigation, notice to the respondent, an
opportunity to be heard and finally, a written decision by the Agency's
decision official imposing the debarment.
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.
Suspended and debarred entities are listed in the General Services
Administration's publication entitled "Lists of Parties Excluded From
Federal Procurement or Nonprocurement Programs".
5.17
-------
VIEWGRAPH* 15(cont.)
TITLE: Certification Regarding Debarment and
Suspension
KEY POINTS:
Prior to the award of any Federal assistance, the applicant must certify to the
EPA that it and all its principals:
- Are not presently debarred, suspended, proposed for debarment, declared
ineligible, or voluntarily excluded from covered transactions by any Federal
department or agency;
- Have not within three years been convicted of or had a civil judgment against
them for commission of fraud or a criminal offense in connection with
obtaining or performing a public transaction, violation of antitrust statutes,
embezzlement, theft, forgery, false statements, etc.
- Are not presently indicted or criminally or civilly charged by a government
entity with violating any of the offenses listed above.
- Have not, within three years, had one or more public transactions
terminated for cause or default.
A written explanation must be attached if the applicant cannot certify.
For more information, you should consult 40 CFR Part 32, Debarment and
Suspension under EPA Assistance Loan and Benefits Program.
5.18
-------
REQUIREMENTS OF DRUG-FREE
WORKPLACE ACT OF 1988
Federal Grants and Contracts Require Drug-Free Work
Place Certification.
Federal
Grant
or
Contract
REQUIRES
VIEWGRAPH* 16
TITLE: Requirements of Drug-Free Workplace Act of 1988
KEY POINTS:
The Drug-Free Workplace Act of 1988 requires contractors and grantees of
Federal agencies to certify prior to award that they will provide a drug-free
workplace. This certification is a condition of all Federal grants and
contracts, regardless of value.
To comply with this Act, potential grantees or contractors must:
Publish a statement notifying employees that drug abuse in the
workplace is prohibited
Establish a drug-free awareness program
Require employee notification of criminal drug statute convictions
occurring in the workplace and report them to EPA
Establish sanctions or other measures for employees convicted of
drug abuse violations in the workplace
Continue ongoing compliance with all requirements of the Act.
False certification, violations of the certification, or failure to make a good
faith effort to provide a drug-free workplace program may result in
suspension of payments, termination of the contract or grant for default, and
debarment and suspension of the contractor or grantee.
5.19
-------
CERTIFICATION REGARDING LOBBYING
LOSING
Certification
Regarding
Lobbying
VIEWGRAPH* 17
TITLE: Certification Regarding Lobbying
KEY POINTS:
Pursuant to 40 CFR Part 34, Appendix A, applicants for Federal assistance
must 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, in accordance with section 319 of Public Law
101-121.
Applicants must follow the requirements in the Interim Final Rule entitled,
"New Restrictions on Lobbying" published on February 26,1990.
5.20
-------
MODULE VI
AWARD PROCESS
-------
THE ASSISTANCE AGREEMENT:
AWARD PHASE
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Discuss the Responsibilities of the Grants Management
Office, the Program Office and the Servicing Finance Office
During the Award Process
• Understand the Difference Between the Program Approval
and the Award Decision
• Discuss the Preparation of the Funding Recommendation and
the Assistance Agreement
• Describe the Process for Notification of Award Actions
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 and the assistance agreement, notifying the
Congressional designee and the recipient, and executing the assistance
agreement.
The program and award decisions involve different EPA officials and
considerations and occur at different stages of the award phase. These
distinctions will be discussed in subsequent viewgraphs.
During the award phase, the program office and the grants management office
(GMO) must prepare various documents. These documents include the funding
recommendation and the assistance agreement, as well as other secondary
documents.
The process for notification of award actions includes notification of
Congressional members, and distribution to the various EPA offices and the
recipient.
6.1
-------
OVERVIEW OF THE AWARD PHASE
Program Office 1
Uwies I ^
Programmatic I
Approval I
The Servicing
Rnance Office
Approve* Finding
lauae
•^•ir»
—
Program Office
HVpW8 nl/UainQ
1
CMOPrepeiM
Aaalitance
Agreement/ Amendment
—
«w
A0nwnMit/Ani0fiofiwit
1
TheGMOnoofieetha
Congressional AHalra
Office
Applicant le Notified
VIEWGRAPH# 2
TITLE: Overview of the Award Phase
KEY POINTS:
The award phase of assistance administration consists of seven stages.
The program office(Approval Official) is responsible for the programmatic review
and approval of an assistance application.
Once the Approval Official issues programmatic approval, the program office
must obtain funding approval from the Financial Management Officer (FMO).
The FMO is responsible for committing, recording, and obligating funds using
EPA's Integrated Financial Management System (IFMS). As a result of the
Gramm-Rudman-Hollings legislation, stricter funds control procedures have
been adopted by EPA. These procedures now include a prevalidation of funds.
Prevalidation involves verifying commitments against data in IFMS. Grants
specialists must obtain this verification before forwarding the award document to
the Award Official.
After receiving the funding approval, the program office prepares and forwards
its recommendation to the GMO.
The GMO then drafts the assistance agreement and forwards it to the Award
Official to be executed.
Once the assistance agreement has been signed, the GMO informs the Office of
Congressional Liaison, which is responsible for notifying the appropriate House
and Senate members.
Once the 5 day period has passed, the GMO may notify the applicant.
6.2
-------
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 (by reference)
(2) EPA Assistance Agreement (EPA Form 5700-20/20A), including any Terms
and Conditions
(3) EPA regulations (by reference)
After receiving the award, the applicant or his/her designee has three calendar
weeks to sign and return the assistance agreement to the GMO. Failure to do
so may result in cancellation of the award offer.
6.3
-------
TIMELY AWARDS
• Cash Management Improvement Act of
1990
• Applies to States and State Universities
only
• Provides for Timely Transfer of Federal
Funds
• Timely Awards Memorandum
VIEWGRAPH # 4
TITLE: TIMELY AWARDS
KEY POINTS:
Cash Management Improvement Act:
The purpose of the Act is to ensure efficiency, effectiveness, and equity
in the exchange of funds between the Federal government and the
States.
Applies to States, D.C., and the trust territories.
Local governments and Indian tribes are specifically excluded.
With minor exceptions, States will be entitled to interest from the Federal
Government for the time State funds are advanced for program purposes
pending Federal reimbursement. The Federal Government will be
entitled to interest from States for the time Federal funds are in State
accounts pending presentation of checks/warrants and settlement of
Electronic Funds Transfer (ACH) payments for program purposes.
Treasury may charge responsible Federal agencies if they are found to
be egregious in not making funds available or are repeat offenders. To
the maximum extent practicable, interest charges will be paid out of EPA
operating budgets and nol from program funds.
The Act takes effect July 7,1993.
Timely Awards Memorandum: (See Appendix K)
Issued September 14,1992, to clarify general Agency policy on when
funds are available for award.
Funds for Continuing Environmental Program grants should be awarded
as soon as funds are available.
If there are concerns over part of the Workplan, funds to cover the
approved part of the Workplan should be awarded.
6.4
-------
INFORMATION REQUIRED PRIOR TO FUNDING
• Draft Policy Dated December 3,1992
• Congressional Add-ons
• New Programs
• Discretionary Funding
VIEWGRAPH #5
TITLE: Information Required Prior to Funding
KEY POINTS:
Currently, there is confusion regarding assistance awards resulting
from congressional add-ons, or programs that have no administrative
procedures in place, i.e., funds that are unexpectedly identified for
award 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 purpose of the policy (commonly referred to as the "Orphan Grant
policy) is to establish consistent, standard operating procedures for
Regional and Headquarters program offices and Grants Management
Offices fo follow in awarding these grants.
The policy:
- Focuses on new/unique assistance programs or individual project
grants and Cooperative Agreements not previously funded and for
which the GMOs have limited background information.
- Explains what information is needed before the GMO can process an
award, and what portions of that information is the responsibility of
the National Program Office to verify/provide prior to the distribution
of funds. (See Appendix J).
6.5
-------
PREPARATION OF THE
FUNDING RECOMMENDATION
FUNDING RECOMMENDATION
(1) Assistance Funding Order
(EPA Form 5700-14)
(2) Commitment Notice
(EPA Form 2550-9)
(3) Decision Documentation Including •—•
Decision Memorandum (II applicable) L/l
0
0
VIEWGRAPH # 6
TITLE: Preparation of the Funding Recommendation
KEY POINTS:
Generally, the Program Office prepares and forwards to the GMO the funding
recommendation, which consists of the following primary documents: (1) the
Funding Order (EPA Form 5700-14) optional for regional GMOs, (2) the
Commitment Notice (EPA Form 2550-9), and (3) the decision documentation.
The Funding Order identifies the proposed and approved funding amounts. Also
included in the Funding Order is the name of the assigned Project Officer. It is
signed by the Approval Official, who is also responsible for attaching special
payment or reimbursement requirements.
The Commitment Notice is used to reserve funds. (See Appendix H).
The decision documentation summarizes the program's review, recommends a
course of action, and includes any conditions from the program. (See Appendix
I).
6.6
-------
TERMS & CONDITIONS OF
THE ASSISTANCE AGREEMENT
• Terms and Conditions
Special Conditions
VIEWGRAPH *7
TITLE: Terms & Conditions of the Assistance Agreement
KEY POINTS:
In order to prepare the assistance agreement properly, it is important to
understand the difference between terms and conditions and special 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.
Regarding CAs, information assuring substantial project involvement by EPA must
be included either under the terms and conditions section of the assistance
agreement or, with EPA approval, solely within the application for the cooperative
agreement.
In some cases, recipients are determined to be "high risk" recipients and subject
to "special conditions."
A recipient may be considered high risk if it: (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 standards set forth in 40 CFR Part 31; or
(4) has not conformed to the terms and conditions of a previous award, or (5) is
otherwise considered "not responsible."
For high risk recipients, the following special conditions may be included in the
assistance agreement: (1) payment on a reimbursement basis; (2) withholding
authority to proceed to the next phase until receipt of evidence of acceptable
performance within a given funding period; (3) requiring the recipient to obtain
more detailed financial reports; (4) additional project monitoring; (5) requiring the
recipient to obtain technical or management assistance; or (6) establishing
additional prior approvals.
6.7
-------
AMENDMENTS TO
THE ASSISTANCE AGREEMENT
• Increases In Funding
• Decreases In Funding
• Transfer of Funds
VIEWGRAPH # 8
TITLE: Amendments to the Assistance Agreement
KEY POINTS:
Whenever the funding needs of a project change, the recipient must prepare and
submit a new budget and an amendment application to the assistance
agreement. Procedures for revising the project budget will depend on whether
funds are being increased, decreased, or transferred between budget periods.
For increases in funding, the recipient must: (1) inform the EPA Project Officer,
and (2) send the Project Officer a detailed justification or amendment application.
If the Project Officer rejects the application, he/she must notify the recipient and
forward a copy of the notification to the appropriate GMO. If the Project Officer
approves the application, he/she must send relevant documentation to the
Approval Official. This documentation includes: (1) a Recommendation
Memorandum, (2) a Commitment Notice, and (3) a Funding Order if used in your
Region. The Approval Official sends these documents along with the
amendment application to the GMO. The award process for funding increase
amendments is similar to that of new agreements. (Note: usage of the
Commitment Notice varies from one Region to another. Commitment and usage
of funds may be approved directly on the award document, which is signed by
the GMO and the Project Officer, and assigned a DCN by the FMO.
For decreases in funding, the recipient must: (1) inform the EPA Project Officer,
and (2) send him/her a summary discussing how project objectives will continue
to be met with fewer funds. Approval of funding decreases follows a course
similar to that of funding increases.
6.8
-------
VIEWGRAPH* 8(cont.)
TITLE: Amendments to the Assistance Agreement
KEY POINTS:
When unobligated balances exist, funds may be transferred to a
subsequent budget period of the same grant, either as an increase or as an
offset, if they meet the requirements of the carryover policy. If the funds
are not to be used on the same grant and are still available (i.e. not
expired) the Regional Comptroller must de-obligate the funds and request
that the HQ Comptroller return these funds to the Region for reobligation to
another grant (through a "Carryover Advice of Allowance"). Carryover of
expired funds is not allowed. (See Appendix L).
6.9
-------
MODULE VII
ADMINISTRATION
-------
ADMINISTRATION
OF ASSISTANCE AGREEMENTS
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
Describe the General Responsibilities of GMOs, POs, and FMOs
during Assistance Administration
Understand Cost Sharing/Matching under Assistance
Agreements, Recipient Payment Procedures, and the Criteria
used in the Judgement of Allowable Costs
Identify What Types of Administrative Changes Require Formal
Amendments and What Types Do Not
Know the Responsibilities and Procedures for Disputes
Resolution and Appeals
Know the Responsibilities and Procedures for Obtaining
Deviations
Identify the Procedures for Monitoring Recipient Performance
and for Dealing with Recipient Noncompliance
VIEWGRAPH# 1
TITLE: Administration of Assistance Agreements
KEY POINTS:
In addition to its responsibilities during the application and award
phases, the GMO has many responsibilities once assistance has been
awarded.
This module discusses the general responsibilities of EPA grants
management offices (GMOs), the Project Officer (PO), and Financial
Management Offices (FMOs) during project administration.
Generally, the GMO serves as a source of administrative oversight for
all EPA assistance agreements. However, the GMO also serves as the
liaison between the region's Project Officer and FMO, and the
recipient's project manager and administrative staff with regard to the
administrative aspects of assistance.
The Project Officer serves as EPA's technical manager and liaison with
the recipient's project manager on all matters relating to project
performance.
The Project Officer serves as a source of programmatic oversight
(on-site reviews; review/approval of progress reports; FSRs; payment
requests; provides technical assistance if needed, etc.)
7.1
-------
RECEIPT OF RECIPIENT REPORTS
Recipient Reports
GMO
Program Office
SFO
VIEWGRAPH* 2
TITLE: Receipt of Recipient Reports
KEY POINTS:
A recipient of EPA assistance must submit numerous reports to EPA
indicating the use of funding, the status of accomplishments, and
recipient compliance with administrative and program requirements. It
is the responsibility of the GMO to ensure that the necessary recipient
reports are received by the Project Officer, FMO, and the MBE/WBE
Coordinator and that the necessary follow-up actions are taken if
reports are overdue, incorrect, or deficient.
The Project Officer reviews technical recipient reports to determine their
adequacy and notifies the GMO whether they are or are not acceptable
and what further action(s) may be necessary. They should also review
recipient payment requests to determine if they should be paid.
The GMO also assists the program office with the review and analysis
of recipient reports for administrative compliance and consistency with
Agency objectives.
7.2
-------
COST SHARING
VIEWGRAPH # 3
TITLE: Cost Sharing
KEY POINTS:
A recipient of EPA assistance must share the cost of such assistance if cost
sharing is specified in the regulations applicable to a particular program. Most
cost sharing requirements for EPA's programs are based on Federal statutes.
Appendix 14-A of the Assistance Administration Manual contains a list of the
statutory/regulatory cost sharing requirements of current, funded EPA programs.
However, since cost sharing requirements for each program change from time to
time, GMO personnel should verify program requirements.
Recipients can claim only allowable costs to meet cost sharing requirements
(Viewgraph # 6 below discusses allowable costs).
When an EPA program is subject to minimum recipient cost sharing
requirements, the Award Official may negotiate a higher cost share with the
recipient whenever such negotiations are justifiable based upon the recipient's
ability to pay.
The Director, Grants Administration Division (Headquarters), may approve a
deviation from non-statutory minimum cost sharing requirements
Funds awarded under assistance programs of other Federal agencies cannot be
used to meet EPA cost sharing requirements unless EPA's or the other agency's
legislation explicitly authorizes such use.
Sources of funds for recipient cost sharing may include "in-kind" contributions
(e.g., facilities, equipment, materials, professional services) provided by
non-Federal public agencies, organizations, or individuals.
7.3
-------
METHODS OF PAYMENT
Advance Payment
(EPA-ACH or Treasury
Check)
Reimbursement Payment
(EPA-ACH or Treasury
Check)
AUTOMATED
CLEARING
HOUSE
VIEWGRAPH* 4
TITLE: Methods of Payment
KEY POINTS:
EPA assistance agreements provide for payment by either of two methods:
payment in advance of performance or reimbursement after performance.
The Award Official may authorize advance payment to recipients under most EPA
assistance programs when the recipient indicates the need for advance financing.
Advance payment is made either by Treasury Check or through the EPA
Automated Clearing House ("ACH", also known as "Vendor Express" - See
Appendix F for more information on ACH), which provides electronic deposit of
funds to the financial institution designated by the recipient.
Advance payment requested using the EPA-ACH Payment Request Form will be
made in an amount necessary to meet immediate cash requirements or as
stipulated in a predetermined payment schedule.
Reimbursement payment requested using SF-270 will be made by Treasury check
after the recipient submits a request for reimbursement of EPA's share of
expenditures incurred for EPA-assisted projects.
If a grantee cannot met the criteria for advance payments and the EPA determines
that reimbursement is not feasible because the grantee lacks sufficient working
capital, EPA may provide cash on a working capital advance basis. The advance
covers the first funding period, thereafter, funds are disbursed on a reimbursement
basis.
7.4
-------
PAYMENT PROCESS
GMO Determines Payment
Method and FMO Processes
Payment Request
EXAMPLE: REIMBURSEMENT
GMO and EPA Project
Officer Review Recipient
Payment Requests
GMO Coordinates Approval of
Reimbursement Payment
Request with FMO and Program
Office
GMO and FMO Ensure
Funds Reach Recipient on
Time
VIEWGRAPH* 5
TITLE: Payment Process
KEY POINTS:
The GMO, within statutory/regulatory constraints, determines which
payment method depending upon whether a particular method is
authorized for use in the assistance program, and whether the recipient
can provide necessary accounting support to obtain and protect the
funds, account for expenditures, and fulfill reporting requirements.
After approval of a particular payment method, the FMO is responsible
for processing payment requests, performing required accounting,
monitoring cash management practices of recipients, and complying
with reporting requirements of the U.S. Treasury.
GMOs and FMOs ensure that funds are made available to the recipient
in a timely manner and that the payments are proper. GMOs and
Project Officers review payment requests and Financial Status Reports-
(FSRs) and compare them with progress reports to ensure that each of
their projects progress satisfactorily and that the conditions of the grant
or cooperative agreement are met.
The GMO reviews payment requests for compliance with the
administrative requirements of the assistance agreement (e.g., match,
cost share, terms and conditions, timeliness). It is responsible for
coordinating approval/disapproval of payment requests (advance,
reimbursement) with the program office and the FMO. It is also
responsible for developing and providing the program office with reports
on the status of unobligated and unliquidated funds.
The PO should review the payment requests to ensure that progress on
the project is consistent with the amount of funds being requested.
7.5
-------
CRITERIA FOR APPROVING COSTS
CHECKUST FOR
APPROVING COSTS
Costs Are Allowable 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
VIEWGRAPHtf 6
TITLE: Criteria for Approving Costs
KEY POINTS:
In order for costs to be approved under an assistance agreement, EPA
must determine that the costs are allowable and reasonable. This
determination is based on an analysis of: the applicable cost principles,
the governing regulations, and the conditions specified in the assistance
agreement.
Each recipient must follow the Federal cost principles applicable to that
type of organization:
State, local, and Indian tribal governments are subject to OMB
Circular A-87
Private nonprofit organizations (other than institutions of higher
education, hospitals, and organizations excluded in OMB
Circular A-122) are subject to OMB Circular A-122
Educational institutions are subject to OMB Circular A-21
For-profit organizations (other than hospitals or organizations
excluded in OMB Circular A-122) are subject to 48 CFR Part 31.
Recipients must maintain and report costs in accordance with the
regulations that govern the assistance agreement, e.g., 40 CFR Part
31.
The recipients cannot incur costs that are contrary to the specific terms
of the agreement or are outside its authorized scope. Before incurring
such costs, the recipient must either obtain a deviation or amend the
agreement.
7.6
-------
VIEWGRAPH* 6(cont.)
TITLE: Criteria for Approving Costs
KEY POINTS:
Costs can only be approved if they are covered by the terms of the
assistance agreement. The recipient may only charge costs if they
have resulted from obligations made during the approved funding
period. If carryover of unobligated funds is permitted by the agreement,
obligations may be made in the subsequent funding period.
Recipients may not incur costs before the Award Official signs the
agreement. Once the Award Official signs the agreement, the recipient
may incur costs even if the recipient has not yet signed the agreement,
provided those costs are identified in the agreement and the recipient
does not change the agreement.
The Project Officer reviews the payment requests to assure that the
recipient uses the funds properly and in compliance with the workplan.
7.7
-------
BUDGET CHANGES
REQUIRING PRIOR EPA APPROVAL
Budget Changes:
Increase in Total Funding Amount
Cumulative Transfer among Direct Cost
Categories that Exceed 10% of Total
Approved Budget
Transfer of Funds Allotted for Training
Fund or Budget Transfer between
Non-Construction and Construction
VIEWGRAPH # 7
TITLE: Budget Changes Requiring Prior EPA Approval
KEY POINTS:
Recipients cannot make certain post-award changes in budgets or certain
programmatic changes without prior EPA approval and the execution of a formal
amendment to the assistance agreement. The request for such a change must be
made in the same budget format the recipient used in its application and must be
accompanied by a narrative justification for the proposed revision.
40 CFR Part 31.30 requires Award Official approval of a formal amendment before a
State, local, or Indian Tribal government makes the following budget changes:
Any revision which would result in the need for additional funding
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 the awarding agency's share exceeds $100,000
Transfer of funds allotted for training allowances, i.e., from direct payments to
trainees to other expense categories
Rebudgeting of funds from construction to non-construction activities, or vice
versa.
To request an increase in funding, the recipient must first notify the Project
Officer and provide detailed justification or, preferably, an amendment
application.
The Project Officer must notify the GMO in writing of the approval or rejection
of the recipient's amendment request/application.
Some changes require prior approval and may be made by letter rather than
execution of a formal amendment. For example, an equipment purchase beyond
that specified in the original agreement, requires the prior approval of EPA.
7.8
-------
VIEWGRAPH # 7 (cont.)
TITLE: Budget Changes Requiring Prior EPA Approval
KEY POINTS:
40 CFR Part 30.700 requires Award Official approval of a formal
amendment before a non-government recipient (hospital, institution of
higher education, or non-profit organization) makes the following budget
changes:
Transferring an award to another recipient
Rebudgeting funds for either construction or non-construction
activities if transferring from one activity to the other
Rebudgeting funds for indirect costs to absorb increases in direct
costs
Rebudgeting funds for training allowances if transferring to other cost
categories.
7.9
-------
PROGRAMMATIC CHANGES
REQUIRING A FORMAL AMENDMENT
Programmatic Changes:
Revision to the Project Scope or
Objectives
Extension of the Period of Availability of
Funds
Change in Key Personnel
Use of Third Parties (Non-construction
agreements)
VIEWGRAPH* 8
Programmatic Changes Requiring A Formal Amendment
KEY POINTS:
40 CFR Part 31 requires Award Official approval of a formal amendment before a
State, local, or Indian Tribal government makes the following programmatic
changes:
Revising the scope or objectives of the project (regardless of whether
there is an associated budget revision requiring prior approval )
Extending the period of availability of funds
Changing key personnel whenever such personnel are specified in an
application or an Assistance Agreement
40 CFR Part 30.700 requires Award Official approval of a formal amendment
before a non-government recipient (hospital, institution of higher education, or
non-profit organization) makes the following programmatic changes:
Transferring an award from one recipient to another
Changing the objectives of the project
Changing substantially the scope of the project.
7.10
-------
CHANGING THE OBJECTIVE
OR SCOPE OF THE PROJECT
Changes In:
• Budget or Project Period
• Site
• Key Personnel
VIEWGRAPH# 9
TITLE: Changing the Objective or Scope of the Project
KEY POINTS:
Recipients must receive the Award Official's approval of requests to change a
project's objectives or to make substantial changes in a project's scope before
implementing them. Such changes may include changes in budget or project
periods, changes in the project site, and changes in, or temporary absence of,
project managers or other key personnel if the change or absence will affect the
project's scope or objectives.
The Project Officer must prepare a written recommendation to the appropriate
GMO recommending whether EPA should approve requests for changes in
scope or objectives. The GMO must prepare an assistance amendment for
requests approved by the Award Official.
The Project Officer must notify recipients in writing of disapprovals of requests
for changes in scope or objectives. The letter must explain the reasons for the
disapproval. A Project Officer's failure to disapprove a request for a change in
scope or objectives of a project will not commit or obligate EPA to provide
additional assistance.
Requests for an extension of the budget or project period must be submitted to,
and approved by, the EPA before the current budget or project period expires;
otherwise, costs incurred beyond the approved budget or project period are
unallowable. Any extension beyond the regulatory duration periods requires a
formal deviation.
7.11
-------
INFORMAL CHANGES
Minor Adjustments to Methodology or Approach
Minor Adjustments to Project Budget
Staff Changes
VIEWGRAPH# 10
TITLE: Informal Changes
KEY POINTS:
Recipients may need to change their assistance projects to respond to various
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 assistance agreement. However, such changes should
be discussed between the Project Officer and the recipient prior to
implementation. For example, recipients may:
Make minor adjustments to the methodology, approach, or other aspects
of their project as needed in order to meet objectives or expedite
completion
Adjust their project budgets, except adjustments requiring formal
amendments, provided they use the funds in accordance with the
approved scope of work, EPA regulations, and applicable cost principles.
Alter the staff assigned to the project, provided the change will not
change the objectives of the project.
7.12
-------
TRANSFERRING AN AWARD
Transfer By Award of New Assistance Agreement
Transfer By Amendment
VIEWGRAPH* 11
TITLE: Transferring an Award
KEY POINTS:
Recipients may request EPA to transfer an assistance project to another
recipient for a number of reasons, e.g., transfer of the Project Manager to
another recipient organization; reorganization; changes in the recipient
organization's name. There are two types of transfers: award of a new
assistance agreement and transfer by amendment. Procedures to follow for
each type of transfer may be found in Chapter 34 of the Assistance
Administration Manual.
• Closeout of the original project and an award of a new assistance agreement is
justified when a project is transferred to a new recipient because the Project
Manager moves to a new recipient organization.
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 original recipient's award to the new recipient or change the
recipient's name by issuing an assistance amendment.
7.13
-------
DISPUTES
Responsibility for Disputes Resolution
EPA Actions not Subject to Review
VIEWGRAPH* 12
TITLE: Disputes
KEY POINTS:
Each Award Official (Regional and Headquarters) designates a Disputes
Decision Official(s) (a senior EPA employee). The Disputes Decision Official
reviews disputes between applicants/recipients and EPA and issues a decision.
Whenever possible, disagreements between EPA and applicants/recipients
should be resolved by the EPA Project Officer and the GMO within the branch,
division, regional or Headquarters organization closest to the problem and with
the authority to resolve the matter.
Most disputes are a result of recipient disagreement with an audit finding(s). It
is the DDO's role to coordinate the resolution of disputes between the recipient,
the program office, and the Office of Regional Counsel.
The following EPA actions cannot be disputed:
Denials of requests for a deviation under 40 CFR Part 30, Subpart J
(which outlines the procedures for requesting a program deviation)
Bid protest decisions under 40 CFR Part 33 and Part 31
National Environmental Policy Act decisions under 40 CFR Part 6
Advanced wastewater treatment decisions of the Administrator
Audit Resolution Board decisions
Debarments/suspensions by the Director, Office of Grants and
Debarment
7.14
-------
VIEWGRAPH* 12(cont.)
TITLE: Disputes
KEY POINTS:
If an applicant or recipient disagrees with a decision made by a Disputes Decision
Official, the disputant may file a request for a review of the decision. A request for
the review of a decision made by a Regional Disputes Decision Official must be
addressed to the Regional Administrator. The decision made by the Regional
Administrator is usually final, although a discretionary review of the decision by the
Assistant Administrator of the program office at Headquarters may be requested,
and may result in a change of official position. A request for the review of a
decision made by a Headquarters Disputes Decision Official must be addressed to
the Assistant Administrator of the program office at Headquarters.
See 40 CFR Part 30, Subpart L or Chapter 35 of the Assistance Administration
Manual for further information on disputes resolution.
7.15
-------
FORMAL 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* 13
TITLE: Formal Deviations
KEY POINTS:
Recipients must adhere to EPA's assistance regulations. In some cases, however, it
may be necessary to allow deviations from the regulations. The Director, GAD, is
authorized to approve deviations from the non-statutory requirements of the
regulations, except for those that implement Executive Order requirements.
Deviation requests for assistance awards administered in Regional Offices must be
submitted in writing to the Region or delegated State agency, as appropriate. The
Region, through the Program Office and GMO, or the delegated State agency then
submits the request to the Director of GAD. Deviation requests should be submitted
as soon as the need for the deviation is known.
Each request for a deviation must contain as a minimum:
The name of the applicant or recipient, the assistance identification number of
the application (if available) or assistance award, the date the assistance
agreement was awarded, and the dollar value of the application or award and
the amount in question;
The section(s) of the regulation from which a deviation is needed;
A complete description of the circumstances, and justification for, the
deviation: an explanation of what it 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 as a minimum 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.
7.16
-------
DEVIATION APPROVAL OR DISAPPROVAL
VIEWGRAPH* 14
TITLE: Deviation Approval or Disapproval
KEY POINTS:
Deviations are approved or disapproved by the Director, GAD, with the
concurrence of the Office of General Counsel and the appropriate program
office.
Concurrence in the approval of the deviation by the appropriate Assistant
Administrator(s) is required by OMB where a deviation will affect a group of
applicants or recipients (i.e., class deviation).
When deviations are approved before assistance is awarded, approval is
contingent upon the approval of the application.
A copy of each written deviation approval or disapproval must be retained in the
official EPA assistance file. The provisions of any approved deviation must be
incorporated into the assistance agreement.
The Director, GAD, may reconsider decisions in cases where it is believed the
decision was based on incomplete information.
7.17
-------
MONITORING RECIPIENT PERFORMANCE
On-Site:
- Performance Review
• Technical Assistance
In-House:
- Reports
• Payment vs. Progress
- Audit Follow-up
VIEWGRAPH* 15
TITLE: Monitoring Recipient Performance
KEY POINTS:
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 if they are carried out in accordance with applicable
Federal audit standards.
Besides audits, EPA performs a variety of other recipient monitoring activities,
both on-site and "in-house" (at Headquarters or a Regional Office).
On-site reviews include the following:
Mid-year and end-of-year reviews to evaluate recipient performance
The Region should also provide technical assistance to the recipient. This
assistance is used to ensure the highest quality recipient management
practices, and to avoid future potential audit findings and difficulties by
ensuring recipient compliance with EPA regulations. These reviews may
also be used to assist the recipient in implementing changes to systems
and processes in response to changing requirements, and to follow up on
these changes; to discuss any processes with which it is having difficulty;
and to clarify the specific regulations that govern the recipient's
cooperative agreements.
7.18
-------
VIEWGRAPH* 15(cont.)
TITLE: Monitoring Recipient Performance
KEY POINTS:
"In-House" monitoring activities, those that EPA conducts from
Headquarters or a regional office, include the receipt and review of
financial status reports, progress reports, and payment requests, as
well as audit follow-up.
- The SF 269, "Financial Status Report" (FSR), must be reviewed to
ensure that the recipient uses EPA funds properly. This review is
usually done by the GMO, and a copy is forwarded to the Project
Officer.
- Quarterly progress reports must be reviewed by the program office to
ensure that work performance proceeds according to schedule.
- Financial Status Reports are compared to progress reports to alert
the Agency in advance to problems the recipient may have in meeting
schedules for completing certain work elements, whether the overall
approach should be modified, and whether a deviation is needed.
- Payment requests must also be compared to progress reports to
ensure that such requests are justifiable against work actually
accomplished.
- 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.
The Project Officer should oversee the project progress including
compliance with all technical terms and conditions.
The PO and GMO must work together to ensure that the recipient
complies with all terms and conditions in the agreement.
7.19
-------
EPA RESPONSE
TO RECIPIENT PERFORMANCE
Noncompllance and High Risk
Recipients
Performance-based Assistance
Policy
VIEWGRAPH* 16
TITLE: EPA Response to Recipient Performance
KEY POINTS:
EPA assistance administration and program officials are faced with a wide range
- of potential problems involving program participants. 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 Age'ncy'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.
In 1985, EPA instituted a performance-based assistance policy to ensure a
consistent effort within the Agency to assess recipient performance against
negotiated commitments, to reward accomplishments, and to correct problems
(See Appendix D for a copy of EPA's Policy on Performance-based Assistance).
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, assistance administration personnel, and the Office
of General or 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.
7.20
-------
MODULE VIM
FINANCIAL MANAGEMENT
-------
FINANCIAL MANAGEMENT
REQUIREMENTS FOR RECIPIENTS
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
Identify the Financial Reporting Requirements for
Assistance Recipients
Identify the Recordkeeplng Requirements for Assistance
Recipients
VIEWGRAPH # 1
TITLE: Financial Management Requirements for Recipients
KEY POINTS:
The recipient of an EPA assistance agreement must follow certain
management and administration requirements found in Agency regulations
and guidance. One of the most critical responsibilities of the recipient is to
adequately manage funds awarded under the agreement.
The module discusses general financial reporting requirements and identifies
the specific reports required to track the status of funds and to request
payment for work performed under the agreement.
Finally, the module identifies the financial recordkeeping requirements for
recipients and their contractors.
8.1
-------
REPORTING UNDER ASSISTANCE AGREEMENTS
• Provide Financial Status and Progress
• Document Administrative and Programmatic Activities
VIEWGRAPH # 2
TITLE: Reporting Under Assistance Agreements
KEY POINTS:
Reports are necessary to provide information to EPA regarding project
expenditures and activities.
The recipient is required to submit administrative reports. These reports include
financial status, property, minority and women's business utilization, relocations
and acquisitions, and patents and inventions.
The recipient also is required to submit programmatic reports such as interim
progress reports, reports of significant changes, and final reports.
The GMO is responsible for ensuring that recipients submit the required
reports.
The Project Officer conducts a programmatic review of the reports based
on the programmatic or technical progress of the project(s).
Subsequent viewgraphs will focus on the recipient requirements for reporting on
financial status.
8.2
-------
SUMMARY OF REQUIRED FINANCIAL REPORTS
Form Name
Financial Status Report
Federal Cash Transacton
Report
Request lor Advance or
Reimbursement
Outlay Report and Request
tor Construction Programs
Form Number
SF 269 or 269 A
SF272
SF270
SF271
Due
Quarterly. Senunnualy. or Annually
• 90 Days After the End ol the Final Budget
Period
• Generally Required Serraannually. Within IS
Days from the End ol the Semannual Period
Required MontMy/Ouanerty/Annualy lor
Recpients Requesting Reimbursement Under
Non-constnicton Grants
Quarterly. Semannually. or Annually
• 90 Days Alter the End ol the Fnal Budget
Period
Only Required Under Selected Circumstances
VIEWGRAPH # 3
TITLE: Summary of Required Financial Reports
KEY POINTS:
This viewgraph provides a summary of the financial reports required from
assistance recipients.
The reports mentioned here are explained further in the following viewgraphs.
8.3
-------
FINANCIAL STATUS REPORT
SF 269A
(Short Form)
SF269
(Long Form)
Frequency of Reporting:
- Annually, 90 Days after Fiscal or
Project Year, Unless Specified by
EPA
- 30 Days after the End of the
Period If Quarterly or Semiannual
Reporting is Specified
- At the End of Agreement, 90 Days
after End of Budget Period
The PO reviews to ensure request is
appropriate
VIEWGRAPH # 4
TITLE: Financial Status Report
KEY POINTS:
The Financial Status Report (FSR) is used by the recipient to report the status of
funds. There is a short form (most commonly used) and a long form (for use
when there is program income). Recipients of fellowship assistance agreements
do not need to submit FSRs.
The recipient should submit the FSR to the GMO, who will provide a copy to the
program for their review.
EPA cannot require its recipients to submit an FSR more frequently than
quarterly; however, EPA may specify the frequency within that limitation. If EPA
does not specify the frequency, the recipient will be required to submit the report
annually. Further, the recipient must submit a final report upon termination or
completion of the project period.
The PO reviews the FSR and compares the funding levels with progress on the
project. If there is a significant difference (e.g., funds are being requested at a
higher rate than progress would indicate should be, or vice versa), determines if
there is a problem which needs to be addressed.
8.4
-------
FEDERAL CASH TRANSACTIONS REPORT
SF272
Purpose Is to Monitor Status of
Advances and Disbursements
Generally Required Semlannually
within 15 Days from the End of the
Semiannual Period
VIEWGRAPH # 5
TITLE: Federal Cash Transactions Report
KEY POINTS:
The Federal Cash Transactions Report (FCTR) is used to monitor funds
advanced through the ACH Payment System. In addition, the FCTR provides
information on cash disbursements for each assistance agreement. ACH
replaces the use of Letters of Credit and Treasury check advances.
Recipients advanced funds through the ACH Payment System must submit
the FCTR semiannually within 15 working days following the end of the
semiannual period. The semiannual periods end June 30 and December 31 of
each year. If the amount of the advance is $1 million or more annually, EPA
can require the recipient to submit its FCTR within 15 working days from the
end of each month.
For recipients subject to 40 CFR Part 30, EPA may waive this reporting
requirement when monthly advances do not exceed $10,000 per recipient.
The PO will probably not see the FCTR, but if the program wants to put
restrictions on the recipient's drawdowns, e.g., can only draw down a certain
percentage until certain products are delivered, these restrictions must be a
condition in the agreement. However, if the PO places a restriction in the
agreement, they must monitor the condition and let the GMO/FMO know when
the condition has been met and can be lifted.
8.5
-------
REQUEST FOR ADVANCE OR REIMBURSEMENT
SF270
Only Required for Recipients
Requesting Reimbursement
Under Non-construction Grants
VIEWGRAPH # 6
TITLE: Request for Advance or Reimbursement
KEY POINTS:
Since the ACH Payment System has eliminated the use of Letter of Credit the
Request for Advance or Reimbursement is used to obtain a reimbursement
for non-construction grants other than fellowships. This form cannot be used
when advances are made to recipients automatically.
Under 40 CFR §30.400(b)(2), recipients receiving assistance through the
reimbursement method must submit a Request for Advance or
Reimbursement form at least quarterly once the recipient has received the
original advance.
The PO reviews the request and determines if the request is consistent with
progress on the project. If it is not, the PO must determine the reasons and,
with the GMO, determine if there is a need for further action.
8.6
-------
RECORDKEEPING REQUIREMENTS
NON-CONSTRUCTION ASSISTANCE AGREEMENTS
• Maintain Complete Project Record*
Length of Retention: 3 Years, Unless
Cooperative Agreement Specifies Otherwii
or Audit is in Progress
VIEWGRAPH # 7
TITLE: Recordkeeping Requirements
KEY POINTS:
Recipients must maintain complete project records which consist of such things
as financial and programmatic records, supporting documentation, procurement
and property records, and indirect cost rate proposals and allocations.
These records can consist of the original documents or be substituted with
microform copies.
Under 40 CFR Part 30, recipient records other than real property and
nonexpendable personal property records must be maintained for three years
from the receipt of the final FSR. For research, demonstration, and training
programs, the retention period starting date is the receipt date of the final
Financial Status Report.
Under 40 CFR Part 31, recipient records must be maintained for three years
from the date the recipient submits its final expenditure report. Exceptions to
this retention period starting date exist for property records; records for income
transactions after support; and indirect cost records, including indirect cost rate
proposals and cost applications. (These exceptions are detailed in 40 CFR
§31.42.)
The recipient must make all records available to EPA or GAO for purposes of
audits, examinations, excerpts, and transcripts.
Recipients may have to make records available to the public if a request is
made under the Freedom of Information Act.
With regard to contractor records, the recipient must require contractors to
maintain records which are directly pertinent to the contract and make them
available to the recipient, EPA, and GAO. Like the recipients, the contractors
must maintain their records for three years.
8.7
-------
MODULE IX
PROCUREMENT
-------
PROCUREMENT REGULATIONS
RECIPIENT
State
Local
Indian
Unlv/Non-ProfH
SUPERFUND
State
Local
Indian
Unlv/Non-Proftt
40CFR
Part 31
X
X
X
40CFR
Pan 33
X
X
40 CFR Part 35,
Subpart O
X
X
X
VIEWGRAPH # 1
TITLE: Procurement Regulations
KEY POINTS:
40 CFR Part 31, "Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments," governs procurement
under non-Superfund assistance agreements to State, local, and Indian Tribal
governments. This regulation superceded 40 CFR Part 33 (for the applicable
recipients) as of October 1,1988.
40 CFR Part 33, "Procurement Under Assistance Agreements," governs
procurement activity for institutions of higher education and other non-profit
organizations (including Superfund TAG recipients).
The primary differences between these regulations, with regard to procurement,
are:
The definition of small purchase:
40 CFR Part 33 defines a small purchase as a procurement
transaction costing not more than $10,000
40 CFR Part 31 defines a small purchase as a procurement
transaction costing not more than $25,000
The requirements for cost and price analyses:
40 CFR Part 33 requires a cost or price analysis for actions
estimated to exceed $10,000
40 CFR 31.36(f) requires a cost or price analysis for all
procurements
9.1
-------
PROCUREMENT REQUIREMENTS
States: Follow State Procurement
Procedures
• Other Recipients: Follow Federal
Regulations
VIEWGRAPH # 2
TITLE: Procurement Requirements
KEY POINTS:
State recipients will use their own policies and procedures for procurement
actions under these agreements. However, the State must ensure that every
purchase order and contract includes all applicable Federal clauses and laws.
Other recipients may use their own procurement policies and practices if they at
least meet the requirements of the applicable Federal, State, and local laws and
regulations.
Regardless of the type of assistance agreement or the type of recipient, EPA is
not a party to any procurement activity or contract under an assistance
agreement.
9.2
-------
GMO/PO RESPONSIBILITIES
GMO:
- PROCUREMENT SYSTEMS
- INDIVIDUAL CONTRACT DOCUMENTS
PO:
- ENSURES PROCUREMENT IS NECESSARY
- DETERMINES ELIGIBILITY OF COSTS
VIEWGRAPH #3
TITLE: GMO/PO Responsibilities
KEY POINTS:
GMO Responsibilities:
The GMO is responsible for ensuring that the recipient follows the correct
procurement requirements, and may conduct a review of the recipient's procurement
system or a particular procurement action.
The GMO should also review the submission from the Program Office to ensure that
the PO has reviewed the need for a particular procurement and that the PO supports
the proposed procurement.
PO Responsibilities:
The PO should review the Workplan and budget to ensure that if procurement is
proposed, that it is necessary and supported.
The PO may also be able to assist the GMO when the GMO conducts a review of the
recipient's procurement system or procurement action.
Contact GMO if you have specific questions.
9.3
-------
MODULE X
PROPERTY MANAGEMENT
-------
PROPERTY MANAGEMENT
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Define Property According to Its Various Classifications
• Describe the Requirements Governing the Acquisition,
Management, and Disposition of Equipment and Supplies
• Describe the Requirements Governing the Acquisition, Use,
and Disposition of Real Property
• Describe the Requirements Governing Relocation Assistance
Provided under Certain Assistance Programs
• Describe the Requirements Governing Ownership, Use, and
Disposition of Intangible Property Created or Developed with
EPA Assistance
VIEWGRAPH # 1
TITLE: Property Management
KEY POINTS:
This module begins by defining the three classifications of property that can
be acquired under an assistance agreement: personal property, real
property, and intangible property.
The module covers the requirements for acquiring, managing, and disposing
of each type of property under EPA assistance programs The discussion also
addresses these requirements as they vary in their application to different
types of recipients, e.g., States versus non-profit organizations.
In conjunction with the acquisition of real property, this module will cover the
requirements for the provision of relocation assistance.
The regulations pertinent to this discussion are: 40 CFR Part 30 for
institutions of higher education and other non-profit organizations; 40 CFR
Part 31, for assistance agreements to States, local governments, and Indian
Tribes; 40 CFR Part 35, Subpart I, for Waste Water Treatment Construction
grants; and 49 CFR Part 24 for regulations and procedures for complying with
the Uniform Relocation Assistance and Real Property Acquisition Policies Act
of 1970.
Additionally, EPA's Personal Property Management Policy establishes
policies for the management and control of its personal property.
10.1
-------
CLASSIFICATION OF
PROPERTY
Personal Property Real Property Intangible Property
VIEWGRAPH # 2
TITLE: Classification of Property
KEY POINTS:
There are two types of personal property: equipment and supplies.
For all EPA assistance programs awarded to States, local
governments, and Indian Tribes, equipment is defined as tangible,
non-expendable personal property having a useful life of more than
one year and an acquisition cost of $5,000 or more per unit.
For all assistance agreements awarded to States, local governments,
universities, non profits, and Indian Tribes prior to October 1,1988 (the
effective date of 40 CFR Part 31), and Superfund assistance
agreements awarded on or prior to January 27,1989 (the effective
date of 40 CFR Part 35, Subpart O, interim final rule), equipment is
defined as items with a useful life of at least two years and an
acquisition cost of $1,000 or more per unit.
Supplies under all EPA assistance programs 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.
10.2
-------
ACQUISITION OF PERSONAL PROPERTY
Purchase must be Authorized in the Assistance Agreement
Acquisition must Occur During the Budget/Project Period
VIEWGRAPH#3
TITLE: Acquisition of Personal Property
KEY POINTS:
In order to purchase personal property under an assistance agreement, it must
first be authorized in the agreement.
Recipients may purchase property only during the budget or 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 to transfer
title to another entity within 120 days of the end of the project.
When Federally owned property is provided to the recipient, the title remains
with the Federal government.
The title to supplies vests with the recipient.
The PO must review the workplan and budget and make an affirmative decision
that the type and quantity of property proposed for purchase is appropriate.
10.3
-------
USE OF EQUIPMENT
NON-SUPERFUND ASSISTANCE AGREEMENTS
• Use Equipment for Program or Project as Long as Needed
• Make Equipment Available for other Federally Supported
Programs or Projects
SUPERFUND ASSISTANCE AGREEMENTS
• Document Use by Site, Activity, and Operable Unit (As
Applicable)
VIEWGRAPH # 4
TITLE: Use of Equipment
KEY POINTS:
States will use equipment according to State laws and procedures. Other
recipients must comply with EPA regulations.
Equipment must be used on the project for which it was purchased,
even after the project is no longer supported by Federal funds.
Recipients can also use equipment on other Federally supported
projects; however, this use cannot interfere with the work on the project
for which the equipment was purchased and preference must be given
to projects funded by the awarding agency. If applicable, user fees can
be charged to other projects.
10.4
-------
DISPOSITION OF EQUIPMENT
RECIPIENT
Slat**
Local and Indian
Tribal Government*
Inatltutlona of Higher
Education or Other
Non-ProlH Organization*
CATEGORIES
Determined by State Law
Equipment ha* a Fair Market Value
of Lee* Than $5,000
Equipment ha* a Fair Market Value
ol Over *S.OOO
Non-Expendable Peraonal Property
Purchased lor Greater Than f 1,000
Per Unit
Expendable Peraonal Property
which haa a Fair Market Value ol
$1,000 or more In Aggregate
OBLIGATION TO
EPA
None
MM*^*>
no no
Reimburse EPA
Reimburse EPA
Reimburse EPA
VIEWGRAPH # 5
TITLE: Disposition of Equipment
KEY POINTS:
States will dispose of equipment according to State laws and procedures.
Other recipients must comply with EPA regulations.
When equipment obtained under an assistance agreement is no longer needed
for that project, the recipient may use it on another project that is or has been
supported by a Federal agency. If the recipient does not need the equipment,
it must then follow the applicable procedures to dispose of the equipment.
Under 40 CFR Part 31.32, local and Indian Tribal governments, when disposing
of equipment, must determine the current per unit fair market value of the
equipment.
If the value is less than $5,000, then the recipient has no obligation to
reimburse EPA. It may retain the equipment, sell it, or otherwise dispose
of it.
If the value is greater than $5,000, the recipient may retain the
equipment for its own use or sell the equipment. However, the recipient
must reimburse EPA for its proportionate share of the current market
value or the sale price.
10.5
-------
VIEWGRAPH # 5(cont.)
TITLE: Disposition of Equipment
KEY POINTS:
Under 40 CFR §30.532, university and non-profit recipients must assess the
value of property to be disposed of and reimburse EPA as follows:
If the property was purchased for more than $1,000 per unit and is
nonexpendable, the recipient must reimburse EPA for its proportionate
share of the current fair market value.
If the purchase price of the nonexpendable property is less than $1,000,
the recipient may either keep the property or sell it and keep the
proceeds. Exception: profit-making organizations must reimburse EPA
for its proportionate share of the current fair market value.
If the equipment is expendable, the fair market value is used to
determine the obligation to EPA. For expendable equipment with a fair
market value of $1,000 or more in aggregate, the recipient must
reimburse EPA for its proportionate share.
Any recipient may claim the cost of disposal against EPA's proportionate share
that would otherwise be reimbursed.
If the equipment is Federally owned, the recipient must request disposition
instructions from EPA.
10.6
-------
DISPOSITION OF SUPPLIES
SUPPLIES NOT NEEDED ON
ANOTHER FEDERAL PROJECT OR AT
THE END OF THE PROJECT PERIOD
Determine Value
c
15.000 or Less
Over (5,000
1
i
No Obligation
1
r
Reimburse EPA
VIEWGRAPH # 6
TITLE: Disposition of Supplies
KEY POINTS:
Disposition of supplies needs to occur when the assistance agreement
terminates, or when the project ends and the supplies are not needed on any
other Federally supported project.
Similar to the Part 31 regulation governing the disposition of equipment, $5,000
is the threshold that determines what procedures must be followed for the
disposition of supplies. The value of supplies is assessed as the aggregate fair
market value of the residual inventory of unused supplies.
If the value is under $5,000, the recipient may keep them and does not
have to compensate EPA.
If the value is over $5,000, upon final disposition, the recipient must
compensate EPA for its interest in the supplies.
10.7
-------
REAL PROPERTY ACQUISITION
Gain Approval In Assistance Agreement
Acquire Under Two Types of Agreements:
- Waste Water Treatment Construction Grants
- Superfund Assistance Agreements
Title Vests with Recipient
VIEWGRAPH # 7
TITLE: Real Property Acquisition
KEY POINTS:
• The acquisition of real property must be approved in the assistance agreement
or an amendment to the agreement.
The acquisition of real property is also subject to the provisions of 49 CFR Part
24, "Uniform Relocation Assistance and Real Property Acquisition for Federal
and Federally Assisted Programs." (Prior to March 2,1989, this regulation
governing compliance with the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 was found in 40 CFR Part 4.)
Under all assistance agreements, the title to real property must be vested in the
recipient or sub-grantee upon acquisition.
For Superfund assistance agreements, CERCLA, Section 104 (j) requires a
State or Indian Tribe, (to the extent of its legal authority), to provide the
assurance that it will acquire and hold the real property interest before receiving
a Remedial Action cooperative agreements.
- If necessary, the Federal government may acquire the interest in the real
property and require the State or Indian Tribe, (to the extent of its legal
authority), to agree to accept transfer of the acquired interest before
completion of the response action.
- The regulation requires the Indian Tribe to acquire or assume title to the
real property only "to the extent of its legal authority." This exception
intended primarily to accommodate an Indian Tribe that does not have the
legal authority to acquire real property.
10.8
-------
REAL PROPERTY USE AND DISPOSITION
UM for Authorized Purpose
Disposal Options
- Retain
- Sell Property
• Transfer Title
VIEWGRAPH # 8
TITLE: Real Property Use and Disposition
KEY POINTS:
Real property is to be used only for the purpose authorized in the assistance
agreement, and should be retained only as long as it is needed.
When the real property is no longer needed for the original purpose, the
recipient must request disposition instructions from EPA. There are three
alternative methods available to the recipient for disposing of real property:
Retain and compensate EPA for its share. Under 40 CFR Part 31, EPA
will be compensated according to its percentage of interest in the original
purchase applied to the current fair market value of the real property.
Sell the real property and compensate EPA for its share. EPA will be
compensated according to its percentage of interest in the original
purchase applied to the proceeds of the sale, minus reasonable selling
expenses.
Transfer title to EPA or a third-party approved by EPA. The recipient will
be compensated according to its percentage of interest in the original
purchase applied to the current fair market value of the property.
• If property is sold or transferred from a State or local government to a private
party, Executive Order 12803 on Infrastructure Privitization establishes a
different set of guidelines for distributing the compensation received. State and
local governments are compensated first and the Federal Government second.
The compensation is not necessarily the fair market value of the property, and
is distributed according to a schedule designated in the E.O.. If the property is
sold or transferred to other than a private party, EPA is compensated for its
share as stated in the previous paragraph.
10.9
-------
RELOCATION ASSISTANCE
Provided as Part of Real Property Acquisition
Provisions Identified under 49 CFR Part 24
VIEWGRAPH # 9
TITLE: Relocation Assistance
KEY POINTS:
The acquisition of real property and/or the implementation of a response action
at a site can necessitate the relocation of residents. In these instances, there
are regulations governing the requirements and procedures for conducting
relocation activities.
49 CFR Part 24 covers:
General relocation requirements, including relocation notices;
comparable replacement dwellings; relocation planning, advisory
services, and coordination; eviction for cause; claims for relocation
payments; and treatment of relocation payments
Payments for moving and related expenses, including payment for actual
reasonable expenses, fixed payment, and re-establishment expenses for
residential and non-residential moves
Replacement housing payments for varying periods of time
Payment of expenses for mobile homes.
10.10
-------
INTANGIBLE PROPERTY
EPA Retains Rights to:
- Copyrighted Materials
- Products Developed or Purchased under Assistance
Agreements
VIEWGRAPH#10
TITLE: Intangible Property
KEY POINTS:
EPA reserves a royalty-free, nonexclusive, and irrevocable license to
reproduce, publish, or otherwise use intangible property, i.e., copyrights and
patents:
Developed under an assistance agreement
Purchased with assistance agreement support.
40 CFR Parts 30, and 31 require that all contracts let by the recipient must
include notice of EPA's requirements with regard to the development or
acquisition of intangible property.
10.11
-------
MODULE XI
CLOSEOUT
-------
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.
This module also describes the specific roles and responsibilities of EPA staff
and recipients during Closeout.
11.1
-------
PURPOSE OF CLOSEOUT
Proper Closeout Ensures the Completion of All:
Technical Work
Administrative Work
VIEWGRAPH # 2
TITLE: purpose of cioseout
KEY POINTS:
The cioseout 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.
Cioseout is performed when a project ends due to completion or termination. A
project may be terminated because of insufficient funds, complications with the
response action, or, in the case of a Superfund project, a change in the lead (i.e.,
from State to Federal).
Cioseout ensures a final accounting of expenditures and a determination from
the Project Officer that all technical work has been completed and is satisfactory.
Cioseout also ensures that any remaining unliquidated obligation balances are
promptly deobligated for possible use on funding other projects.
11.2
-------
SOURCES OF REQUIREMENTS
40 CFR Part 31, Subpart D
40 CFR Part 30, Subpart H
40 CFR Part 35, Subpart O
EPA Assistance Administration Manual Chapter 40
VIEWGRAPH # 3
TITLE: Sources of Requirements
KEY POINTS:
40 CFR Part 31 provides closeout requirements for grants to States, Indian
Tribes, and local governments. Specifically, it states that EPA staff must notify
the recipient before the end of the last budget period and provide forms the
recipient must file during the closeout process. It also describes other activities
which must precede a closeout: (1) receipt of required reports, (2) disposition or
recovery of Federally owned assets, and (3) adjustment of the award amount
and the amount of Federal cash paid the recipient.
40 CFR Part 30 provides closeout requirements for universities, hospitals, and
other non-profit organizations.
Chapter 40 of the EPA Assistance Administration Manual (AAM) also provides
policies and procedures for closeout.
11.3
-------
TIMING OF CLOSEOUT
TYPE OF AGREEMENT
Project Grants
Continuing Environmental
Programs
All
TIMING OF CLOSEOUT
When Project Ends
When Latest Continuation Agreement
Ends
When 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
(e.g., that the facility is working as designed), all eligible costs have been
accepted, all repayments have been received, all grant conditions have been met,
and all issues resulting from audits have been resolved. The timing of closeout
depends primarily on the type of agreement or contract. The viewgraph illustrates
when closeout of various types of agreements should take place.
Closeout of most grants begins when the project has been completed
satisfactorily.
Closeout of Continuing Environmental Program grants begins on the date the
latest Continuation Agreement expires.
11.4
-------
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
CEY POINTS:
Periodically, the grants management office (GMO) obtains and reviews the
"Status Report of Projects Completed But Not Closed Out" through the Grants
Information Control System (GICS).
For projects scheduled to end in 90 days, the GMOs should prepare and send a
"Reminder Letter" to remind the recipient and Project Officer of the upcoming
closeout, and update GICS when the status changes.
The PO must inform the GMO if the project should be closed out or extended.
11.5
-------
DELIVERY OF PRODUCTS AND REPORTS
THE PROJECT OFRCER MUST ENSURE:
Satisfactory Final Product
Output Commitments
VIEWGRAPH # 6
TITLE: Delivery of Products and Reports
KEY POINTS:
In accordance with the assistance agreement, the recipient must deliver a
satisfactory final product(s), including all deliverables.
The PO must ensure the GMO that within 90 days of project completion that:
- All work has been satisfactorily completed. For continuing Environmental
Program grants, specific work elements may be carried forward and funded in
the next year provided the recipient submits an application with an acceptable
workplan.
- All technical (programmatic) award conditions have been met.
The PO must also notify the GMO:
- How to handle any personal property purchased under the agreement
- How to handle any unliquidated funds
11.6
-------
EVALUATION OF FINAL REPORTS
Final Progress Report
Federally Owned Property Report /
Disposition of Property
Final Financial Status Report
Invention Report
Other Required Reports
VIEWGRAPH # 7
TITLE: Evaluation of Final Reports
KEY POINTS:
The final stage in the closeout process involves EPA's review of the final reports.
If inaccuracies or problems are identified during this stage, the Project
Officer/GMO must work with the recipient to resolve these problems.
If the final report will be published, it must be reviewed through the EPA
publication review process and the Project Officer and the Award Official are
responsible for ensuring this process is used. For all Final Progress Reports
accepted for publication, the Project Officer submits a Technical Data Report
(EPA Form 2220-1) to the appropriate grants specialist and submits a Technical
Data Report and two copies of the Final Progress Report to the Headquarters
library.
Before closeout can be completed, the recipient must ensure the proper disposal
of all Federally owned property. Once the GMO receives the recipient's list of
Federally owned property, it must notify the recipient of property disposition
requirements, if applicable.
• Final Financial Status Reports must reflect the proper reconciliation of all
accounting data including all necessary cash and cost adjustments. Such
adjustments may include settlement of obligated yet unexpended funds,
payments owed EPA, and requests for reimbursements. The grants specialist is
responsible for reviewing the final Financial Status Report and providing copies
to the Project Officer and FMO for their review.
Other required reports, including progress reports, are reviewed according to
program-specific policies and procedures and terms/conditions of the Assistance
Agreement.
11.7
-------
VIEWGRAPH* 7(cont.)
TITLE: Evaluation of Final Reports
KEY POINTS:
After all applicable final reports have been received and reviewed, the GMO will
prepare a closeout amendment using the Assistance Adjustment Notice (EPA
Form 5700-42), which indicates the grant/CA is complete. At this time the GMO
notifies the FMO to deobligate any unliquidated obligation balances.
11.8
-------
CLOSEOUT OF CONTINUING
ENVIRONMENTAL PROGRAM AGREEMENTS
Project Officer Prepares Closeout Evaluation
GMO Conducts Financial Status Report Review
VIEWGRAPH* 8
TITLE: Closeout of Continuing Environmental Program Agreements
KEY POINTS:
Closeout of Continuing Environmental Program grants will be completed by EPA
within 180 days following the end of the approved budget period.
The Project Officer evaluates the recipient's performance to determine if all
objectives, outputs, and reporting requirements as set forth in the assistance
agreement have been satisfactorily met. The Project Officer prepares a written
end-of-year closeout evaluation of the recipient's performance within 90 days
following the end of the budget period. The evaluation is signed by the
appropriate program Division Director and a copy is provided to the recipient and
the GMO for inclusion in the official administrative file.
The GMO must ensure that the recipient has submitted the Financial Status
Report (FSR) within 90 days of the end of the budget period. The GMO will
coordinate a review of the FSR for conformance of expenditures reported to the
total amount authorized in the assistance agreement.
The Project Officer or the grants specialist may initiate a request for audit by the
Office of the Inspector General (OIG) when the recipient's performance or
management of grant funds is suspect. If an audit is to be conducted by the OIG,
the official file will not be closed until all audit exceptions have been reconciled.
11.9
-------
MODULE XII
AUDITS
-------
AUDITS
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Describe the Roles of the GMO during Audits
• Discuss the Various Types of Audits Used to Evaluate EPA
Programs and Financial Assistance Recipients
• Identify the EPA Officials Involved with the Audit Process
• Understand the Basic Components of the Audit Process
• Describe the Single Audit Act Requirements
• Identify the Major Provisions of the Inspector General Act
VIEWGRAPH* 1
TITLE: Audits
KEY POINTS:
This module describes the roles of the GMO during audits. As background,
this module identifies various types of audits, the officials involved with the
audit process, and the basic components of the audit process.
Further, this module describes the Single Audit Act requirements and the
major provisions of the Inspector General Act Amendments of 1988.
12 1
-------
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 be expanded scope audits which evaluate the
entire organization or limited scope audits which cover 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 that are performed in accordance with the Single Audit
Act of 1984 (Public Law 98-502) and OMB Circular A-128, and OMB
Circular A-133.
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.
12.2
-------
VIEWGRAPH # 2 (cont.)
TITLE: Types of Audits
KEY POINTS:
Indirect cost audits are reviews conducted to determine whether
the prospective indirect cost rate properly allocates allowable costs.
Audits of recipients may be requested by the Award Official when
considered necessary. These requests should be made on EPA Form
5700-29 "Assistance Audit Request," and should be submitted directly to
the appropriate Divisional Office of the Assistant Inspector General of Audits
(DIGA).
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.
123
-------
AUDIT OFFICIALS
• Inspector General
• Agency Audit Follow-up
Official
• Headquarters or Regional
Audit Follow-up Coordinator
• Action Officials
• Award Officials
VIEWGRAPHtf 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 OAIGA also monitors the
adequacy of Single Audits of recipients. Below this level are several
Divisional Inspector General for Audits (DIGA) who perform audits of the
recipients in their geographic area of responsibility.
The Agency Audit Follow-up Official is responsible for Agency-wide audit
resolution and implementation of required corrective actions. The Assistant
Administrator for Administration and Resources Management is the Agency
Audit Follow-up Official.
The Audit Follow-up Coordinator (AFC) is responsible for the day-to-day
activities that relate to audit management, response, and resolution.
• The Action Official is responsible for responding (on behalf of the audited
organization) to the draft and final reports. (Usually, the GMO is delegated
the Action Official function.)
Award Officials are responsible (through the AFC) for completing
corresponding project files, which include documents and correspondence
relevant to the prospective audits. They have the authority to submit
assistance-related audit requests.
2.4
-------
THE AUDIT PROCESS
| Entrance Conference |
t
| Advisement of Findings |
i
| Draft Report |
+
I Exit Conference |
t
| Final Report |
t
| Audit Resolution |
VIEWGRAPH# 4
TITLE: The Audit Process
KEY POINTS:
This viewgraph illustrates the process typically undertaken each time an EPA
audit is conducted.
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.
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.
Shortly after the audit is completed, a draft report is issued. The report
contains the auditor's findings and documentation to support these findings.
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 trie response
as well.
At the exit conference, the auditors discuss the audit findings with the
organization to clarify any questions they may have about the audit.
125
-------
VIEWGRAPH # 4 (cont.)
TITLE: The Audit Process
KEY POINTS:
After the exit conference, the auditors develop a final audit report containing
their findings and recommendations. After receiving this report, the
organization's management has 90 days 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.
If the Action Official and EPA OIG do not reach agreement on an audit, the
EPA OIG may refer the case to the Audit Review Group (ARG), which
reviews the case and issues a recommendation. The Audit Resolution
Board (ARB) reviews the ARG recommendations and issues a final decision
that is binding on the agency.
126
-------
GMO AND PO RESPONSIBILITIES IN AUDITS
Responding to Audit Questions
Pertaining to Assistance
Agreements
Ensuring Recipient Completes
Corrective Actions
Performs Audit Follow-up
Function
Ensuring Recipient Follows
Single Audit Act Requirements,
as Applicable
VIEWGRAPH* 5
TITLE: GMO and PO Responsibilities in Audits
KEY POINTS:
EPA has cognizance for audit responsibilities over certain State and local
agencies as determined by the Office of Management and Budget.
• Entities receiving assistance from EPA may direct audit questions pertaining
to assistance agreements to the GMO.
• The GMO may also help to ensure that the recipient completes corrective
actions described in EPA's cover letter and with performing various audit
follow-up functions. Additional information on GMO audit follow-up functions
can be found in the Audit Handbook for EPA Managers published by EPA's
Resource Management Division.
The GMO must also ensure that the entities under EPA audit cognizance
follow applicable Single Audit Act requirements.
• The PO will have to answer any programmatic questions raised during the
audit, and the GMO will answer any administrative questions raised.
12.7
-------
THE SINGLE AUDIT ACT OF 1984
AND
STATE, LOCAL GOVERNMENTS, AND INDIAN TRIBES
Financial and Compliance Audits
Generally are Required Annually
• Single Audit Act 1984
- OMB Circular A-128 "Audits of
State and Local Governments"
Other Audits may be Required
VIEWGRAPH* 6
TITLE: The Single Audit Act of 1984 and States, Local Governments, and Indian
Tribes
KEY POINTS:
The Single Audit Act of 1984 requires States, local governments, and Indian
Tribes receiving greater than $25,000 in Federal assistance per year to
perform a financial and compliance audit annually, unless legislation allows
the audits to be performed biannually. Generally, this audit must be
performed on an organization-wide basis. Further, this audit must be
conducted by auditors that are independent of the recipient organization.
OMB Circular A-128 "Audits of State and Local Governments," issued
April 12,1985, provides Federal agencies with policy guidance for
implementing the requirements of the Single Audit Act of 1984.
After conducting a single audit, the recipient sends the final audit report to the
cognizant agency's OIG. The OIG examines the report and determines if it
satisfies Federal regulations.
The Single Audit Act discourages agency audits of areas sufficiently
addressed in an organization's single audit. However, EPA may request other
audits when necessary including: pre-award audits; interim and final cost
audits; indirect cost audits; and audits which evaluate unresolved financial and
compliance issues, economy and efficiency issues, or program results.
12.8
-------
AUDITS OF NON-GOVERNMENT RECIPIENTS
Audits of Institutions of Higher Learning and Other Private
Non-profit Organizations:
- Organization-wide Audits are Required at Least Every
Two Years
- Audits are Required Following Completion of a Project
If Necessary
Audits of For-proflt Organizations, Foreign Organizations,
and Individuals:
• ProJect-by-Project Audits May be Required
- Audits are Requested at the Discretion of the EPA
Project Officer and the Award Official
VIEWGRAPH* 7
TITLE: Audits of Non-government Recipients
KEY POINTS:
Non-government recipients of EPA financial assistance include: institutions of
higher learning and other private non-profit organizations, for-profit
organizations, individuals, and foreign organizations. The audit requirements
for these parties are described below.
The primary audit requirements governing institutions of higher learning and
other non-profit organizations are contained in OMB Circular A-133 "Audits of
Institutions of Higher Learning and Other Non-profit Institutions." The
provisions of this Circular are similar to those of OMB Circular A-128. Under
OMB Circular A-133, institutions of higher education and other non-profit
organizations are responsible for arranging audits of their activities at least
every two years. These audits are to be relied upon by EPA to the maximum
extent possible. Moreover, if requested by the EPA Project Officer or the
Award Official, EPA-supported activities may be audited following completion
of a project.
• For-profit organizations, individuals, and foreign organizations are subject to
individual audits on a project-by-project basis rather than an
organization-wide basis. These audits are requested at the discretion of the
EPA Project Officer and Award Official, and scheduled by the DIGA.
12.9
-------
INSPECTOR GENERAL ACT AMENDMENTS
OF 1988
Made Significant Changes to the Audit Resolution,
Follow-up, and Reporting Process
Expanded EPA's Audit Requirements to Include
Semi-annual Reporting to Congress
Led to the Development of a New Corrective Action
Tracking System
VIEWGRAPH* 8
TITLE: Inspector General Act Amendments of 1988
KEY POINTS:
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.
The Management Audit Tracking System (MATS) is a centralized system
developed to monitor and manage the implementation of required corrective
actions. The system provides EPA with a management tool to use in the
audit process. Using this system, AFCs report the status of their corrective
action for both performance audits and financial and compliance audits.
12.10
-------
APPENDIX A
PROJECT OFFICER
RESPONSIBILITIES
-------
Project Officer Attributes
Administrative Skills
Technical Expertise
Working Knowledge of Regulations
Procedures and Program Objectives
Common Sense
Good Judgement
Creativity
A Willingness to Solve Problems
A Close Partnership with
Grantees and Grants Admin. Section
REMEMBER: YOU. THE PROJECT OFFICER are critical to the successful
completion of work performed under an EPA grant or cooperative
agreement. Under a grant, involvement is limited (e.g.., periodic
review of recipient reports; infrequent site visits); under a
cooperative agreement, there is significant involvement at all
stages of the project.
-------
BASIC EPA PROJECT OFFICER RESPQMSTRTITTTPS
1. Is the grantee's main point of contact with EPA for
technical guidance.
2. Assist prospective applicant in developing a proposal, or
sharpen the focus of a proposal to better meet EPA's needs.
3. Help prospective applicant to understand and comply with
preaward requirements and avoid delays caused by incomplete
application submittal.
a. You should assure they are advised about what forms
to use;
b. Specific EPA program needs and objectives;
c. Evaluation criteria;
d. Whether the proposed costs are eligible, reasonable,
allocable and allowable;
e. Make them aware of the fact EPA does not pay for
costs incurred before a grant has been awarded;
f. Make sure the prospective applicant understands that
there is m commitment by EPA to fund the proposal
being developed;
g. Negotiate the level of funding within the constraints
of the program.
h. Negotiate the special programmatic conditions that
will help you to manage the project if it is funded.
i. Provide applicant with the Catalog of Federal
Domestic Assistance Number for their project, if
applicable. If in doubt, contact Grants Admin. Sec.
4. The P.O. should establish a "working file" for the project.
5. Reviews the proposal for technical merit.
-------
6. Has the basic charge to manage and monitor the performance
of work under the terms of the grant.
a. Oversees the project progress including compliance
with all technical terms and condition;
b. Approves minor modifications to the work plan and
budget;
c. Requests deviations from the nonstatutory
requirements governing the project;
d. Provides technical assistance to help accomplish the
project objectives, project completion and closeout.
e. Assure the project is on schedule and to identify and
resolve problems as they arise.
f. Provide documentation to the Grants Admin. Sec. of
correspondence, meetings, phone calls, etc. that have
a significant bearing on the performance of either
the project, the recipient, or its contractors.
7. Should be familiar with a wide range of regulatory
requirements that apply to the grant.
8. The P.O. need not be expert in the administrative and
financial requirements of the grants process, but they need
to know when to ask, where to look, or from whom to get
answers.
9. Perform site visits.
a. Notify recipient well in advance and advise them of
specific matters you wish to discuss;
b. Contact Grants Admin, to learn of any concerns we
have;
c. Check actual versus scheduled accomplishments;
d. Check condition of equipment/property used on, or
purchased for, the project;
-------
e. Check to see if resources (personnel, equipment,
facilities, etc.) charged to the project are actually
used on the project;
f. Observe conditions that might adversely affect EPA's
interest, i.e., change in the recipient's financial
status; personnel problems; noncompliance with
labor/civil rights laws; over-extension of the
facilities.
g. Provide constructive advice/criticism, but do not try
to actually supervise either the project or the
recipient's employees. In some cases, require
corrective action.
h. Prepare a trip report that highlights your findings
and evaluates the quality of the work being
performed. Provide a copy of this report to Grants
Admin. Sec. for the official file.
10. Review recipient's SF270's (Payment Requests) and SF269's
(Financial Status Reports) to assure that the recipient
uses the funds properly, and in compliance with the
workplan. Send approval to the Grants Admin. Sec.
11. Insist on high quality progress reports as well as their
timely submission.
12. Notify Grants Admin. Sec. promptly if changes to the grant
(budget extensions, budget modifications, increases,
decreases, changes to the scope of work) need to be done.
-------
APPENDIX B
DO'S AND DONTS LIST
-------
Grants "Do's" and "Don'ts"
The following is a brief list of some "do's and don'ts" for
Project Officers concerning the management of a grant (includes
cooperative agreements).
DON'T
1. Direct the hiring, firing, promoting, disciplining, or
rewarding of recipient personnel or contractors under grants.
2. Direct a recipient to award a contract to a specific
individual or firm.
3. Participate in the negotiation or award of a contract under
a grant.
4. Request a recipient to perform work unless the work is part
of the approved workplan.
5. Request a grant when the work should be done under a contract.
6. Direct a recipient to proceed with work until a grant has been
awarded.
7. Tell the recipient that a grant has been awarded before the
Congressional notification process is completed.
8. Authorize pre-award expenditures.
9. Give verbal or written approval for actions requiring a grant
amendment.
10. Give verbal approval for purchases of equipment, changes to
workplan, etc.
DO
1. Do keep up on the progress on your grant and notify your
Grants Specialist of any deficiencies and/or problems relating
to the grant.
2. Do review proposed budget to determine if the applicant's
request is necessary and the associated costs appear
reasonable.
3. Do ask questions to satisfy yourself that the proposed budget
supports the proposed workplan.
4 . Do read progress reports required under the grant to determine
whether the work is proceeding as planned and if there are any
problems.
-------
5. Do allow, where appropriate, competition in the selection of
a recipient.
6. Do document all of your actions under the grant. If a problem
is raised, document the problem and how it was resolved.
7. You may:
o Approve the key personnel (e.g. project director or
principal investigator) of the grantee organization if
specified in an application or grant award.
o Review/comment and approve that proposed contracts are
necessary under the approved workplan, and
o Participate in review panels to make recommendations on
qualified offers and acceptable proposals based on
published evaluation criteria.
8. Do call your Grants Specialist if you have questions
concerning the administration of your grant.
9. Do make sure that the workplan reflects program guidance.
10. Assure that program funds are expended in accordance with
program guidelines.
11. Assure that items being purchased under a grant are being used
for the purposes stated in the grant.
12. Copy the Grants Specialist on all correspondence authorizing
equipment or contractual changes.
13. Assure that all workproducts, deliverables, and tasks under
a grant have been satisfactorily completed and received when
and where required.
14. Follow-up in writing where verbal approval is authorized and
given.
15. Identify statutory authority, regulatory authority, delegation
of authority, and matching share in the Decision Memorandum
recommending assistance.
16. Copy the GMO on all correspondence relating to the grant.
-------
MODULE IX
PROCUREMENT
-------
PROCUREMENT REGULATIONS
RECIPIENT
State
Local
Indian
Unlv/Non-Profit
SUPERFUND
State
Local
Indian
Unlv/Non-Profit
40CFR
Pl It 31
X
X
X
40CFH
P«rt 33
X
X
40 CFR Part 35.
Subpart O
X
X
X
VIEWGRAPH # 1
TITLE: Procurement Regulations
KEY POINTS:
40 CFR Part 31, "Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments," governs procurement
under non-Superfund assistance agreements to State, local, and Indian Tribal
governments. This regulation superceded 40 CFR Part 33 (for the applicable
recipients) as of October 1,1988.
40 CFR Part 33, "Procurement Under Assistance Agreements," governs
procurement activity for institutions of higher education and other non-profit
organizations (including Superfund TAG recipients).
The primary differences between these regulations, with regard to procurement,
are:
The definition of small purchase:
40 CFR Part 33 defines a small purchase as a procurement
transaction costing not more than $10,000
40 CFR Part 31 defines a small purchase as a procurement
transaction costing not more than $25,000
The requirements for cost and price analyses:
40 CFR Part 33 requires a cost or price analysis for actions
estimated to exceed $10,000
40 CFR 31.36(f) requires a cost or price analysis for all
procurements
9.1
-------
PROCUREMENT REQUIREMENTS
States: Follow State Procurement
Procedures
Other Recipients: Follow Federal
Regulations
VIEWGRAPH # 2
TITLE: Procurement Requirements
KEY POINTS:
State recipients will use their own policies and procedures for procurement
actions under these agreements. However, the State must ensure that every
purchase order and contract includes all applicable Federal clauses and laws.
Other recipients may use their own procurement policies and practices if they at
least meet the requirements of the applicable Federal, State, and local laws and
regulations.
Regardless of the type of assistance agreement or the type of recipient, EPA is
not a party to any procurement activity or contract under an assistance
agreement.
9.2
-------
GMO/PO RESPONSIBILITIES
GMO:
- PROCUREMENT SYSTEMS
- INDIVIDUAL CONTRACT DOCUMENTS
PO:
- ENSURES PROCUREMENT IS NECESSARY
- DETERMINES ELIGIBILITY OF COSTS
VIEWGRAPH #3
TITLE: GMO/PO Responsibilities
KEY POINTS:
GMO Responsibilities:
The GMO is responsible for ensuring that the recipient follows the correct
procurement requirements, and may conduct a review of the recipient's procurement
system or a particular procurement action.
The GMO should also review the submission from the Program Office to ensure that
the PO has reviewed the need for a particular procurement and that the PO supports
the proposed procurement.
PO Responsibilities:
The PO should review the Workplan and budget to ensure that if procurement is
proposed, that it is necessary and supported.
The PO may also be able to assist the GMO when the GMO conducts a review of the
recipient's procurement system or procurement action.
Contact GMO if you have specific questions.
9.3
-------
MODULE X
PROPERTY MANAGEMENT
-------
PROPERTY MANAGEMENT
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Define Property According to Its Various Classifications
• Describe the Requirements Governing the Acquisition,
Management, and Disposition of Equipment and Supplies
• Describe the Requirements Governing the Acquisition, Use,
and Disposition of Real Property
• Describe the Requirements Governing Relocation Assistance
Provided under Certain Assistance Programs
• Describe the Requirements Governing Ownership, Use, and
Disposition of Intangible Property Created or Developed with
EPA Assistance
VIEWGRAPH # 1
TITLE: Property Management
KEY POINTS:
This module begins by defining the three classifications of property that can
be acquired under an assistance agreement: personal property, real
property, and intangible property.
The module covers the requirements for acquiring, managing, and disposing
of each type of property under EPA assistance programs The discussion also
addresses these requirements as they vary in their application to different
types of recipients, e.g., States versus non-profit organizations.
In conjunction with the acquisition of real property, this module will cover the
requirements for the provision of relocation assistance.
The regulations pertinent to this discussion are: 40 CFR Part 30 for
institutions of higher education and other non-profit organizations; 40 CFR
Part 31, for assistance agreements to States, local governments, and Indian
Tribes; 40 CFR Part 35, Subpart I, for Waste Water Treatment Construction
grants; and 49 CFR Part 24 for regulations and procedures for complying with
the Uniform Relocation Assistance and Real Property Acquisition Policies Act
of 1970.
Additionally, EPA's Personal Property Management Policy establishes
policies for the management and control of its personal property.
10.1
-------
CLASSIFICATION OF
PROPERTY
Personal Property Real Property Intangible Property
VIEWGRAPH # 2
TITLE: Classification of Property
KEY POINTS:
There are two types of personal property: equipment and supplies.
For all EPA assistance programs awarded to States, local
governments, and Indian Tribes, equipment is defined as tangible,
non-expendable personal property having a useful life of more than
one year and an acquisition cost of $5,000 or more per unit.
For all assistance agreements awarded to States, local governments,
universities, non profits, and Indian Tribes prior to October 1,1988 (the
effective date of 40 CFR Part 31), and Superfund assistance
agreements awarded on or prior to January 27,1989 (the effective
date of 40 CFR Part 35, Subpart O, interim final rule), equipment is
defined as items with a useful life of at least two years and an
acquisition cost of $1,000 or more per unit.
Supplies under all EPA assistance programs 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.
10.2
-------
ACQUISITION OF PERSONAL PROPERTY
Purchase must be Authorized in the Assistance Agreement
Acquisition must Occur During the Budget/Project Period
VIEWGRAPH # 3
TITLE: Acquisition of Personal Property
KEY POINTS:
In order to purchase personal property under an assistance agreement, it must
first be authorized in the agreement.
Recipients may purchase property only during the budget or 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 to transfer
title to another entity within 120 days of the end of the project.
When Federally owned property is provided to the recipient, the title remains
with the Federal government.
The title to supplies vests with the recipient.
The PO must review the workplan and budget and make an affirmative decision
that the type and quantity of property proposed for purchase is appropriate.
10.3
-------
USE OF EQUIPMENT
NON-SUPERFUND ASSISTANCE AGREEMENTS
• Use Equipment for Program or Project as Long as Needed
• Make Equipment Available for other Federally Supported
Programs or Projects
SUPERFUND ASSISTANCE AGREEMENTS
• Document Use by Site, Activity, and Operable Unit (As
Applicable)
VIEWGRAPH # 4
TITLE: Use of Equipment
KEY POINTS:
States will use equipment according to State laws and procedures. Other
recipients must comply with EPA regulations.
Equipment must be used on the project for which it was purchased,
even after the project is no longer supported by Federal funds.
Recipients can also use equipment on other Federally supported
projects; however, this use cannot interfere with the work on the project
for which the equipment was purchased and preference must be given
to projects funded by the awarding agency. If applicable, user fees can
be charged to other projects.
10.4
-------
DISPOSITION OF EQUIPMENT
RECIPIENT
Slate*
Local and Indian
Tribal Government*
Institutions ol Higher
Education or Other
Non-Prom Organizations
CATEGORIES
Determined by Stste Lew
Equipment has • Fair Market Value
of Leas Than $5,000
Equipment hae a Fair Market Value
ol Over $5.000
Non-Expendable Personal Property
Purchased tor Greater Than f 1.0OO
Per Unit
Expendable Personal Property
which has a Fair Market Value ol
SI ,000 or more In Aggregate
OBLIGATION TO
EPA
None
None
Reimburse EPA
Reimburse EPA
Reimburse EPA
VIEWGRAPH # 5
TITLE: Disposition of Equipment
KEY POINTS:
States will dispose of equipment according to State laws and procedures.
Other recipients must comply with EPA regulations.
When equipment obtained under an assistance agreement is no longer needed
for that project, the recipient may use it on another project that is or has been
supported by a Federal agency. If the recipient does not need the equipment,
it must then follow the applicable procedures to dispose of the equipment.
Under 40 CFR Part 31.32, local and Indian Tribal governments, when disposing
of equipment, must determine the current per unit fair market value of the
equipment.
If the value is less than $5,000, then the recipient has no obligation to
reimburse EPA. It may retain the equipment, sell it, or otherwise dispose
of it.
If the value is greater than $5,000, the recipient may retain the
equipment for its own use or sell the equipment. However, the recipient
must reimburse EPA for its proportionate share of the current market
value or the sale price.
10.5
-------
VIEWGRAPH # 5(cont.)
TITLE: Disposition of Equipment
KEY POINTS:
Under 40 CFR §30.532, university and non-profit recipients must assess the
value of property to be disposed of and reimburse EPA as follows:
If the property was purchased for more than $1,000 per unit and is
nonexpendable, the recipient must reimburse EPA for its proportionate
share of the current fair market value.
If the purchase price of the nonexpendable property is less than $1,000,
the recipient may either keep the property or sell it and keep the
proceeds. Exception: profit-making organizations must reimburse EPA
for its proportionate share of the current fair market value.
If the equipment is expendable, the fair market value is used to
determine the obligation to EPA. For expendable equipment with a fair
market value of $1,000 or more in aggregate, the recipient must
reimburse EPA for its proportionate share.
Any recipient may claim the cost of disposal against EPA's proportionate share
that would otherwise be reimbursed.
If the equipment is Federally owned, the recipient must request disposition
instructions from EPA.
10.6
-------
DISPOSITION OF SUPPLIES
SUPPLIES NOT NEEDED ON
ANOTHER FEDERAL PROJECT OR AT
THE END OF THE PROJECT PERIOD
c
Determine Value
$5,000 or Less
1
1
No Obligation
Reimburse EPA
VIEWGRAPH # 6
TITLE: Disposition of Supplies
KEY POINTS:
Disposition of supplies needs to occur when the assistance agreement
terminates, or when the project ends and the supplies are not needed on any
other Federally supported project.
Similar to the Part 31 regulation governing the disposition of equipment, $5,000
is the threshold that determines what procedures must be followed for the
disposition of supplies. The value of supplies is assessed as the aggregate fair
market value of the residual inventory of unused supplies.
If the value is under $5,000, the recipient may keep them and does not
have to compensate EPA.
If the value is over $5,000, upon final disposition, the recipient must
compensate EPA for its interest in the supplies.
10.7
-------
REAL PROPERTY ACQUISITION
Gain Approval In Assistance Agreement
Acquire Under Two Types of Agreements:
• Waste Water Treatment Construction Grants
- Superfund Assistance Agreements
THIe Vests with Recipient
VIEWGRAPH # 7
TITLE: Real Property Acquisition
KEY POINTS:
The acquisition of real property must be approved in the assistance agreement
or an amendment to the agreement.
• The acquisition of real property is also subject to the provisions of 49 CFR Part
24, "Uniform Relocation Assistance and Real Property Acquisition for Federal
and Federally Assisted Programs." (Prior to March 2,1989, this regulation
governing compliance with the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 was found in 40 CFR Part 4.)
Under all assistance agreements, the title to real property must be vested in the
recipient or sub-grantee upon acquisition.
• For Superfund assistance agreements, CERCLA, Section 104 (j) requires a
State or Indian Tribe, (to the extent of its legal authority), to provide the
assurance that it will acquire and hold the real property interest before receiving
a Remedial Action cooperative agreements.
- If necessary, the Federal government may acquire the interest in the real
property and require the State or Indian Tribe, (to the extent of its legal
authority), to agree to accept transfer of the acquired interest before
completion of the response action.
- The regulation requires the Indian Tribe to acquire or assume title to the
real properly only "to the extent of its legal authority." This exception
intended primarily to accommodate an Indian Tribe that does not have the
legal authority to acquire real property.
10.8
-------
REAL PROPERTY USE AND DISPOSITION
• Use for Authorized Purpose
• Disposal Options
• Retain
• Sell Property
- Transfer Title
VIEWGRAPH # 8
TITLE: Real Property Use and Disposition
KEY POINTS:
Real property is to be used only for the purpose authorized in the assistance
agreement, and should be retained only as long as it is needed.
• When the real property is no longer needed for the original purpose, the
recipient must request disposition instructions from EPA. There are three
alternative methods available to the recipient for disposing of real property:
Retain and compensate EPA for its share. Under 40 CFR Part 31, EPA
will be compensated according to its percentage of interest in the original
purchase applied to the current fair market value of the real property.
Sell the real property and compensate EPA for its share. EPA will be
compensated according to its percentage of interest in the original
purchase applied to the proceeds of the sale, minus reasonable selling
expenses.
Transfer title to EPA or a third-party approved by EPA. The recipient will
be compensated according to its percentage of interest in the original
purchase applied to the current fair market value of the property.
If property is sold or transferred from a State or local government to a private
party, Executive Order 12803 on Infrastructure Privitization establishes a
different set of guidelines for distributing the compensation received. State and
local governments are compensated first and the Federal Government second.
The compensation is not necessarily the fair market value of the property, and
is distributed according to a schedule designated in the E.O.. If the property is
sold or transferred to other than a private party, EPA is compensated for its
share as stated in the previous paragraph.
10.9
-------
RELOCATION ASSISTANCE
Provided as Part of Real Property Acquisition
Provisions Identified under 49 CFR Part 24
VIEWGRAPH # 9
TITLE: Relocation Assistance
KEY POINTS:
The acquisition of real property and/or the implementation of a response action
at a site can necessitate the relocation of residents. In these instances, there
are regulations governing the requirements and procedures for conducting
relocation activities.
49 CFR Part 24 covers:
General relocation requirements, including relocation notices;
comparable replacement dwellings; relocation planning, advisory
services, and coordination; eviction for cause; claims for relocation
payments; and treatment of relocation payments
Payments for moving and related expenses, including payment for actual
reasonable expenses, fixed payment, and re-establishment expenses for
residential and non-residential moves
Replacement housing payments for varying periods of time
Payment of expenses for mobile homes.
10.10
-------
INTANGIBLE PROPERTY
EPA Retains Rights to:
- Copyrighted Materials
- Products Developed or Purchased under Assistance
Agreements
VIEWGRAPH # 10
TITLE: Intangible Property
KEY POINTS:
EPA reserves a royalty-free, nonexclusive, and irrevocable license to
reproduce, publish, or otherwise use intangible property, i.e., copyrights and
patents:
Developed under an assistance agreement
Purchased with assistance agreement support.
40 CFR Parts 30, and 31 require that all contracts let by the recipient must
include notice of EPA's requirements with regard to the development or
acquisition of intangible property.
10.11
-------
MODULE XI
CLOSEOUT
-------
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.
This module also describes the specific roles and responsibilities of EPA staff
and recipients during closeout.
11.1
-------
PURPOSE OF CLOSEOUT
Proper Closeout Ensures the Completion of All:
Technical Work
Administrative Work
VIEWGRAPH # 2
TITLE: purpose of cioseout
KEY POINTS:
The cioseout 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.
Cioseout is performed when a project ends due to completion or termination. A
project may be terminated because of insufficient funds, complications with the
response action, or, in the case of a Superfund project, a change in the lead (i.e.,
from State to Federal).
Cioseout ensures a final accounting of expenditures and a determination from
the Project Officer that all technical work has been completed and is satisfactory.
Cioseout also ensures that any remaining unliquidated obligation balances are
promptly deobligated for possible use on funding other projects.
11.2
-------
SOURCES OF REQUIREMENTS
40 CFR Part 31, Subpart D
40 CFR Part 30, Subpart H
40 CFR Part 35, Subpart O
EPA Assistance Administration Manual Chapter 40
VIEWGRAPH # 3
TITLE: Sources of Requirements
KEY POINTS:
40 CFR Part 31 provides closeout requirements for grants to States, Indian
Tribes, and local governments. Specifically, it states that EPA staff must notify
the recipient before the end of the last budget period and provide forms the
recipient must file during the closeout process. It also describes other activities
which must precede a closeout: (1) receipt of required reports, (2) disposition or
recovery of Federally owned assets, and (3) adjustment of the award amount
and the amount of Federal cash paid the recipient.
40 CFR Part 30 provides closeout requirements for universities, hospitals, and
other non-profit organizations.
Chapter 40 of the EPA Assistance Administration Manual (AAM) also provides
policies and procedures for closeout.
11.3
-------
TIMING OF CLOSEOUT
TYPE OF AGREEMENT
Project Grants
Continuing Environmental
Programs
All
TIMING OF CLOSEOUT
When Project Ends
When Latest Continuation Agreement
Ends
When 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
(e.g., that the facility is working as designed), all eligible costs have been
accepted, all repayments have been received, all grant conditions have been met,
and all issues resulting from audits have been resolved. The timing of closeout
depends primarily on the type of agreement or contract. The viewgraph illustrates
when closeout of various types of agreements should take place.
Closeout of most grants begins when the project has been completed
satisfactorily.
Closeout of Continuing Environmental Program grants begins on the date the
latest Continuation Agreement expires.
11.4
-------
INITIATING CLOSEOUT
To Initial* Closeout, 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:
Periodically, the grants management office (GMO) obtains and reviews the
"Status Report of Projects Completed But Not Closed Out" through the Grants
Information Control System (GICS).
For projects scheduled to end in 90 days, the GMOs should prepare and send a
"Reminder Letter" to remind the recipient and Project Officer of the upcoming
closeout, and update GICS when the status changes.
The PO must inform the GMO if the project should be closed out or extended.
11.5
-------
DELIVERY OF PRODUCTS AND REPORTS
THE PROJECT OFFICER MUST ENSURE:
Satisfactory Final Product
Output Commitments
VIEWGRAPH # 6
TITLE: Delivery of Products and Reports
KEY POINTS:
In accordance with the assistance agreement, the recipient must deliver a
satisfactory final product(s), including all deliverables.
The PO must ensure the GMO that within 90 days of project completion that:
- All work has been satisfactorily completed. For continuing Environmental
Program grants, specific work elements may be carried forward and funded in
the next year provided the recipient submits an application with an acceptable
workplan.
- All technical (programmatic) award conditions have been met.
The PO must also notify the GMO:
- How to handle any personal property purchased under the agreement
- How to handle any unliquidated funds
11.6
-------
EVALUATION OF FINAL REPORTS
Final Progress Report
Federally Owned Property Report /
Disposition of Property
Final Financial Status Report
Invention Report
Other Required Reports
VIEWGRAPH # 7
TITLE: Evaluation of Final Reports
KEY POINTS:
The final stage in the closeout process involves EPA's review of the final reports.
If inaccuracies or problems are identified during this stage, the Project
Officer/GMO must work with the recipient to resolve these problems.
If the final report will be published, it must be reviewed through the EPA
publication review process and the Project Officer and the Award Official are
responsible for ensuring this process is used. For all Final Progress Reports
accepted for publication, the Project Officer submits a Technical Data Report
(EPA Form 2220-1) to the appropriate grants specialist and submits a Technical
Data Report and two copies of the Final Progress Report to the Headquarters
library.
Before closeout can be completed, the recipient must ensure the proper disposal
of all Federally owned property. Once the GMO receives the recipient's list of
Federally owned property, it must notify the recipient of property disposition
requirements, if applicable.
Final Financial Status Reports must reflect the proper reconciliation of all
accounting data including all necessary cash and cost adjustments. Such
adjustments may include settlement of obligated yet unexpended funds,
payments owed EPA, and requests for reimbursements. The grants specialist is
responsible for reviewing the final Financial Status Report and providing copies
to the Project Officer and FMO for their review.
Other required reports, including progress reports, are reviewed according to
program-specific policies and procedures and terms/conditions of the Assistance
Agreement.
11.7
-------
VIEWGRAPH# 7(cont.)
TITLE: Evaluation of Final Reports
KEY POINTS:
After all applicable final reports have been received and reviewed, the GMO will
prepare a closeout amendment using the Assistance Adjustment Notice (EPA
Form 5700-42), which indicates the grant/CA is complete. At this time the GMO
notifies the FMO to deobligate any unliquidated obligation balances.
11.8
-------
CLOSEOUT OF CONTINUING
ENVIRONMENTAL PROGRAM AGREEMENTS
• Project Officer Prepares Closeout Evaluation
• GMO Conducts Financial Status Report Review
VIEWGRAPH* 8
TITLE: Closeout of Continuing Environmental Program Agreements
KEY POINTS:
Closeout of Continuing Environmental Program grants will be completed by EPA
within 180 days following the end of the approved budget period.
The Project Officer evaluates the recipient's performance to determine if all
objectives, outputs, and reporting requirements as set forth in the assistance
agreement have been satisfactorily met. The Project Officer prepares a written
end-of-year closeout evaluation of the recipient's performance within 90 days
following the end of the budget period. The evaluation is signed by the
appropriate program Division Director and a copy is provided to the recipient and
the GMO for inclusion in the official administrative file.
The GMO must ensure that the recipient has submitted the Financial Status
Report (FSR) within 90 days of the end of the budget period. The GMO will
coordinate a review of the FSR for conformance of expenditures reported to the
total amount authorized in the assistance agreement.
The Project Officer or the grants specialist may initiate a request for audit by the
Office of the Inspector General (OIG) when the recipient's performance or
management of grant funds is suspect. If an audit is to be conducted by the OIG,
the official file will not be closed until all audit exceptions have been reconciled.
11.9
-------
MODULE XII
AUDITS
-------
AUDITS
BY THE END OF THIS MODULE YOU WILL BE ABLE TO:
• Describe the Roles of the GMO during Audits
• Discuss the Various Types of Audits Used to Evaluate EPA
Programs and Financial Assistance Recipients
• Identify the EPA Officials Involved with the Audit Process
• Understand the Basic Components of the Audit Process
• Describe the Single Audit Act Requirements
• Identify the Major Provisions of the Inspector General Act
VIEWGRAPH* 1
TITLE: Audits
KEY POINTS:
This module describes the roles of the GMO during audits. As background,
this module identifies various types of audits, the officials involved with the
audit process, and the basic components of the audit process.
Further, this module describes the Single Audit Act requirements and the
major provisions of the Inspector General Act Amendments of 1988.
12
-------
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 be expanded scope audits which evaluate the
entire organization or limited scope audits which cover 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 that are performed in accordance with the Single Audit
Act of 1984 (Public Law 98-502) and OMB Circular A-128, and OMB
Circular A-133.
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.
122
-------
VIEWGRAPH # 2 (cont.)
TITLE: Types of Audits
KEY POINTS:
Indirect cost audits are reviews conducted to determine whether
the prospective indirect cost rate properly allocates allowable costs.
Audits of recipients may be requested by the Award Official when
considered necessary. These requests should be made on EPA Form
5700-29 "Assistance Audit Request," and should be submitted directly to
the appropriate Divisional Office of the Assistant Inspector General of Audits
(DIGA).
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.
123
-------
AUDIT OFFICIALS
• Inspector General
• Agency Audit Follow-up
Official
• Headquarters or Regional
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 OAIGA also monitors the
adequacy of Single Audits of recipients. Below this level are several
Divisional Inspector General for Audits (DIGA) who perform audits of the
recipients in their geographic area of responsibility.
The Agency Audit Follow-up Official is responsible for Agency-wide audit
resolution and implementation of required corrective actions. The Assistant
Administrator for Administration and Resources Management is the Agency
Audit Follow-up Official.
The Audit Follow-up Coordinator (AFC) is responsible for the day-to-day
activities that relate to audit management, response, and resolution.
• The Action Official is responsible for responding (on behalf of the audited
organization) to the draft and final reports. (Usually, the GMO is delegated
the Action Official function.)
Award Officials are responsible (through the AFC) for completing
corresponding project files, which include documents and correspondence
relevant to the prospective audits. They have the authority to submit
assistance-related audit requests.
12.4
-------
THE AUDIT PROCESS
c
t
[
i;
[
i
Entrance Conference
t
Advisement of Findings
t
Draft Report
f
Exit Conference
t
Final Report
1
Audit Resolution
]
1
i
1
i
^
VIEWGRAPH* 4
TITLE: The Audit Process
KEY POINTS:
This viewgraph illustrates the process typically undertaken each time an EPA
audit is conducted.
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.
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.
Shortly after the audit is completed, a draft report is issued. The report
contains the auditor's findings and documentation to support these findings.
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.
At the exit conference, the auditors discuss the audit findings with the
organization to clarify any questions they may have about the audit.
125
-------
VIEWGRAPH # 4 (cont.)
TITLE: The Audit Process
KEY POINTS:
After the exit conference, the auditors develop a final audit report containing
their findings and recommendations. After receiving this report, the
organization's management has 90 days 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.
If the Action Official and EPA OIG do'not reach agreement on an audit, the
EPA OIG may refer the case to the Audit Review Group (ARG), which
reviews the case and issues a recommendation. The Audit Resolution
Board (ARB) reviews the ARG recommendations and issues a final decision
that is binding on the agency.
126
-------
GMO AND PO RESPONSIBILITIES IN AUDITS
Responding to Audit Questions
Pertaining to Assistance
Agreements
Ensuring Recipient Completes
Corrective Actions
Performs Audit Follow-up
Function
Ensuring Recipient Follows
Single Audit Act Requirements,
as Applicable
VIEWGRAPH # 5
TITLE: GMO and PO Responsibilities in Audits
KEY POINTS:
EPA has cognizance for audit responsibilities over certain State and local
agencies as determined by the Office of Management and Budget.
Entities receiving assistance from EPA may direct audit questions pertaining
to assistance agreements to the GMO.
The GMO may also help to ensure that the recipient completes corrective
actions described in EPA's cover letter and with performing various audit
follow-up functions. Additional information on GMO audit follow-up functions
can be found in the Audit Handbook for EPA Managers published by EPA's
Resource Management Division.
The GMO must also ensure that the entities under EPA audit cognizance
follow applicable Single Audit Act requirements.
• The PO will have to answer any programmatic questions raised during the
audit, and the GMO will answer any administrative questions raised.
12.7
-------
THE SINGLE AUDIT ACT OF 1984
AND
STATE, LOCAL GOVERNMENTS, AND INDIAN TRIBES
Financial and Compliance Audits
Generally are Required Annually
• Single Audit Act 1984
• OMB Circular A-128 "Audits of
State and Local Governments"
Other Audits may be Required
VIEWGRAPH# 6
TITLE: The Single Audit Act of 1984 and States, Local Governments, and Indian
Tribes
KEY POINTS:
The Single Audit Act of 1984 requires States, local governments, and Indian
Tribes receiving greater than $25,000 in Federal assistance per year to
perform a financial and compliance audit annually, unless legislation allows
the audits to be performed biannually. Generally, this audit must be
performed on an organization-wide basis. Further, this audit must be
conducted by auditors that are independent of the recipient organization.
OMB Circular A-128 "Audits of State and Local Governments," issued
April 12,1985, provides Federal agencies with policy guidance for
implementing the requirements of the Single Audit Act of 1984.
After conducting a single audit, the recipient sends the final audit report to the
cognizant agency's OIG. The OIG examines the report and determines if it
satisfies Federal regulations.
The Single Audit Act discourages agency audits of areas sufficiently
addressed in an organization's single audit. However, EPA may request other
audits when necessary including: pre-award audits; interim and final cost
audits; indirect cost audits; and audits which evaluate unresolved financial and
compliance issues, economy and efficiency issues, or program results.
12.8
-------
AUDITS OF NON-GOVERNMENT RECIPIENTS
Audits of Institutions of Higher Learning and Other Private
Non-profit Organizations:
- Organization-wide Audits are Required at Least Every
Two Years
- Audits are Required Following Completion of a Project
If Necessary
Audits of For-profit Organizations, Foreign Organizations,
and Individuals:
- Project-by-Project Audits May bo Required
- Audits are Requested at the Discretion of the EPA
Project Officer and the Award Official
VIEWGRAPH# 7
TITLE: Audits of Non-government Recipients
KEY POINTS:
Non-government recipients of EPA financial assistance include: institutions of
higher learning and other private non-profit organizations, for-profit
organizations, individuals, and foreign organizations. The audit requirements
for these parties are described below.
The primary audit requirements governing institutions of higher learning and
other non-profit organizations are contained in OMB Circular A-133 "Audits of
Institutions of Higher Learning and Other Non-profit Institutions." The
provisions of this Circular are similar to those of OMB Circular A-128. Under
OMB Circular A-133, institutions of higher education and other non-profit
organizations are responsible for arranging audits of their activities at least
every two years. These audits are to be relied upon by EPA to the maximum
extent possible. Moreover, if requested by the EPA Project Officer or the
Award Official, EPA-supported activities may be audited following completion
of a project.
For-profit organizations, individuals, and foreign organizations are subject to
individual audits on a project-by-project basis rather than an
organization-wide basis. These audits are requested at the discretion of the
EPA Project Officer and Award Official, and scheduled by the DIGA.
12.9
-------
INSPECTOR GENERAL ACT AMENDMENTS
OF 1988
• Made Significant Changes to the Audit Resolution,
Follow-up, and Reporting Process
• Expanded EPA's Audit Requirements to Include
Semi-annual Reporting to Congress
• Led to the Development of a New Corrective Action
Tracking System
VIEWGRAPH* 8
TITLE: Inspector General Act Amendments of 1988
KEY POINTS:
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.
The Management Audit Tracking System (MATS) is a centralized system
developed to monitor and manage the implementation of required corrective
actions. The system provides EPA with a management tool to use in the
audit process. Using this system, AFCs report the status of their corrective
action for both performance audits and financial and compliance audits.
12.10
-------
APPENDIX A
PROJECT OFFICER
RESPONSIBILITIES
-------
Project Officer Attributes
Administrative Skills
Technical Expertise
Working Knowledge of Regulations
Procedures and Program Objectives
Common Sense
Good Judgement
Creativity
A Willingness to Solve Problems
A Close Partnership with
Grantees and Grants Admin. Section
REMEMBER: YOU. THE PROJECT OFFICER are critical to the successful
completion of work performed under an EPA grant or cooperative
agreement. Under a grant, involvement is limited (e.g.., periodic
review of recipient reports; infrequent site visits); under a
cooperative agreement, there is significant involvement at all
stages of the project.
-------
BASIC EPA PROJECT OFFICER RESPONSIBILITIES
1. Is the grantee's main point of contact with EPA for
technical guidance.
2. Assist prospective applicant in developing a proposal, or
sharpen the focus of a proposal to better meet EPA's needs.
3. Help prospective applicant to understand and comply with
preaward requirements and avoid delays caused by incomplete
application submittal.
a. You should assure they are advised about what forms
to use;
b. Specific EPA program needs and objectives;
c. Evaluation criteria;
d. Whether the proposed costs are eligible, reasonable,
allocable and allowable;
e. Make them aware of the fact EPA does not pay for
costs incurred before a grant has been awarded;
f. Make sure the prospective applicant understands that
there is no. commitment by EPA to fund the proposal
being developed;
g. Negotiate the level of funding within the constraints
of the program.
h. Negotiate the special programmatic conditions that
will help you to manage the project if it is funded.
i. Provide applicant with the Catalog of Federal
Domestic Assistance Number for their project, if
applicable. If in doubt, contact Grants Admin. Sec.
4. The P.O. should establish a "working file" for the project.
5. Reviews the proposal for technical merit.
-------
6. Has the basic charge to manage and monitor the performance
of work under the terms of the grant.
a. Oversees the project progress including compliance
with all technical terms and condition;
b. Approves minor modifications to the work plan and
budget;
c. Requests deviations from the npnstatutory
requirements governing the project;
d. Provides technical assistance to help accomplish the
project objectives, project completion and closeout.
e. Assure the project is on schedule and to identify and
resolve problems as they arise.
f. Provide documentation to the Grants Admin. Sec. of
correspondence, meetings, phone calls, etc. that have
a significant bearing on the performance of either
the project, the recipient, or its contractors.
7. Should be familiar with a wide range of regulatory
requirements that apply to the grant.
8. The P.O. need not be expert in the administrative and
financial requirements of the grants process, but they need
to know when to ask, where to look, or from whom to get
answers.
9. Perform site visits.
a. Notify recipient well in advance and advise them of
specific matters you wish to discuss;
b. Contact Grants Admin, to learn of any concerns we
have;
c. Check actual versus scheduled accomplishments;
d. Check condition of equipment/property used on, or
purchased for, the project;
-------
e. Check to see if resources (personnel, equipment,
facilities, etc.) charged to the project are actually
used on the project;
f. Observe conditions that might adversely affect EPA's
interest, i.e., change in the recipient's financial
status; personnel problems; noncompliance with
labor/civil rights laws; over-extension of the
facilities.
g. Provide constructive advice/criticism, but do not try
to actually supervise either the project or the
recipient's employees. In some cases, require
corrective action.
h. Prepare a trip report that highlights your findings
and evaluates the quality of the work being
performed. Provide a copy of this report to Grants
Admin. Sec. for the official file.
10. Review recipient's SF270's (Payment Requests) and SF269's
(Financial Status Reports) to assure that the recipient
uses the funds properly, and in compliance with the
workplan. Send approval to the Grants Admin. Sec.
11. Insist on high quality progress reports as well as their
timely submission.
12. Notify Grants Admin. Sec. promptly if changes to the grant
(budget extensions, budget modifications, increases,
decreases, changes to the scope of work) need to be done.
-------
APPENDIX B
DO'S AND DONTS LIST
-------
Grants "Do's" and "Don'ts"
The following is a brief list of some "do's and don'ts" for
Project Officers concerning the management of a grant (includes
cooperative agreements).
DON'T
1. Direct the hiring, firing, promoting, disciplining, or
rewarding of recipient personnel or contractors under grants.
2. Direct a recipient to award a contract to a specific
individual or firm.
3. Participate in the negotiation or award of a contract under
a grant.
4. Request a recipient to perform work unless the work is part
of the approved workplan.
5. Request a grant when the work should be done under a contract.
6. Direct a recipient to proceed with work until a grant has been
awarded.
7. Tell the recipient that a grant has been awarded before the
Congressional notification process is completed.
8. Authorize pre-award expenditures.
9. Give verbal or written approval for actions requiring a grant
amendment.
10. Give verbal approval for purchases of equipment, changes to
workplan, etc.
DO
1. Do keep up on the progress on your grant and notify your
Grants Specialist of any deficiencies and/or problems relating
to the grant.
2. Do review proposed budget to determine if the applicant's
request is necessary and the associated costs appear
reasonable.
3. Do ask questions to satisfy yourself that the proposed budget
supports the proposed workplan.
4 . Do read progress reports required under the grant to determine
whether the work is proceeding as planned and if there are any
problems.
-------
5. Do allow, where appropriate, competition in the selection of
a recipient.
6. Do document all of your actions under the grant. If a problem
is raised, document the problem and how it was resolved.
7. You may:
o Approve the key personnel (e.g. project director or
principal investigator) of the grantee organization if
specified in an application or grant award.
o Review/comment and approve that proposed contracts are
necessary under the approved workplan, and
o Participate in review panels to make recommendations on
qualified offers and acceptable proposals based on
published evaluation criteria.
8. Do call your Grants Specialist if you have questions
concerning the administration of your grant.
9. Do make sure that the workplan reflects program guidance.
10. Assure that program funds are expended in accordance with
program guidelines.
11. Assure that items being purchased under a grant are being used
for the purposes stated in the grant.
12. Copy the Grants Specialist on all correspondence authorizing
equipment or contractual changes.
13. Assure that all workproducts, deliverables, and tasks under
a grant have been satisfactorily completed and received when
and where required.
14. Follow-up in writing where verbal approval is authorized and
given.
15. Identify statutory authority, regulatory authority, delegation
of authority, and matching share in the Decision Memorandum
recommending assistance.
16. Copy the GMO on all correspondence relating to the grant.
-------
APPENDIX C
GRANTS VS
COOPERATIVE
AGREEMENTS
-------
i
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DEC - 2 1992
MEMORANDUM
OFFICE OF
ADMINISTRATION
AND RESOURCES
MANAGEMENT
SUBJECT: When to Use Contracts or Cooperative Agreements and
Grants ^_^ ^ ^ ^
FROM: Christian R. Hoi
Assistant Admini
TO: Assistant Administrators
Regional Administrators
Assistant Regional Administrators
As you know, OARM has moved aggressively over the past several
months to improve the Agency's contracts management system. In so
doing, we have received questions from program offices as to the
types of activities that can be funded under assistance agreements,
including grants and cooperative agreements. In response to those
questions, and to ensure that we do not inadvertently create
problems in the area of assistance administration, the purpose of
this memorandum is to inform you that assistance agreements may not
be used to fund extramural projects except where permitted by the
Federal Grant and Cooperative Agreement Act of 1977 (FGCA or Act) ,
Public Law 95-224, as amended, 31 U.S.C. 6301 et seg.
The FGCA was based on a congressional finding that executive
agencies were not adequately differentiating between procurement
and assistance relav onships. 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
FGCA the standards for determining the appropriate use of contracts
and assistance agreements.
Under section 4 of the FGCA, 31 U.S.C. 6303, an agency must
use a procurement contract if the principal purpose of an agreement
with an eligible entity 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. Conversely, under
sections 5 and 6 of the FGCA, 31 U.S.C. 6304 and 6305, an agency
may use an assistance agreement only if the principle purpose of
Printed on Recycled Paper
-------
an agreement is to transfer a thing 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 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 FGCA, 31 U.S.C. 6307, the Office of
Management and Budget (OMB) is authorized to grant exceptions from
the Act's requirements in individual cases. OMB's policy is not
to allow exceptions absent a c^ear demonstration chat compliance
with the Act would result in serious programmatic harm. If an
agency fails to comply with the Act by awarding an assistance
agreement where a contract would be required, the costs of the
agreement may be disallowed during the audit process.
The criteria outlined in the FGCA are described in EPA Order
1000.19 and chapter 1 of the Agency's Assistance Administration
Manual. Under the EPA Order, a program office must initially
determine whether a particular agreement involves a procurement or
assistance relationship, subject to the concurrence of the Director
of the Grants Administration Division or the Director, Procurement
and Contracts Management Division. Consistent with the FGCA, these
determinations must be based on an assessment of whether the
principal purpose of a transaction is for EPA's direct benefit and
use, and, if not, whether the level of Agency involvement warrants
a grant or cooperative agreement.
As a general rule, if an office's primary objective in
undertaking a project is to obtain a product or service for the
Agency, 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. The principal purpose test cannot be satisfied to
allow the use of an assistance agreement merely by developing a
scope of work that describes a project as not being for EPA's
direct benefit and use. To withstand an audit, there must be
substance behind the scope of work that the project is, in fact,
intended to stimulate a recipient to accomplish a public purpose
authorized by statute.
As provided for in applicable EPA regulations for assistance
awards, examples of activities that EPA funds through assistance
agreements include awards for:
o State continuing environmental programs, such as groundwater
protection, pesticide enforcement, and public water system
supervision;
o Constructing local wastewater treatment plants;
o State and local government cleanup of hazardous waste sites;
-------
o Environmental education projects;
o Conducting basic research; and
o Training for non-Federal personnel.
Examples of activities that cannot be funded through
assistance agreements include projects to:
o Support the work of EPA Federal Advisory Committee Act
Committees;
o Provide technical, analytical, and application review advice
for the direct benefit of EPA offices;
o Deliver computer models specifically for EPA regulatory use;
and
o Produce specific information that will be directly
incorporated into Agency technical, policy, or regulatory
decisions.
If it is unclear in a particular instance whether an
assistance agreement would be permissible under the FGCA, you
should contact your Headquarters or Regional Grants Administration
Office. These Offices will, as appropriate, work with the Grants
Division of the Office of General Counsel to develop an Agency
position.
If you have any questions about this issue, please contact
Mr. Bruce Feldman of the Grants Administration Division (202-260-
5268) .
-------
APPENDIX D
PERFORMANCE BASED
ASSISTANCE POLICY
-------
(
i
J UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON oc 2046°
NffSI MS
THE ADMINISTRATOR
MEMORANDUM
SUBJECTS Policy on Performance-Bated Assistance
FROMs Lee M. Thomas
TOs Assistant Administrators
General Counsel
Inspector General
Associate Administrator
Regional Administrators
Staff Office Directors
Division Directors
I 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. In the past* the process for developing
and managing assistance agreements has varied significantly among
programs and Regions. This policy establishes an Agency-wide
approach toward negotiating assistance agreements* conducting
oversight of those agreements* and responding to key oversight
findings. While the aim of the policy is a consistent approach
across Agency programs* it retains considerable flexibility for
Regions to tailor assistance agreements to the unique environ-
mental conditions oC particular States.
This policy is effective immediately. The accompanying
Question and Answer Package explains how PY'86 assistancs agree-
ments will be expected to comply with it and details the rationale
behind major policy components.
The Deputy Administrator will monitor implementation of the
Policy on Performance-Based Assistancs 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.
-------
-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.
Z 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
Organisations. I believe they have done an excellent job and
hope their effort can serve as a model for future EPA/State
decision-making.
I look forward to strong Agency commitment to this policy.
You can be assured of my full support as EPA and the States move
forward with its implementation.
Attachments
-------
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 Organisations 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 negotiated, how a State's performance
against negotiated commitments should be assessed, and what actions
should be taken to reward accomplishments and correct problems.
The overall approach is one of EPA/State cooperation in setting
and attaining environmental goals through.effective State programs.
I anticipate strong Agency commitment to the principles of
this policy and look forward to the strengthening of the EPA/State
partnership I believe will result fron this approach.
Lee M. Thomas Date
Administrator
-------
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 acc<
plishment of specific activities agreed to in advance are contained
in EPA's regulations governing State and Local Assistance (40 CPR
Part 35r Subpart A). The degree and manner in which EPA programs
and Regions have applied these regulations has varied greatly.
Through this policy,.the Agency articulates how it will consistently
manage its intergovernmental assistance.
SCOPE
EPA's Regions will be expected to implement the portions of
this policy governing the management of assistance agreements
("Oversight" and 'Consequences, of Oversight* sections) upon the
policy's issuance. To the greatest extent possible, this policy
should also guide the negotiation of grants and cooperative
agreements for fiscal year 1986.
This policy supersedes all previous policies on performance-
based assistance to the extent they conflict with the approach
outlined below. 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.
-------
-2-
PRIMCIPLES AMP 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 performance-based assistance as a management
tool to promote and recognise the effective performance
of State environmental programs, and to ensure mutual
accountability*
o EPA Regions and programs will retain flexibility to tailor
the performance-based approach to their needs and the policy's
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 commitments and presume good
faith in their accomplishment}
o EPA and the States should maintain continuous dialogue
for the rapid identification* solution and escalation
of problems to top level managers}
o EPA is fully committed to the success of State environ-
mental programs and will seek opportunities to acknowl-
edge tneir accoaplishments.
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 EPA's expectations for
the review and evaluation of assistance agreements and escalation
of significant findings. The final section describes hew 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.
-------
-3-
ASSISTANCE
Clear expectations Cor 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 programi 2) identification of support (other than federal
assistance funds) a State needs from EPA to accomplish work program
commitmentsi and, 3) a monitoring and evaluation plan.
APPROACH
EPA will require that the top national priorities as identified
in Agency guidance be explicitly addressed in all State work pro-
grams. As EPA and States negotiate outputs* national priorities
should be tailored to the real environmental conditions of each Statg
and Region.
Assistance agreements may include outputs based on a State's
priorities if those activities promise to deliver a greater environ-
mental benefit than a national priority. State priorities should
represent only those activities allowable under Federal statutes.
The appropriate mix of national and State priorities will vary
from work program to work program* according to the unique features
of each environmental program in each State. Regional offices must
exercise their judgment and negotiate with States over what combina-
tion of national and State priorities can deliver the greatest
environmental benefit with resources available after EPA's top
national priorities have been addressed.
To better facilitate the negotiation of assistance agreements,
the Agency's Operating Guidance should be strengthened through early
State involvement in defining the order and scope of Agency
priorities, a realistic consideration of funding limitations
throughout its development* and specific identification of top
priorities by Program Offices.
The development and oversight of an assistance agreement should
be supervised by one senior Regional manager* EPA Regional Admini-
strators are ultimately accountable for all assistance agreements
made with States and should be familiar with the significant
outputs and conditions of each agreement. They will be respon-
sible for all major assistance-related decisions.
Assistance agreements may be amended by mutual agreement of
the Regional Administrator and his/her State counterpart. A major
change in national or State priorities, environmental emergencies,
and the discovery of greatly overestimated commitments are examples
of the types of circumstances which may necessitate renegotiation.
-------
-4-
MORK 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 should influence the 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 indicates activities* if any, outside
those paid for with the federal and State funds included
in the federal assistance agreement budget. Awareness
of State responsibilites not related to federal assistance
greatly enhances EPA's understanding of the scope of
State environmental programs. Should a State choose to
submit plans for its entire program, it 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 beat 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 Read-
quarters action.
-------
-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 CPA support. If
EPA does not furnish the support described in the assistance
agreement, the State will be relieved of output commitments
contingent upon that support.
EVALUATION PLAN
The final component of an assistance agreement is a plan
for EPA"a evaluation of State performance. The evaluation plan
should be mutually acceptable to EPA and a State.
o The plan should outline the schedule and scope of review
EPA will conduct and should identify areas the evaluation
will focus on.
o An evaluation plan must specify at least one on-site
review per year, performance measures, and reporting
requirements.
ASSISTANCE OVERSIGHT
EPA should oversee assistance agreements both informally and
formally. Regions and States should maintain continuous dialogue
so that States may alert EPA to problems they are experiencing and
EPA can monitor State progress toward accomplishing outputs. EPA
should also periodically conduct a formal evaluation of State per-
formance. Oversight should identify the successes and problems
States have encountered in meeting their commitments. Oversight
also entails the joint analysis of identified problems to determine
their nature, cause, and appropriate solution, and the escalation
of significant findings (both positive and negative) to top managers
in the Region and the State.
APPROACH
The formal assessment of State performance under assistance
agreements should occur as part of EPA's comprehensive review
and evaluation of State programs. This process is governed by
EPA's Policy on Oversight of Delegated Programs which states
that evaluations should focus on overall program performance
(within a given program), rather than individual actions! they
should be based on objective measures and standards agreed to
in advancer they should be conducted on-site at least once a
year by experienced, skilled EPA staffy they should contain no
-------
-6-
surprises for States regarding content or expectations; and
results should be documented in a written report.
EPA should adhere to these principles of oversight and to
the scope and schedule of evaluation agreed to in the assistance
agreement*
FEATURES
o States are responsible for notifying EPA in a timely manner of
problems they experience in trying to accomplish their outputs.
Likewise, EPA is responsible for promptly notifying States of
its inability to supply promised support.
o Formal and informal evaluations by EPA should be constructive*
conducted in the spirit of promoting good performance through
problem-solving, not fault-finding.
o EPA1s review and evaluation should emphasise overall performance
within each program* concentrating on the composite picture
revealed by total outputs and the quality of accomplishments*
o EPA should focus on a State's performance against work program
outputs and conditions unless other aspects of a State's program
(procedures* processes* other activities) must be examined to
analyze a problem or find its appropriate solution.
o Formal review of State performance under the assistance agreement
will entail* at a minimum* one on-site annual evaluation of each
assistance agreement.
o Review and evaluation of assistance agreements should be con-
ducted by skilled* experienced EPA evaluators.
o Oversight findings* successes as well as problems* should be
documented to establish an accurate record of State performance
over time.
.o Assistance oversight should use existing reporting and evaluation
mechanisms to the extent possible.
CONSEQUENCES Or 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 uncovered problems* and the imposi-
tion of sanctions to address persistent* serious performance prob-
lems.
-------
-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 issue 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 the most effective incentives at CPA's disposal.
Publicizing accomplishments also benefits States with per-
formance problems by providing them with models for success.
o In general* when a State demonstrates steady progress or
a sustained level of high performance against negotiated
commitments, EPA will institute the most appropriate rewards
for achievement and incentives to promote continued success.
Possible actions include but are not limited tot
- Reducing the number* level* scope and/or
frequency of reviews, reporting* or in-
spections to the minimum necessary for
effective national program management!
- Increasing State flexibility in using funds
for special projects or State priorities!
- Offering financial incentives (within existing
resources)* such as supplemental funding!
-------
-8-
- Publicising program successes through joint
media presentations* awards, special letters
of commendation to the Governor, or technology
transfer to other States, EPA Regions and
Headquarters.
CORRECTIVE ACTIONS
o When oversight review uncovers a performance problem and
determines its cause* EPA and the State must act on those
findings by taking appropriate corrective steps.
o Regions must initiate discussions with those States where
problems have emerged* and work cooperatively with them to
establish effective remedial strategies. This negotiated
strategy should specify the tine frame during which EPA will
expect the problem to be resolved* and any interim milestones
that will be necessary to monitor State progress.
o Regions and States should follow a corrective action strat-
egy based on ,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 problems.
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 If a Region is not able to provide a particular essential
lyte of specialixed assistance to a State* the Reqion should
bring this corrective action requirement to the attention
of Headquarters program managers for action as appropriate.
o The intent of this policy is to see that EPA assumes a
constructive approach in responding to State performance
problems. When corrective actions have failed* or EPA and
a State cannot agree on a corrective action* the Region
may consider imposing a sanction* If a sanction is contem-
plated* the performance issue should be escalated to the
highest appropriate level of EPA and the State. The follow-
ing sequence should be observed whenever possible to ensure
that significant problems receive prompt attention and are
solved expeditiouslys
a. The Regional Division Director responsible for
managing the assistance agreement will raise the
issue to the attention of the Deputy Regional
Admininstrator or Regional Administrator and advise
his/her State counterpart of this notification.
-------
-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 recognize that national re-
sponsibility for any State environmental program continues
after the imposition of a sanction. They should make ar-
rangements for completion of crucial outstanding outputs
and should take steps to promote and sustain activities
the State is performing effectively.
o As with corrective actions* any decision to impose a
sanction must be based on EPA's particular experience
with any given State. The Regional Administrator is
responsible for determining when a problem may be signif-
icant enough to warrant such action* and for determining
the appropriate type of sanction to apply.
o Current regulations detail those sanctions traditionally
available to 8.PA. They includes step-work actions*
withholding payment* suspension or termination of agree-
ment for cause* agreement annulment, and other appropriate
judicial or administrative actions.
o Adjusting the schedule for award or payment of assistance
funds to quarterly, semi-annual, or other similar restrictive
disbursement schedules is considered a sanction under the
terms of this policy. (The customary mechanisms for the
release of funds, such as standard letter of credit
procedures, are not affected by this policy.)
o 40 CPR Part 30 Subpart L details formal procedures for
resolving EPA/State disputes concerning assistance
agreements. These procedures provide the opportunity
for a State to document the grounds for any objections
to the imposition of a sanction and for EPA to review
its decision and address the State's objections on the
basis of a written record.
-------
Policy on Performance-Based Assistance
Question and Answer Package
PURPOSE
1. What is the purpose of this policy?
This policy lays out a framework for managing EPA's
assistance to States for continuing environmental programs.
It ties performance against negotiated work program outputs to
federal financial assistance funds. It provides a consistent
approach for managing assistance programs through negotiating
work outputsr overseeing States' performance against agreed
upon commitments, solving problems through corrective action
strategies, and imposing sanctions when corrective actions
have failed or EPA and a State cannot agree on a corrective
action strategy.
Although the policy aims for a consistent approach toward
managing assistance agreements, it provides Regional managers
with flexibility to use their best judgment in applying the
provisions of this policy to specific conditions that exist
within their Regions and among programs.
TIMING
2. How will this policy affect PY'86 assistance agreements?
Any PY'86 assistance agreement negotiated after the
issuance of this policy will be expected to conform to
all of its provisions.
•
Assistance agreements for PY'86 agreed upon prior to
the issuance of the Policy on Performance-Based Assistance
will not have to be renegotiated. However, EPA's Regions
will be expected to manage those assistance agreements
according to the approach outlined in the "Oversight* and
•Consequences of Oversight" sections of the policy.
PY'86 assistance agreements may be amended if a Region
and State both agree to do so, under the terms of governing
regulations.
All assistance agreements for PY'87 will be negotiated
and managed according to this policy.
PRIORITIES
3. Why should EPA assistance support soae State prioritiee
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
-------
-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. Row is the proper balance 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 commitments.
-------
-3-
ESCALATXON
6. What is the purpose of the escalation sequence outlined in
the policy?
The Policy on Performance-Based Assistance establishes
a problem-solving approach toward managing CPA assistance to
States. It haa been designed to promote the prompt identi-
fication and resolution of any problems States encounter in
trying to fulfill the output commitments they agree to meet.
The purpose in laying out a process by which issues can be
surfaced quickly up the chain of command in both Regions and
States is to ensure that significant problems receive the
prompt attention of managers capable of solving those problems
expeditiously. This sequence was included in the policy to
address concern that State performance problems too frequently
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
-------
-4-
States to plan their programs, which are generally based on
a yearly cycle. The Taak Force felt that this type of action
would signify a lack of faith in a State's ability to perform.
Consequently, the Task Force viewed this type of action as a
sanction which would reflect a State's inability to perform.
As with other sanctions, quarterly disbursement schedules,
should not be imposed before attempting to resolve the problem
through more cooperative efforts (corrective actions) or after
a demonstration of continued past performance problems by a
State. Aa 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. Under 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 from the Department
of the Treasury any sooner than absolutely necessary.
(Payment procedures are described*in the Assistance Admini-
stration Manual, 12/3/84, Chapter 33.) However, to the
extent that Regions impose performance-related restrictions
on letter of cr<*Ut or other payment 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 State, but it
-------
-5-
11. What does this policy imply for withholding funds for
problems that are not directly related to a State's perfor-
mance of negotiated outputs under the assistance agreement?
This policy relates primarily to a State's performance
of negotiated outputs under an assistance agreement. The
decision to withhold funds from a State for output-related
problems is a sanction which should be preceded by appropriate
corrective actions and notification of high-level managers.
However* funds are sometimes withheld for problems not directly
related to a State's accomplishment of negotiated outputs
under an assistance agreement. This may occur as a result
of problems with a State's financial reporting and accounting
system. For problems resulting from improper fiscal manage-
ment or administrative practice (but not directly related to
a State's performance on work outputs)* the Regions may with-
hold funds in accordance with governing regulations.
OTHER QUESTIONS AND ANSWERS
12. Do assistance administration procedures need to be changed?
No. The policy was developed carefully so as not to
conflict with the Agency's existing procedures for managing
assistance agreements. Procedural details for administration
are provided in the current (12/3/84) Assistance Administration
Manual and they are consistent with the policy.
13. Why does the policy encourage the submission of comprehensive
State work plans but not require them?
The current policy is consistent with existing regulations
for State and Local Assistance (40 CPR Part 35, Subpart A).
The policy encourages but does not require States to volunteer
a comprehensive work program that indicates all activities
the State is conducting under its environmental program.
14. Why does this policy call for a mutually acceptable evaluation
plan?
The policy calls for EPA's evaluation of State performance
to be described in a plan that is mutually acceptable to EPA
and the State before the assistance agreement is finalised*
This is consistent with the regulation which calls for the
Regional Administrator to develop an evaluation plan in consul-
tation with the State, and it reflects the principles of EPA's
Policy on Oversight of Delegated Programs. Onder the policy,
changes to the original evaluation plan could occur as corr-
ective actions.
-------
-6-
15. How can the assistance agreement be amended?
Both the policy and the regulation allow for the assist-
anee agreenent to be aaended 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 s timely
and appropriate manner.
17. Why doesn't the policy deal with the "quality* of outputs?
While this Policy on Psrformance-Based Assistance
focuses on State performance against measureable outputs*
it complements and is in complete conformance with BPA's
Policy on Oversight of Delegated Programs, which calls for
review and evaluation activities which ensure Quality
State programs. Host 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 *a part of a comprehensive examination
of State program performance.
18. Hew <*.u State output comitments relate (.0 SPMS commitments?
EPA should always discuss with States any State
commitments to be included in EPA's Strategic 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
undsr a performance-based systsm, it would be unfair to hold
States accountable for SPMS measures they were not aware of
or did not accept.
-------
APPENDIX E
POLLUTION
PREVENTION
GUIDANCE
-------
11/18/92 11-54 ©2f>2 252 nS16
OCLA/OLA
— EPA/GAP
Ig|nn2
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
NOV I 2 1932
THEADMWCTW
TOR
MKMORMTOUM
SUBJECT:
JTKOH:
zo:
state Grants Guidance: integration of Pollution
Prevention
r. Henry Habicht ITU5
Deputy Administrator
Assistant Administrators
Regiono.1 Administrators
Attached is the new Agency-wide Guid«uiu« iivjuipurating
pollution prevention into EPA'e media grant programs, beginning
in FY'94. This Guidance builds on the Agency's pollution
prevention commitment, already reflected in many exciting
activities throughout our programs and in the States.
X vant 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 IRSR pr-Rsnriptiwe in
tone.
With this Guidance in hand, the Agency r«r» now movR jqin'clcly
to develop specific Guidance documents for our individual media.
grant programs in concert with our State partners.
Attachment
Printed on Recycle
-------
11/18/92 11:54 ®202 252 0518 OCLA/OLA DIV -,-,., EPA/GAD ®003
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
NOV I 2 1892
KEMORMIDPK
SUBJECT: state Grants Guidance: Integration of Pollution
Prevention
FROM: F. Henry Habicht
Deputy Administrator
TO: Assistant Administrators
Regional Administrators
This memorandum announces the Agency-vide 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
-------
11/18/92 11:55 ®202 252 0516 OCLA/OLA DIV -»-»-» EPA/GAD ©004
In genera.!, this Guidance applies to all of the Agency's
media-specific State grant programs, but particularly to the
following: Clean Air Act §105—Air Pollution Planning and
Control; Resource Conservation and Recovery Act §3011—Hazardous
Waste; Federal Insecticide. Fungicide, and Rodenticide Act
§23(a)(1)—Pesticides; Toxic Substances Control Act §28--;
Enforcement and Enforcement Activities under §313 of the
Emergency Planning and Community Right-to-Know Act; and Clean
Hater Act §106—Surface Water, § 104(b) (3)—Wetlands and Water
Quality Management, and §319 (h)—Non-Point Source Management.
Building on the Agency's many successful 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 Commitjtee.
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 belov should help guide
development of EPA/State workplans. These should be reflected in
program-specific Guidance, weighed in workplan 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 flexibilityj 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 Kay 28, 1992 (attached)—is EPAJ'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
-------
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 incorporates 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 may serve
nationally as innovative models for other state or local
programs. Workplans also should encourage innovative approaches
already developed by other State or local programs, and improve
coordination to build on existing successes.
9) The workplan structures grant output information so 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 take into account other factors
that nay be important. Regional Offices and States may identify
-------
11/1B/H2 li:5B M'202 252 0516 OCLA'OLA DIV -.-.-» EPA/GAD ©006
4
additional Principles -to guide workplan requirements.
Many Regional Offices already have made adjustments to
accommodate flexibility needs. The purpose of this Guidance is
to encourage such flexibility. Whenever possible, workplans
should accommodate State flexibility needs associated witA
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 example, (1) 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 jnow 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 jyears)
of grant program monies—RCRA, air, and water—for pollution
prevention, to be coordinated by the pollution prevention
office. The monies will be reflected in specific activities
reasonably related to each program's contribution and
statutory objectives. The annual EPA/State Agreement! will
explicitly identify pollution prevention activities and
specific disinvestments in each program.
d) Adjustments in traditional or administrative procedures
or schedules to ease EPA/State interaction.
To allow EPA to evaluate progress In integrating pollution
prevention into State grant programs, each Regional Office should
-------
li/18/92 11:56 ©2022520516 OCLA/OLA DIV ~« EPA/GAD 0007
provide an annual report summarizing pollution prevention
accomplishments (e.g. activities, products/ approaches, ejtc.),
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 tojmaking
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
-------
OCT (j 9 OQ
MEMORANDUM
SUBJECT: Comments on Draft FY94 State Grant Guidance Integrating
Pollution Prevention
FROM: Harvey G. Pippen, Jr., Director
Grants Administration Division
TO: Kate Perry
Pollution Prevention Policy staff
We have reviewed the draft FY94 Guidance and offer the
following comments:
1. Page 1. The second paragraph identifies the major grant
programs offering the greatest potential for incorporating
Pollution Prevention (P2). However, the list excludes several
significant water programs such as Section 106, Water
Pollution Control under the Clean Water Act, and Sections
1443(a) and 1451(a)(3), Public Water System Supervision under
the Safe Drinking Water Act. We suggest you include the
appropriate water programs before issuing the final guidance.
2. Page 2 includes a reference to EPA's definition of P2 as
stated in various Agency documents, yet the guidance itself
includes no such definition. Therefore, we suggest you
include the definition of P2 in the guidance—perhaps
somewhere in the beginning.
3. Page 4 under "Flexibility", we suggest you delete paragraph
c. concerning adjustments in funding allocations for P2.
Adjustments may be done within a specific media but not
across media lines to fund a multi-media program. EPA does
not have authority to fund Cross Media grants for P2. Cross
Media authority can only be used with Congressional approval
or through the use of a demonstration grant. Demonstration
grants are by their very nature, however, few in number and
for short periods of time. Therefore, to cite Region X as an
example for broad use at this point would be inappropriate.
Moreover, the Alaska example cited in the guidance, in the
absence of additional information, appears to be illegal.
4. Finally, due to the extensive impact of this guidance, we
suggest you obtain sign-offs from all affected EPA Offices,
i.e., OGC, Budget, Program, and Grants, before issuing it in
final.
-------
We appreciate the opportunity of working with you and the P2
workgroup in developing this guidance. Please contact Vince Martin
on 260-9294 or Maureen Ross on 260-9297 if you would like to
discuss our comments further.
cc: Official G. Katz S. McMoran
Reading B. Feldman C. Allison
Division R. Johnson M. Ross
V. Martin H. Corcoran
PM-216F: V.Martin:RM 801 FC:260-9294:10/9/92
-------
APPENDIX F
CONTENTS OF
OFFICIAL FILE
-------
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
-------
2) Correspondence concerning negotiations and agreements
'3) Recipient requests for deviation; EPA approval or denial
4) Correspondence concerning continuation or renewal of
project
5) Site visit reports
6) Administrative reports
7) Stop-work order and related correspondence
8) Correspondence concerning termination actions
9) Correspondence concerning disputes and appeals
10) Final determinations
11) Audit reports
12) Regional and General Counsel opinions
13) End of year evaluation
PartV
1) Reimbursement requests (copy)
2) Payment vouchers (copy)
3) Financial Status Reports (copy)
4) Automated Clearinghouse Authorization (copy)
5) Increase and decrease amendments (copy).
6) Close-out checklist/memo (copy)
7) Commitment Notices (copy)
Part VI
Technical Reports - if the report is too bulky, place it in an accordian file
and rubber band it to the six part file. If it is a film, computerized disk, etc., a document
spelling out its location must be filed in this section.
-------
OFFICIAL EPA GMO FILE
Official EPA GMO File: The official file developed and maintained by the Grants
Management Office to serve as a composite collection of documents and or items that
provide programmatic and fiscal information on the purpose, performance and history
of an award to a specific recipient.
Contents:
Parti
1) Complete application and any application amendments (original
signed)
2) Administrative Review Checklist (original signed by Grants Specialist
and the Project Officer).
3) Procurement System Certification (original signed)
4) Governor's letter and certification for Superfund enforcement.
5) Anti-Lobbying Certification (original signed)
6) Debarment/Suspension Certification (original signed)
Part II
1) Correspondence relating to the application (copy)
2) Applciation reviews, in-house and extramural (copy)
3) Programmatic reviews (copy)
4) Program memo regarding funding recommendation (copy)
Part III
Assistance Agreements and any amendments (a copy of agreement
should be retained until a signed original is returned by the
recipient)
-------
Part IV
1) Correspondence relating to the awards
A. Award letter
B. Acceptance letter
C. Interim close-out letter
D. Close-out letter
2) Correspondence concerning negotiations and agreements
3) Recipient requests for deviation; EPA approval or denial
4) Correspondence concerning continuation or renewal of project
5) Site visit reports
6) Administrative reports
7) Stop-work order and related correspondence
8) Correspondence concerning termination actions
9) Correspondence concerning disputes and appeals
10) Final determinations
11) Annulment
12) Requests for audit
13) Audit reports
14) Correspondence related to audit reports and resolution of audit
findings
15) Regional and General Counsel opinions
16) Interim and final audit reports, comments and resolution
17) Final disputes decision and any appeal or reconsideration
determination/resolution documents
PartV
1) Reimbursement requests
-------
2) Payment vouchers
3) Financial Status Reports
4) Automated Clearinghouse Authorization (ACH)
5) Increases and decreases
6) Close-out check list
7) Commitment Notices
Part VI
Funding recap
-------
APPENDIX G
APPLICATION
FACE PAGE
-------
APPLICATION FOR
FEDERAL ASSISTANCE
OMB Approval No 0348-0043
2 DATE SUBMITTED
6/19/91
Applicant Identifier
t TYPE OF SUBMISSION
Application
C3 Construction
Preapplication
O Construction
3 DATE RECEIVED BY STATE
Slate Application identifier
(PENDING)
4 DATE RECEIVED BY FEDERAL AGENCY
Non-Construction C3 Non-Construction
6/25/91
Federal Identifier
C9 994079-92-0
S APPLICANT INFORMATION
Legal Name
GA. DEPT OF NATURAL RESOURCES
•AL PROTECTION DEYISION
Address (give city county slate and zip code)
205 Butler Street, S.E.
Atlanta, GA 30334
Name and telephone number of the person to be contacted on matters involving
this application (give area code)
Harold F. Rebels/ Project Manager
(404) 658-4713
C EMPLOYER IDENTIFICATION NUMBER (EIN|
8
I TYPE OF APPLICATION
New
Continuation
Revision
If Revision enter appropriate letter(s) in box(es)
A Increase Award B Decrease Award
0 Decrease Duration Other (specify)
I I
C Increase Duration
7 TYPE OF APPLICANT (enter appropriate letter in bo*) \ fl
A State H independent School Disi
B County I State Controlled Institution of Higher Learning
C Municipal J Private University
D Township K Indian Tribe
E interstate L individual
F Intermunicipal M Profit Organisation
G Special District N Other (Specify)
9 NAME OF FEDERAL AGENCY
U.S. Environmental Protection Agency
10 CATALOG OF FEDERAL DOMESTIC
ASSISTANCE NUMBER
TITLE
6
11 DESCRIPTIVE TITLE OF APPLICANT'S PROJECT
Water Quality NFS Implementation, Sec.319(h)
Non-point Source Implementation
12 AREAS AFFECTED BY PROJECT (cities, counties. Slates etc )
All
13 PROPOSED PROJECT
14 CONGRESSIONAL DISTRICTS OF
Start Date
8/1/92
Ending Date
9/30/96
a Applicant
FULTON
b Protect
ALL
is ESTIMATED FUNDING
a Federal
b Applicant
c State
d Local
e Other
890,004 oo
272,469 oo
124,699 oo
00
255,599 oo
16 IS APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER 121/2 PROCESS?
a YES THIS PREAPPLICAT1ON/APPLICATION WAS MADE AVAILABLE TO THE
STVTE EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON
DATE
4/1/91
b NO Q PROGRAM IS NOT COVERED BY E O 12372
Q OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW
' Program Income
00
g TOTAL
1,542,771
oo
17 IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT?
n Yes If 'Yes.' attach an explanation
NO
II TO THE BEST OF MY KNOWLEDGE AND BELIEF ALL DATA IN THIS APPLICATION/PREAPPLICATION ARE TRUE AND CORRECT. THE DOCUMENT HAS BEEN DULY
AUTHORIZED BY THE GOVERNING BODY OF THE APPLICANT AND THE APPLICANT WILL COMPLY WITH THE ATTACHED ASSURANCES IF THE ASSISTANCE is AWARDED
Typed Name ot Authorised Representative
Alonzo G. Fish
b T,tie
Deputy Director
e Daie Signed
6/19/91
Previous Editions Not Usable
Standard corm 124 REV t 88:
P-escnoed by OMB i_ r. „ 3- A nj^
-------
INSTRUCTIONS FOR THE SF 424
ThU is a standard form used by applicants as a required facesheet for preapplications and apphcatiir.c submitted
for Federal assistance It will be used by Federal agencies to obtain applicant certification that States which have
established a review and comment procedure in response to Executive Order 12372 and have selected the program
to be included in their process, have been given an opportunity to review the applicant's submission
Item
Entrv
1 Self-explanatory
2 Date application submitted to Federal agency (or
State if applicable) & applicant's control number
(if applicable)
3 State use only (if applicable)
4 If this application is to continue or revise an
existing award, enter present Federal identifier
number If for a new project, leave blank
5 Legal name of applicant, name of primary
organizational unit which will undertake the
assistance activity, complete address of the
applicant, and name and telephone number of the
person to contact on matters related to this
application
6 Enter Employer Identification Number (EIN) as
assigned by the Internal Revenue Service
7 Enter the appropriate letter in the space
provided
8 Check appropriate box and enter appropriate
letter(s) in the space(s) provided
— "New" means a new assistance award
— "Continuation" means an extension for an
additional funding/budget period for a project
with a projected completion date
— "Revision" means any change in the Federal
Government's financial obligation or
contingent liability from an existing
obligation
9 Name of Federal agency from which assistance is
being requested with this application
10 Use the Catalog of Federal Domestic Assistance
number and title of the program under which
assistance is requested
11 Enter a brief descriptive title of the project if
more than one program is involved, you should
append an explanation on a separate sheet If
appropriate (e g , construction or real property
projects), attach a map showing project location
For preapplications, use a separate sheet to
provide a summary description of this project
Item Entrv
12 List only the largest political entities affected
(e g , State, counties, cities)
13 Self-explanatory
14 List the applicant's Congressional District and
any Districts) affected by the program or project
15 Amount requested or to be contributed during
the first funding/budget period by e net-
contributor Value of in-kind contributors
should be included on appropriate lines a-
applicable If the action will result in a dollar
change to an existing award, indicate on/> the
amount of the change For decreases, enclose the
amounts in parentheses If both basic and
supplemental amounts are included, show
breakdown on an attached sheet For multiple
program funding, use totals and show breakdown
using same categories as item 15
16 Applicants should contact the State Single Pom
of Contact (SPOC) for Federal Executive Order
12372 to determine whether the application is
subject to the State intergovernmental review
process
17 This question applies to the applicant organi
zation, not the person who signs as the
authorized representative Categories of debt
include delinquent audit disallowances, loans
and taxes
18 To be signed by the authorized representative of
the applicant A copy of the governing bodv's
authorization for you to sign this application as
official representative must be on file in the
applicant's office (Certain Federal agencies ma>
require that this authorization be submitted as
part of the application )
SF 424
4 iJS 5,,
-------
APPENDIX H
COMMITMENT NOTICE
-------
EXHIBIT C
COMMITMENT NOTICE
•£: Preparation and approval of this form does not constitute an obligation of money. The use of this form is intended to guarantee
Ability of money by reserving it for certain types of specified transactions.
* COMMITMENT TRANSACTION IN THE AMOUNT OF 8 1.349.000.00 IS FOR:
.
-------
COMMITMENT NOTICE
EXHIBIT C
(CONTINUED)
NOTE: Preparation and approval of this form does not constitute an obligation of money. The use of this form is intended to guaran'
availability of money by reserving it for certain types of specified transactions.
THIS COMMITMENT TRANSACTION IN THE AMOUNT OF S 1 ,666.941 .00 IS FOR
WHOLE DOLLARS
| | GRANT (Number ) \ \ «. PURCH A»E RE OUI1ITION | | A CONTRACT
ttpeciryj COOPERATIVE AGREEMENT NO. L-006513-90-0
DESCRIPTION OF PROJECT. GOODS. OR SERVICES
FYSO NEW MEXICO STATE L.U.S.T. TRUST FUND PROJECT
NAME OF GRANTEE/CONTR ACTOR'VENDOR
NEW MEXICO HEALTH t ENV. DEPT.
EMPLOYER IDENT. NO. (EIN)
85-600-0565-A1
TASK. ROAP. OR OTHER LOCAL IDENTIFIER
SPECIAL COMMENTS OR INSTRUCTIONS
ALLOWANCE HOLDER APPROVALS (Optional, at discretion of Allowance Holder)
ALLOWANCE HOLDER TITLE
HAZARDOUS WASTE MANAGEMENT DIVISION
STAFF APPROVALS
SIGNATURE
DATE
PHONE
PROJECT OFFICER 6HA
X6755
BRANCH CHIEF
6HA
X6755
DIRECTOR HWM DIV 6H
X67OQ
RESPONSIBILITY CENTER TITLE
GRANTS 6 AUDITS SECTION 6MAG
FUNDS CERTIFICATION
PREPARED BY
APPROVED BY
SIGNATURE
ADMINISTRATIVE
OFFICER 6H
SIGNATURE
(&ig nature.)
BUDGFT ANAI YST
FOR RESPONSIBILITY CENTER USE ONLY
Contract negotiator is | | is not [_XJ authorized to exceed amount shown above by up to 10% without securing further approval for funds.
r
E AMOVNT OF MONEY SHOWN IS
ABORIGINAL COMMITMENT
DAN INCREASE TO A
PREVIOUS COMMITMENT
I 1 A DECREASE TO A
I "
PREVIOUS COMMI TM EN T
FINANCIAL DATA fSee instructions on reverse before tilling outj
APPROPRIATION- 68/20X8153
DOCUMENT
CONTROL NO
P.E.i FPYV2B
ACCOUNT NUMBER
OBJECT
CLASS
DOLLAR AMOUNT
1 2 3
10
11
12
13
14
15
16
17
18
19
20
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
EPA Form 2550-9 (B.-
PREVIOUS EDITION IS OBSOLETE
-------
EXHIBIT C (CONTINUED)
COMMITMENT NOTICE INSTRUCTIONS
1. COMPLETE ALL BLOCKS COMPLETED IN THE SAMPLES
2. GRANT/COOPERATIVE AGREEMENT OR IAG NUMBERS WILL HAVE BEEN ASSIGNED
BY GRANTS SECTION PRIOR TO THE TIME YOU WILL BE PREPARING THE COMMITMENT
NOTICE
3. EMPLOYER IDENTIFICATION NUMBERS (EINs) SHOULD BE ON THE APPLICATION (ALSO
SEE LETTER OF CREDIT & EIN LISTING FOLLOWING 'EXHIBITS'
4. THE APPROPRIATION AND PROGRAM ELEMENT (PE) NUMBERS ARE AVAILABLE FROM
GRANTS & AUDITS SECTION, BUDGET SECTION. OR YOUR ADMINISTRATIVE OFFICER
5. UNDER FINANCIAL DATA. LEAVE COLUMNS 1 - 14 BLANK
#15 WILL BE 'R1 FOR GRANTS RESPONSIBILITY CENTER (EXCEPT SUPERFUND)
#16 WILL BE THE FIRST LETTER OF THE GRANT NUMBER. E.G.:
I = WATER 106 PROGRAM (See 'DCN Prefixes'
D = RCRA on next page)
A = AIR 105 PROGRAM
#17 - #20 WILL BE COMPLETED BY BUDGET SECTION. FINANCE BRANCH WHEN
PACKAGE IS ROUTED THROUGH THE SECTION ON THE WAY TO GRANTS & AUDITS
*#31 = 0 FOR FY90 FUNDS, 1 FOR FY91 FUNDS, 2 FOR FY92 FUNDS. ETC.
*#32 - #34 = FIRST THREE LETTERS OF PROGRAM ELEMENT
*#35 - #36 = 06 FOR REGION 6
*#37 - #38 = FOR OTHER THAN SUPERFUND & LUST THIS IS USUALLY RO
*#39 IS USUALLY 0. BUT MAY BE A NUMBER OR ALPHA FOR SPECIAL IDENTIFICATION
*#40 GENERALLY IDENTIFIES THE STATE. E.G.
1 = ARKANSAS }
2 = LOUISIANA } NOT REQUIRED
3 = NEW MEXICO }
4 = OKLAHOMA } THIS SCHEME IS OPTIONAL
5 = TEXAS }
#41 - #44 = OBJECT CLASS OF THE GRANT PROGRAM. SEE LISTING FOLLOWING
'EXHIBITS'
#45 - #54 = EXACT EVEN DOLLAR AMOUNT TO BE COMMITED
#55 - #56 ALREADY HAVE $.00 AS COMMITMENTS ARE ALWAYS IN EVEN DOLLARS
«
Account numbers must be established before a DCN can be assigned. Account
numbers for Annual Continuing Environmental Programs are 'automatically"
established by the Finance Branch each year by changing the initial number to
reflect the current fiscal year. Other account numbers must be established. These
numbers are established upon request. Account numbers must be established more
than 24 hours prior to assignment of a DCN to that account number since the
in/ormation is input in JFMS and must be verified in the update before a DCN can
be assigned.
-------
GRANT PROGRAM DCN PREFIXES
FY90 - REGION 6
EXHIBIT C
(CONTTINUED)
PROGRAM NAME
AWARD AUTHORITY
PREFIX
AIR POLLUTION CONTROL
WATER POLLUTION CONTROL
ESTUARY
TRAINING:
WWT FACILITY OPERATOR
SOLID WASTE TRAINING
HAZARDOUS WASTE CONTROL
UNDERGROUND STORAGE TANKS (USD
LEAKING UNDERGRND STORAGE TANKS (LUST)
DEMONSTRATION:
CLEAN LAKES
WELLHEAD PROTECTION
SPECIAL STUDIES & INVESTIGATIONS:
WATER
ASBESTOS & PCBs
SMALL QUANTITY GENERATORS
HAZARDOUS WASTES
DRINKING WATER
LAND BAN PETITION
PESTICIDES:
ENFORCEMENT
APPLICATOR CERTIFICATION
PUBLIC WATER SYSTEMS:
SUPERVISION
DIRECT IMPLEMENTATION
DEVELOPMENT
UNDERGRND WATER SOURCE PROTECTN (UIC)
(FORMERLY UNDERGRND INJECTN CONTROL)
TOXICS:
ASBESTOS & OTHERS (to states
for establishment & operation)
ASBESTOS ABATEMENT STATE PILOT
SPECIAL PURPOSE CONSOLIDATED
CAA. SECTION 105 RA
CWA, SECTION 106 Rl
CWA. SECTION 320 RC
CWA. SECTION 104(g)(l) RT
RCRA. AS AMENDED. SECTION 7X7 RT
RCRA. AS AMENDED. SECTION 3011 RD
RCRA. AS AMENDED, SECTION 2007 RL
SARA (SUPERFUND). SECTION 522 &
RCRA. AS AMENDED. SECTION 9003 (h)(7) RL
CWA. SECTION 314 RS
CWA, SECTION 104(bX3) RS
CWA, SECTION 104(bX3) RX
TSCA, SECTION 26 RX
RCRA. AS AMENDED. SECTION 6001 RX
RCRA. AS AMENDED. SECTION 8X1 RX
SDWA. SECTION 1442(bX3)(c) RX
RCRA. AS AMENDED. SECTION 8X1 RX
FIFRA, SECTION 23(a)(l) RE
FIFRA, SECTION 23(a)(2) RE
SDWA. SECTION 1443(a) RF
SDWA. SECTION 1442(b)(3)(c) RH
SDWA. SECTION 1442(bX3)(c) RH
SDWA. SECTION 1443(b) RG
TSCA. SECTION 28 RJ
TSCA. SECTION 10 RJ
VARIOUS STATUTES. AS APPLICABLE RY
DCN
CAA
CWA
RCRA
FIFRA
SARA
TSCA
SDWA
DOCUMENT CONTROL NUMBER
CLEAN AIR ACT
CLEAN WATER ACT
RESOURCE CONSERVATION & RECOVERY ACT
FEDERAL INSECTICIDE, FUNGICIDE, & RODENTICIDE ACT
SUPERFUND AMENDMENTS & REAUTHORIZATION ACT OF 1986
TOXIC SUBSTANCES CONTROL ACT
SAFE DRINKING WATER ACT
-------
APPENDIX I
DECISION
MEMORANDUM
-------
EXHIBIT A
Ti
» UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 6
1445 ROSS AVENUE SUITE 1200
DALLAS TEXAS 75202-2733
June 1, 1990
DECISION MEMORANDUM
Subject: Award of Funds Under a Cooperative Agreement with Texas Water
Commission CA# X-006999-90-0
From: Horace T. Zither, Project Officer
Water Quality Program Section (6WQS)
To: Linda N. Thompson, Chief
Grants and Audits Section (6MAG)
Attention: Jerri Englerth, Grants Specialist
PROGRAM
Pollution Prevention Control - Wetlands Conservation
TITLE
Methodology for Conservation of Texas Gulf Coast Wetlands
OBJECTIVE
Study of methodology to preserve and protect the continually eroding wetlands on
the Texas coast. The Texas Water Commission will work with business and industry
to identify technical and regulatory barriers to pollution prevention and waste
minimization programs. Additionally, the TWC will work with the Region 6 Office
to develop public information and training video tapes to promote the concepts of
pollution prevention and recycling and to depict the consequences of the loss of State
Wetlands.
Specific Objectives: (optional)
-------
EXHIBIT A (CONTINUED)
Page 2 of 2
DECISION MEMORANDUM: Pollution Prevention Control - Texas Wetlands
June 1, 1990
REVIEWS
The workplan has been reviewed and approved by the Water Quality Program
Section, and , which
have determined that:
• the proposal does not duplicate current EPA Regional projects or
activities
• the quality of science in this proposal is adequate; and
• the protocols in the proposal are consistent with those established by
EPA, the Pollution Prevention Office, the Office of Water, and Region
6.
MATCHING FUNDS REQUIREMENT
Policy Guidance for this project requires a twenty-five percent (25%) match of the
total project costs. Matching funds will be provided by the applicant, Texas Water
Commission. This commitment is documented in the application.
AWARD AUTHORITY
This Cooperative Agreement will be awarded under Section 104(b)(3) of the Clean
Water Act, as amended by the Water Quality Act of 1987.
FUNDING
Funding for this project will be $150,000 of Federal funds with $50,000 in State
matching funds.
ATTACHMENTS
• Funding Order, EPA Form 5700-14
• Commitment Notice, EPA Form 2550-9
• Listing of Programmatic Special Conditions
-------
EXHIBIT A (CONTINUED)
Attachment 3
Programmatic Conditions for Texas Wetlands CA #X-006999-90-0
• Standard QA condition
• Quarterly Progress Reports (format to be agreed upon between EPA
Project Officer and TWC Project Manager).
• No funds may be withdrawn from the Letter of Credit until the
Quarterly Reporting Format has been agreed upon.
• Standard Administrative conditions re: letter of credit, FSRs, audit, access
to facilities, etc.
If you have questions, please contact me at 5-6100.
-------
APPENDIX J
POLICY ON "ORPHAN
GRANTS"
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
DEC - 3 1992
OFF ICE OF
ADMINISTRATION
AND RESOURCES
MANAGEMENT
MEMORANDUM
SUBJECT: "Orp
FROM: Bruo:e Feldman, Chief
Grants Policy and Procedures Branch
TO: "Orphan" Grant Workgroup
Attached is the final draft of the Policy and Procedures for
Funding Assistance Agreements. This draft incorporates all
comments received from workgroup participants after the last
videoconference in August. In addition, Office of General Counsel
(OGC) reviewed the document in October and provided us with their
recommended changes.
The most notable changes in this final draft from the previous
drafts you have reviewed are:
1. Introduction\Purpose has been shortened and made more
succinct.
2. The three policy concerns have been reordered with
Planning and Communication coming first.
3. Upon OGC's advice, the Distinguishing Acquisition from
Assistance Section has been reworded to more accurately
reflect the meaning of the Grant and Cooperative
Agreement Act of 1977.
4. A definition for Award Official has been added.
5. On Page 7, an additional procedure for referring legal
questions regarding eligibility has been added to both
the Program Office and Grants Management Office
responsibilities.
6. On Page 8, the Assistance vs. Acquisition
responsibilities have been shortened and, upon OGC's
review, more accurately reflect the meaning of the Grant
and Cooperative Agreement Act of 1977. The procedures
stated in this section reflect current practices in this
area.
Printed on Recycled Paper
-------
7. The Assistance Administrative Summary Sheet has been
finalized and included.
We are not requesting comments on this final draft. However,
if, after reviewing it, you have comments you feel need to be
addressed, please call Ellen Haffa at 260-2795 or Bruce Feldman at
260-5268. Our next step is to brief the Grants Administration
Division Director and the Senior Budget Officers.
Attachment
-------
POLICY AND PROCEDURES FOR FUNDING ASSISTANCE AGREEMENTS
I. PURPOSE
The purpose of this policy is to establish consistent,
standard operating procedures for Regional and Headquarters Program
Offices and Grants Management Offices (GMOs) to follow in awarding
grants. While the policy and procedures address the funding process
for all grants and cooperative agreements, it focuses primarily on
new\unique 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
the fiscal year.
The Headquarters and Regional Program, Budget, and Grants
Management Offices are participants in this assistance funding
process. Close coordination between and understanding of roles and
responsibilities of these key participants is vital to making the
process work efficiently. The Program Office provides the funding
and is responsible for the programmatic and technical oversight of
the assistance process to ensure the purposes of the assistance
award are achieved in a timely and high quality manner. The Budget
Office maintains assistance funds availability through control of
advices of allowance and reprogrammings to the Agency's Operating
Plan. The GMOs assure the assistance application completeness by
performing and documenting an administrative and legal review of
the assistance application. To avoid an unmanageable assistance
award workload in the fourth quarter, there is a need for regular
communications and coordination of planning throughout the fiscal
year between these offices .
This policy addresses three concerns: (1) the need for
communication and early planning and scheduling for making awards,
(2) identifying appropriate program elements, statutory
authorities, and delegations for such awards, and (3)
distinguishing between acquisition and assistance.
II. POLICY
It is EPA policy to award assistance agreements that are
legal, administratively correct, and support the Agency's mission,
as quickly as possible after funds become available. In
furtherance of this policy, EPA establishes the following:
1. Planning and Communication. Good management practices
-------
dictate the need for strong communication and early planning. To
facilitate better planning, the Program Offices are encouraged to
establish an annual plan and schedule for awarding their assistance
agreements and to regularly communicate that plan and schedule to
the appropriate Budget and Grants Management Offices. To promote
earlier planning and increased communication, both Headquarters and
Regional Grants Management, Budget, and Program Offices should hold
periodic meetings, initiated by the GMOs, to reduce the impact
created by last-minute, fourth-quarter awards. These last-minute
awards are often due to late reprogramming of funds from
Headquarters to the Regions or to grants hastily awarded to avoid
having funds carried-over and reissued for a different purpose or
Office. The Program Office must recognize that the GMO needs at
least 60 days lead time (Superfund awards require 90 days) from
receipt of application to the award date to assure award of a grant
by the end of the fiscal year.
2. "rogram Element. Statutory Authority. Delegation of
Authority. The prcaram element, statutory authority, and
delegation of author!- are information required before EPA can
award a grant. They a_ ocume-.ted on the EPA Assistance Agreement
- EPA Form 5700-20A. -he 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. Distinguishing Acquisition from Assistance. The Federal
Grant and Cooperative r reement Act of 1977 distinguishes between
acquisition ontracts and assistance (grants or cooperative
agreements) .ationshi.-s, and mandates that Federal agencies use
contracts fc. Acquisition transactions. EP'- implements this act
through EPA Order 1000.19. The Act require Federal agencies to
use a contract to acquire property or services for the direct
benefit or use of the Federal government or whenever an agency
determines that a procurement contract is appropriate. Conversely,
the Act provides that an agency may use a grant or cooperative
agreement only when the principal purpo- of a project is to
transfer money, property, services, or -../thing ~f value to an
eligible entity to accomplish a public purpose of support or
stimulation authorized by Federal statute. (The level of Federal
involvement between the recipient and EPA during the performance of
the assistance activity determines when to use a grant agreement
versus a cooperative agreement. Where an agency will not be
substantially involved with a acipient during the performance of
an assistance agreement, a gra is the appropriate instrument. If
substan** Lai federal involvement is contemplated, the agency mus
select c. cooperative agreement.)
*
The Agency's Program and Administrative Offices must emphasize
-------
adherence to this statute when determining whether a project should
be awarded as assistance or acquisition. The Program Office must
review all contemplated projects as soon as possible to determine
whether the nature of the project activity is acquisition or
assistance. In instances when it is unclear whether a project
activity is acquisition or assistance/ the Program Office should
consult with the Grants Management Office. The Grants Management
Office, with the involvement of the Office of General
Counsel\Office of Regional Counsel, if necessary, will make the
final determination whether the project is acceptable as an
assistance project. In addition, the Program Office must allow for
the appropriate lead time needed to award the agreements. Under no
circumstances can assistance (grants and cooperative agreements) be
justified solely on the basis that the acquisition (contracts)
process normally requires a longer processing lead time than
assistance.
While the Act outlines the criteria for distinguishing between
assistance and acquisition relationships, it does not in itself
provide authority to award assistance agreements. Assistance
agreements may be. awarded only where specifically authorized by
EPA's organic statutes.
III. DEFINITIONS
1. Approval Official. The individual within the Program
having the responsibility and delegated authority for determining
whether to fund or reject an application on the basis of
technical\programmatic considerations. The Approval Official
communicates this funding decision to the Award Official through a
Decision Memorandum.
2. Award Official. The individual who signs the assistance
agreement ensuring that all technical, legal, and administrative
evaluations have been made and that the proposed agreement is
awardable. The Award Official for regionally administered programs
is either the Regional Administrator, the Assistant Regional
Administrator, or the Division Director, depending upon the region
or program. The Award Official for Headquarters is the Branch
Chief, Grants Operations Branch, Grants Administration Division,
Office of Administration and Resources Management.
2. Assistance Funding Process. The process by which
assistance funds are (1) planned in a Program Office's budget
request to OMB and Congress, (2) distributed during their operating
plan development, (3) received in an advice of allowance, (4)
committed in IFMS, and (5) ultimately routed to the appropriate
Grants Management Office for award.
3. Carry-over Funds. Funds that are: (1) not obligated by
the end of a fiscal year; and (2) may be obligated in the next
-------
fiscal year according to the terms of the appropriations
legislation that first made these funds available. (Ref.- EPA
Resources Management Directive System (RMDS) Chapter 2510)
4. Comptroller's Year-End Close-Out Procedures Guidance.
Each July, the Comptroller issues guidance entitled "FY 19— Year-
End Close-Out Procedures". This broadly distributed package
includes a schedule with cut-off dates for all end-of-year
activities associated with Budget, Finance, Procurement and
Contracts Management, and Grants Administration Divisions. 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 committment and
obligation.
5. Contract. The agreement used when the principal purpose
of the relationship is the acquisition by purchase, lease, or
barter of property or services for the direct benefit or use of the
Federal Government. (Also known as procurement or acquisition
relationship.) (Ref.- Federal Grant and Cooperative Agreement Act
of 1977)
6. Cooperative Agreement. The agreement used when the
principal purpose of the relationship is the transfer of money,
property, or anything of value to a State or local government or
other recipient in order to accomplish a public purpose of support
or stimulation authorized by Federal statute in which substantial
involvement is anticipated between EPA and the recipient during
performance of the contemplated activity. (Also known as an
assistance agreement.) (Ref. - Federal Grant and Cooperative
Agreement Act of 1977 and 40 CFR Part 31)
7. 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 Headquarter offices.
8. Decision Memorandum. The Program Office's memorandum to
an Award Official containing the decision to and justification for
either funding or rejecting an assistance proposal. This decision
is signed by the Approval Official or their respective designee.
The memorandum is sent to the Grants Management Office as part of
-------
the assistance funding package.
9. Grant. The agreement used when the principal purpose of
the relationship is the transfer of money, property, or anything
else of value to a State or local government or other recipient in
order to accomplish a public purpose of support or stimulation
authorized by Federal statute in which no substantial Federal
involvement is anticipated between EPA and the recipient during
performance of the contemplated activity. (Also known as an
assistance agreement.) (Ref. - Federal Grant and Cooperative
Agreement Act of 1977 and 40 CFR Part 31.)
10. 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.
11. National Program Manager. The individual responsible for
management of a program on a national level.
12. Program Element. A classification within EPAfs
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.)
13. 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.
14. Regional Program Manager. The individual responsible for
technical\programmatic management of an assistance program at the
regional level.
15. Statutory Authority. The section of specific authorizing
legislation providing grant-making authority to the EPA. (Appears
as Item #19 on EPA's Assistance Agreement.)
IV. PROCEDURES
1. planning and Communication
A. Program Office Responsibilities
1. The Program Office(s) should be encouraged to
establish an annual plan and schedule for recommending awards and
to regularly communicate that plan and schedule to Headquarters and
Regional Grants Management Offices. In particular, the Program
must communicate their plans for spending last-minute money to
-------
these offices. These plans must comply with the timetables cited
in the Comptroller's Year-End Close-Out Procedures (See
definition).
2. The Program Office should do as much preliminary
planning and work as possible (including a prioritized list of
potential projects and possibly completed applications and
workplans from potential recipients for these projects) in
anticipation of possible, last-minute, year-end funding.
B. Grants Management Office Responsibilities
1. The Grants Administration Division should hold
periodic meetings with the National Program Managers\Contacts and
the Budget Division to discuss proposed assistance funding plans,
schedules, and related information and then distribute that
information to both Headquarters and Regional Grants Management
Offices so they can adjust their workload.
2. The GMOs should hold periodic meetings with Program
Contacts to discuss proposed assistance funding plans and to plan
their workload.
3. The GMOs must plan their workload to allow for
processing some unexpected, last-minute, fourth-quarter awards.
2. Identifying Program Element, Statutory Authority,
Delegation of Authority
A. Program Office Responsibilities:
1. The National Program Manager (NPM) should notify the
Regional Program Manager (RPM) via memorandum or d-mail, whenever
the NPM initiates a reprogramming for distribution of assistance
funds to the Region. The NPM must identify the purpose of the
funding; program element; statutory authority; delegation of
authority, and an appropriate program contact person familiar with
the project in the memorandum\d-mail. The NPM should carbon copy
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.
2. The NPM must reference the dated memorandum or d-mail
on the budget reprogramming which transmits the funds to the
Regions. This reference should be entered in the justification
section of the IFMS reprogramming document. When possible,
reprogrammings should cite the appropriate object class, i.e.
object class 25 for acquisition and object class 41 for assistance.
-------
3. The NPM must include the Grants Administration
Division's (GAD) Assistance Administrative Summary Sheet in program
guidance. The Summary Sheet includes the program element,
statutory authority and the delegation of authority for the
respective assistance program. The NPH must submit the completed
Summary Sheet and program guidance to GAD for concurrence prior to
its issuance.
4. 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.
5. The Program Office should coordinate with the
appropriate NPN, and Headquarters or Regional Budget Office to
provide the GMO with missing information if the GMO returns a grant
award\funding package to the Program Office because it is
incomplete regarding program element, statutory authority and
delegation of authority.
6. The Approval Official must designate the program
element, statutory authority, and delegation of authority in the
decision memorandum.
7. The Program Office should refer any legal questions
regarding eligibility to the Office of General Counsel or Regional
Counsel.
Bo Grants Management Office Responsibilities
1. The GMO provides an overall "check and balance"
function, assuring the correctness of the program element and
statutory authority, and the existence of a delegation of authority
for the program to approve.
2. The GMO should request clarification from the Office
of General Counsel or Regional Counsel on any legal questions
regarding eligbility.
3. The GMO should return all incomplete funding\grant
packages to the Program Office and should communicate to the
-------
Program Ofi ce the infer-ation needed tc complete the package.
4. The Grants Administration Division (GAD) and GMOs,
when appropriate, must incorporate the standard operating
procedures stated in this policy into their training programs,
e.g., project officer training, and Basic Grants course.
5. GAD should verify that its Assistance Administrative
Summary Sheet appears in all program guidance.
3. Assistance vs. acquisition
A. Program Office Responsibilities
The Progrim Office should review all contemplated
p. ejects ; soon as p -.sible for the purposes of determining
whether t* nature of ie project activity is acquisition or
assistance. (See Sec'. II, Par iraph 3) If it is unclear
whether a project is ac sition or assistance, the Program must
request the GMO, with involvement of the Office of General
Counsel\Office of Regional Counsel, if necessary, to make a final
determination on the nature of the activity. If there is a need to
reprogram funds, the Program Office should request the Budget
Office t- reprogram them in the appropriate object class, i.e.
object - .33 25 for contracts, and object class 41 for grants and
cooperative agreements.
2. In most instances, the Program Office must allow at
least 60 days lead time (Superfund awards require 90 days) to
assure award of a grant from receipt of application by the GMO to
the award date. A much longer lead time may be needed to ••ward a
contract.
B. G- ;s Kant .ment office Responsibilties
1. The GMO, based on the advice of the Office of General
Counsel or Regional Counsel, if necessary, will make the final
determination whether a project is acceptable as an assistance
project.
2v The GMO should return all proposed assistance award
packages that are acquisition activities to the Program and
communicate to the Program the reasons it cannot award the project
as an assistance project.
3. The GMO will incorporate modules emphasizing the
differences between acquisition and assistance and citing examples,
cases studies and "do's and don't's" regarding the appropriate use
of assistance into both formal and informal training settings for
programs and project officers.
8
-------
ASSISTANCE ADMINISTRATIVE SUMMARY SHEET
. OPERATING PROGRAM\OFFICE:
2. PROGRAM CONTACT(S):
3. CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) NUMBER:
4. PROGRAM TITLE:
5. PROGRAM PURPOSE:
6. ELIGIBLE APPLICANTS\RECIPIENTS:
7. TYPE OF ASSISTANCE:
Grant
Loan
Cooperative Agreement
8. NATURE OF ASSISTANCE:
Continuing Program
Project
9. STATUTORY AUTHORITY:
Act:
Section:
10. REGULATORY AUTHORITY:
Programmatic:
Administrative:
1. COST SHARING\MATCH REQUIREMENTS:
Yes_
%
No
MOE
BASIS OF COST SHARE\MATCHING REQUIREMENT:
Statute Program Regulation
Program Guidance Administrative Regulation
12. LIMITATIONS: Yes.
If yes, list the limitations:
No
13. DELEGATION OF AUTHORITY:
Delegation Number:
Title of Delegation:
14. SUBJECT TO INTERGOVERNMENTAL REVIEW: Yes
No
15. PROGRAM CODE:
16. PROGRAM ELEMENT:
17. OBJECT CLASS:
-------
ASSISTANCE ADMINISTRATIVE SUMMARY SHEET INSTRUCTIONS
1. OPERATING PROGRAM OR OFFICE: (Office establishing program.)
2. PROGRAM CONTACT(S): (Name, location and phone # 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. SUGGESTED PROGRAM TITLE: (The official title of the aBnintanre program. May or may not be
included in the Cfl^fll^gue of Federal Domestic Assistance. (See #3.) Be concise •***! descriptive (40
characters or less).
5. PURPOSE: (A one or two sentence summary description of eligible activities.)
6. ELIGIBLE APPLJCANTSVRECIPIENTS: (Who is eligible to receive this assistance from EPA? Often
identified in the authorizing legislation.)
7. TYPE OF ASSISTANCE: (Grant, Cooperative Agreement, Loan)
8. NATURE OF ASSISTANCE: (Continuing Program; Project)
9. STATUTORY AUTHORITY: (EPA's legal authority to fund activities; cite the Act, and the Section.
OGC will verify statutory authority to award financial assistance as proposed and make necessary legal
determinations.)
10. REGULATORY AUTHORITY: (Cite programmatic regulation(s) governing the assistance program in
addition to *bg standard grant a<^ff|'t"B*riitit>f- regulations.)
11. COST-SHARING\MATCH REQUIREMENTS: (What share must the applicant contribute to the
assistance? Is it a statutory or regulatory requirement? Reminder For those programs with no
statutory/regulatory match requirements, it is national policy to encourage a minimum five percent match
'to States/loca} :o ensure the recipient's committment to the project. The five percent minimum is a
egulatory requ aent for all educational and non-profit organizations per 40 CFR 30.307.)
12. LIMITATIONS: (What restrictions, if any, are there e.g., 10% statutory limitation on administrative costs
for 319(h) Non-point source grants?)
13. DELEGATION OF AUTHORITY: (Provide number and title of Delegation of Authority(s) for these
grants. Identifies the official(s) who have the authority to approve or reject the funding of the grant and
the official(s) who have the authority to award the grant. Management and Organization Division
coordinates Delegations of Authority for EPA.)
14. INTERGOVERNMENTAL REVIEW: (Is this required? Executive Order 12372 provides for State's right
to review applications for Federal assistance.)
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 ELEMENT: (Budgetary classification which identifies the source of the funding; is supported
by one or more authorizing sections of law and must be associated with the grant statutory authority.)
17. OBJECT CLASS: (Budgetary classification further defining the program element.)
-------
APPENDIX K
TIMELY AWARDS
MEMORANDUM
-------
SEP t 4 1S92
MEMORANDUM
SUBJECT: Policy on the Timely Award of Assistance Funds
for Continuing Environmental Programs
Original signed by Harvey Plppeo, Jr.
FROM: Harvey G. Pippen Jr., Director
Grants Administration Division
TO: Assistant Regional Administrators
Regions I-X
Attached is a policy entitled "Timely Award of Assistance
Funds for Continuing Environmental Programs." This policy is
issued in conjunction with a memorandum dated June 26, 1992, from
the Office of Comptroller which clarifies general Agency policy on
when funds are available for award.
If you have any questions concerning this matter, please
contact Bruce Feldman at 202 260-5268.
Attachment
cc: Howard Corcoran, OGC, (LE-132G)
Becky Fredericks, HQ, Budget Division (PM-225)
Kathy Payne, HQ/OW (WH-556)
Jerry Kurtzweg, HQ - Office of Air & Radiation (ANR-443)
Dick White, HQ - Pesticides & Toxic Substances (TS-788)
Judy Kertcher, HQ - Hazardous Waste (OS-110)
Doug Barrett, HQ - OC/FMD (PM-226F)
Jane Ephrimedes, HQ - OW (WH-546)
Carol Crow, HQ - OW (WH-546)
Robbie Savage, ASWIPCA
Marian Cody, HQ, (PM-216F)
Corinne Allison, HQ, (PM-216F)
bcc: Official R. Johnson B. Feldman
Reading Grants Management Offices - Regions I-X
Division GPPB Staff GAD Branch Chiefs
PM-216F:RJohnson:RAJ:260-5296:FC 801:Disk - RJ:MEMO2.FNL
-------
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
-------
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 raised 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-
-------
10-5-5 percent of total (i.e. 80 percent of the funds are available
in the first quarter; 10 percent are available for the second
quarter; and five percent each are available for the remaining two
quarters of the fiscal year). The apportionment reflects the
quarterly split for the entire appropriation. During Phase III of
the President's Budget, this quarterly split is equally applied to
every program element in the appropriation. Regional Offices may
adjust the amount awarded under each program element provided the
total awards do not exceed their quarterly split.
By adjusting the Regional resources during Phase III, Regional
Comptroller Offices, working with the Regional Grant Management and
Program Offices can, to the maximum extent possible, fully fund
their continuing environmental program grants in the first quarter
while funding project grants, contracts, or lAGs later in the year.
Thus, the decision rests with the Region to determine which awards
to make using the Region's first quarter allowance of AC&C funds.
(The assumption is that sufficient resources are available to
permit the Region to fund 100 percent of fundable continuing
environmental grants.)
o Under a Continuing Resolution
Under a Continuing Resolution (CR), all affected agencies
receive limited funds based on constraints written by Congress and
OMB applicable for the time period covered by the CR.
During the CR, funds are available to the regions based on a
percentage of their total appropriation and they are not restricted
by program element or object class totals. Regional offices may
adjust the amounts funded under each program element provided the
Region does not exceed its total available allowance. Thus,
depending on its priorities and the amount of funds available, the
Region may fully fund its continuing environmental program grants
even under a CR.
PART IV. GMO ROLES AND RESPONSIBILITIES
This Section outlines the basic roles and responsibilities of
the Grants Management Office (GMO) in awarding assistance funds for
continuing environmental programs.
FUNDING AVAILABILITY
1. GMOs must coordinate with the Regional Comptroller to
ensure inclusion on distribution lists of information
received from the Office of Comptroller relating to
assistance funds. This information includes the Regional
Operating Plan (and any revisions) and all other
pertinent grant correspondence and policy issued by the
Office of Comptroller.
-------
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
-------
they complete the final grant funding packages by the end
of the current budget period, i.e. making sure Decision
Memorandums/Funding Orders are in order.
-------
Appendix 1
UNITED STATES FNVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20400
JUN 2 61992
OFFCECf
AOMMMTRATttN
MEMORANDUM
-/7
ids
(FM-225)
TO: Assistant Regional Administrators
Senior Budget Officers
This memo is intended to clarify some of the geaenl policies tad concepts fat
govern funds availability and flexibflity in the Agency When a fiscal year begins. The
"financial environment" has been rapidly changing over- the-last few yean both inside
EPA as well as government-wide. These changes have raised questions as to the
fundamental core rptpgnipMliHfl* of the Agency's frn>*t*gtn>cnt -of our ^«*i»^fa^ reeonxoes.
These issues are extremely complex and highly variable, requiring an n*a~**aM»t of
the inter-relationship of four core funding documents. This memo provide! «n overview
of the fanHam^nf^] core T-iHK^Turit^litifi. Tlio Budget Division is comofty in the. process
of updating the Planning **** Budget Manual and fytf Funds Control ***^**j which wffl
incorporate the more detailed guidance. As part of this process, I would welcome
comments and suggestions for additional clarifications, as needed.
Background
Several recent events have focused our attention on how the division It
communicating resource decisions and providing information coocnrnrng 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 Chkf
Financial Officer Act of 1990, Federal Credit Reform Act of 1990 and the Cnan
Management Improvement Act of 1990. Second, we have imphwrtftl lhft\
Financial Management System (EFMS) within the last few yean which hat
significant impact on the flow of information concerning financial lesoufc .^
new responsibilities for the Responsible Planning and Implementation Officers (RFiOa).
— . »
riwwtv en
-------
Third, a quality action team was convened by the Office of Wastewater Enforcement
and Compliance for the purpose of addressing State concerns on the grants process.
And fir-ally, 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 on find
availability and flexibility. In particular, it is clear that there has been some confusion
about when funds become available for obligation and how much flexibility the Agency
has in making resource management decisions. I would like to take advantage of these
circumstances and take a first step in providing some clarification on the general
concepts, controls, and procedures which make funds available for obligation.
Availability of Funds
At any time, the funds available to the Agency is governed by four bask
documents: (1) the Congressional Budget Justification; (2) the Appropriation Law under
which the Agency is funded; (3) the OMB Apportionment; and (4) die Agency's
approved financial Operating Flan. In general, each docnmeirt governs a different aspect
of the Agency's cash flow and flexibility.
(1) CoogreBSkmal Budget Justification provides Congress and the ^''"'"'•"•*V* with
the Agency's basic blueprint on where we are spending our money, what resold
we expect to achieve, and our accomplishments for the previous two fiscal years.
Since OMB and Congress consider -this document to be the basis of our teftgpt,
deviation from it usually requires action, by either Congress and/or OMB.
(2) Appropriations Law provides the Agency with the basic requirements eetahtishfri
by Congress. It includes the total level of funds available within each financial
account and specific guidance to the Agency through specific approprJations
language, report language, and other legislative history. The law enacts the
underlying structure of our appropriations accounts and Congressional Budget
Justification with modifications spelled out in the legislative history. The IAW
provides both restrictions (account transfers; Travel ceilings; PC&B floors) and
flexibility (reprogramming 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 obligations. Usually,
OMB apportions the Agency's funds by quarter. There ate, however, other cases
where OMB limits the use of funds either through a set aside (in a "Listini'jl B")
or through footnotes to the apportionment. One recent use of these restrictions
has been OMB's establishment of a clean-up category in the Snperfund
apportionment.
-------
(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
expends funds. The Operating Plan is the document against which the
Agency is monitored for compliance with Congressional and OMB
directives.
In an attempt to maintain communication with the resource community and to
implement these four governing documents, the Budget Division has established several
institutional methods of communication that provide guidance as to the availability of
resources to the Agency's managers. The are: (1) Advice of Allowance for each
appropriation to each Responsible Planning and Implementation Officer (RPIO); (2) an
online financial Operating Plan contained in the Integrated Financial Management
System (IFMS); and (3) the Appropriations Analysis, Bills and Reports digest* m
These sources of information establish spending limits at a detailed level to
ensure compliance with apprpylatgd amounts, directives, >Tvfl guidance (^nr^1MHfl£ add*
ons and reductions) as well as OMB apportionment restrictions. The use and
applicability of each guidance source is dependent upon the status of the Agency's
Operating Flan.
Appropriation*
At the beginning of the fiscal year, the Appropriations -Law governing die Agency
will take one of two forms: either an annual Appropriations Bfll covering die ratt year
or a Continuing Resolution that covers a shorter period of time. (If the Agency baa no
Appropriations Law, the Agency must "shut-down* operations which is addressed by HPA
Order on Actions in the Event of an Appropriations and/or Debt Getting Hiatus). The
status of the Agency's appropriations significantly affects die level of funds available to
the Agency and the amount of flexibility with which toe Agency can operate. The
following lays out general principles for the availability of funds under each
appropriation scenario and attempts to illustrate the interrelationship between die
controlling documents |jg***f above.
One special note, however, is that the specific rules and conditions under which
the Agency operates can vary significantly from year to year. Congress and OMB
generally provide us with a complex set of rules that can be modified yearly, quarterly,
or monthly. The resource community should stay in close contact with die Budget
Division to determine specific needs during any fiscal year and should follow die yearly
guidance and Advice of Allowance to implement the special needs identified.
-------
Availability of Funds Under an
The budget statutes that govern the federal budget process provide that the
Agency begins its fiscal year on October 1 with an enacted Appropriations Bill. Once
the Appropriations Bill is signed by the President, EPA has 30 days to provide an
enacted Operating Plan to the Office of Management and Budget (OMB) and the
Congress for their approval. This Operating Plan uses the Congressional Budget
justification as its baseline and modifies it according to Congressional directives
contained in the Appropriations Law. In addition, OMB has 30 days following
enactment to provide the Agency with the apportionment of its appropriations.
After enactment of the annual Appropriations bill, the Comptroller transmits the
Appropriations Analysis, Bill and Report digest to each RFIO. This digest is an analysis
of the Appropriations bill, its legislative history, and its requirements. This tnnsmittal.
represents a formal delegation from the Comptroller to the BPIOs of the program
responsibilities contained in our Appropriations Law and its legislative history.
During the interim period prior to approval of the enacted Operating Plan, the
Operating Plan based on the President's request (Phase HI) is loaded in die IFMS. A
guidance ftiw1** based on iHtiiO temporary ffstiiPBtcs fncliMlffd in OMP ilT* fftfoiim "iitt is
issued to the RPIOs on how to proceed until the Agency his an approval f^f^p^
Plan. We try to provide the maximum amount of funding to tOow normal Agency
operations. However, RPIOs are advised that the Operating Plan in IFMS has not beta
adjusted to reflect Congressional actions or the final Administrator **f«t*4>Htl*«t? and
flexibilities on the use of funds (ceilings, floors, reprogramming requirements).
uiid der
In recent yean, our annual Appropriations Bill has not been enacted by die start
of the fiscal year. In this situation, the Agency begins die fiscal yen under • Canrhnring
Resolution (CR). During this time, the RPIOs are provided' general guidance
memoranda from the Comptroller Budget Division on die rotes governing Agency
operations until we have a full year Appropriationt Law and die resulting enacted
Operating Plan. These rates include, but are not limned ID, die me of roads tejbe
purposes for which they were requested in the Congressional Budget ~' •~-c*^"<*»^
as the restraints included in the Continuing Resolution, as written by
OMB's Apportionment of the Continuing Resolution funds.
-------
Generally, CRs hold the Agency to a more restrictive level than our proposed
President's Budget. At that more restrictive level, the Agency is provided sufficient
funds for the time period covered by the CR. The CR, however, rarely provides enough
funds to cover "normal" operations. While operating under a CR, each RPIO is provided
a portion of their total appropriation to obligate. Because of the allotment process that
we have agreed to with OMB, the Agency maintains significant flexibility. Therefore,
monitoring and lockout of funds during this time are done at the highest possible level
for each Allowance Holder. Maximum flexibility by program element and object class is
permitted.
Funding Flexibility
During the execution phase of the budget, the Agency must take care to adhere to
the limits am* constraints of its four governing documents* Within the ThnH*! however,
the Agency maintains considerable flexibility in the use of mods. Some of (far fleadbfflty
is laid out in the Agency's Appropriation Law. For example, me Agency is allowed to
reprogram funds up to a certain level ($500,000 for FY 1992) between programs m the
operating plan.
Another example of flexibility is in the quarterly apportionments by OMB.
During the development of the Operating Plan, the anticipated quarterly apttta are
equally applied to every program element in the appropriation. These auMmaied
quarterly splits to resources may be adjusted, however, to obtam desired; figadbOto wmle
as long as the quarterly split at the RPIO level for that apjiroptiartoo k mifsmptp; -*
" ~j *
Flexibility is, therefore, within the limits ^tfnMii|tftd hi the jaatificattoa,
Appropriations Law, and the OMB Apportionment. The situations and variables are tar
to numerous and complex to set out specific guidance in this memo. The **to">M'rH to .
this memo gives one specific case example .of flexibility within our llmHilkms. Within
these limitations, the Agency doc* maintain a significant amount of flexibility in fundmf.
Closing
I hope this information clarifies some of the confusion on these issues. In addition, I
would like your input, comments and questions regarding the type of specific giiirtanon
you believe would be helpful to you in managing the Agency's resources. Please direct
your comment* and inquiries to Delia Scott, Chief, Formulation and Control Branch, at
260-1176 or Becky Fredericks, Chief, Management and Policy SUIT, at 260-2470.
Attachment
-------
ATTACHMENT
CASE EXAMPLE
The Agency begins the year on a Continuing Resolution (CR) for 30 days which
provides us with an automatic apportionment for 30/365ths or approximately 8% of each
of our appropriations based on the levels of the year just ended.
The status of our Appropriation's Bill is still delayed in Congress or the White
House and we cannot yet operate at the levels expected for the current year or use the
Phase in Operating Plan (OPLAN) which is awaiting action to incorporate
Congressional add-ons and reductions following
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. The inn-year
Appropriations Bill based on the Congressional Budget Justification, and die Operating
Plan, are still pending. Funds are now available, however, aa la guidance and flexibility.
The Comptroller/Budget Division issues a aeries of stains and guidance
memoranda (or EMAIL) providing as much specific information and general finding
guidance as is available to EPA. Among other features, this guidance sjwjyj. stresses:
1 • ^^ADuOA flflu DRluflDt flSAOft
2. Availability of funds (CR percentage) at the Appropriation/Allowance Bolder
total level for each RPIO/Region. Allowance Holders are not held to lower
program element/object class level during a CR.
So, even under the most restrictive (CR) -circa
being provided within the total pool of resources available te the
fund the highest priorities based on their own ae^ennfiationT If Sftb
or an AC&C grant to a particular State is the highest priority, then the oppernffity fw
obligation is in place.
END OF THB CR . AS soon as the CR is ended (usually during die first quarter) by the
enactment of EPA's Appropriations Bill and signature by the President, the full year
Phase in Operating plan is loaded into IFMS and guidance to obligate mut^s^y while
Congressional add-ons and reductions are implemented is issued.
-------
Now that a full year's appropriation is enacted, the budget planning process,'if
followed correctly should provide the Program Offices with availability of funds
opportunities to award any priority items (e.g. grants) in the Tint quarter of the fit
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
dispDporiionately "front loaded" in the 1st quarter apportionment to allow Program
unices to fund Priorities (such as grants i.i the 1st quarter should they choose to do so
during the phases of Operating Plan development.
CONCLUSION
In terms of proper budget planning, the following steps by the Program Offices
will allow for priority items to be funded in the first quarter:
A. Regional filrtrihutiona of the Pres. Budget resources have been made by the
National Program Manager and incorporated into me OPLAN.
B. Priority items (such as grants) have all been budgeted in the 1st quarter
OPLAN by the RPIO during Phase m.
Ci KPIOs begin the obligating paperwork for the priority items as soon as the
year begins so it is ready to go as soon as sufficient funds are.
D. Commitments are entered promptly as soon as the Appropriadoos Mil is
signed and IFMS is open.
B. Obligating documents are promptly forwarded to Cants Offices. Conuac
Offices, etc. for obligation.
-------
Appendix 2
STATUS OF ASSISTANCE AWARDS WITH ANNUAL BUDGET
PERIODS OF OCTOBER 1 TO SEPTEMBER 30
(AS OF SEPTEMBER 15, 1991)
DEPARTMENT OF ENVIRONMENTAL MANAGEMENT
PROGRAM
Air Pollution Control (105)
Water Pollution Control (106)
Surface Water
Water Pollution Control (106)
Groundwater
Water Quality Management Planning
Underground Water Source Protection
Public Water System Supervision
Underground Storage Tank Regulation
Underground Storage Tank Trust Fund
Hazardous Waste Management
Pesticides Certification
Pesticides Enforcement
Pesticides Special
STATUS
Conditionally Approved
Final Not Yet Approved
Final Not Yet 4^?proved
Approved
Conditionally Approved
Approved
Approved
Approved
Conditionally Approved
N/A
N/A
N/A
-------
Appendix 3
Environmental Protection Agency Assistance Program
Continuing Environmental State Programs
Catalog
Number Program Description
66.001 Air Pollution Control Program Support
66.419 Water Pollution Control - State & Interstate Program
Support
66.432 State Public Water System Supervision
66.433 State Underground Water Source Protection
66.435 Water Pollution Control - Lake Restoration
Cooperative Agreements
66.458 Capitalization Grants for State Revolving Fund
66.461 Wetlands Protection - State Development Grants
66.700 Consolidated Pesticide Compliance Monitoring and
Program Cooperative Agreements
66.701 Toxic Substances Compliance Monitoring Program
66.801 Hazardous Waste Management State Program Support
66.804 State Underground Storage Tanks Program
66.805 Underground Storage Tank Trust Fund Program (LUST)
-------
APPENDIX L
CARRYOVER POLICY
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
MAY 6 1988
COMPTROLLER POLICY ANNOUNCEMENT
NO. 88-09
OFFICE OF
ADMINISTRATION
AND RESOURCES
MANAGEMENT
MEMORANDUM
SUBJECT:
FROM:
TO:
Disposition
Assistance
David P.
Comptroll
ted Balances of
ministrators
'Directors
Assistant Regional
Management Divisior
Senior Budget Officers
Regional comptrollers
Financial Management Officers
This Policy Announcement clarifies EPA policies and
procedures for the disposition of unobligated balances of
assistance awards, i.e., grants and cooperative agreements.
It describes the circumstances when EPA may carry these funds
forward and provides specific procedures to ensure proper
accounting for assistance awards.
POLICIES AND PROCEDURES
There are three attachments to this Policy Announcement.
Attachments I and II describe policies and procedures appli-
cable to the disposition of these funds. These policies and
procedures address all financial assistance programs except
those funded from no-year appropriations. Guidance on two of
the no-year appropriations can be found in Comptroller Policy
and Procedure Memorandum 9-F, "Recovery and Use of Construc-
tion Funds," and will be found in the Resources Management
Directives System 2550D, Superfund Financial Management, which
will be issued shortly.
Attachment III contains examples of how this guidance
applies to specific types of assistance agreements.
-------
EFFECTIVE DATE
Allowance Holders must ensure that assistance awards
•ade froa their respective allowances are administered in
accordance with this Policy Announcement no later than
June 30, 1988.
FOR ADDITIONAL INFORMATION
If you would like additional information on the specific
policies and procedures described in this Policy Announcement,
please contact Bob Cluck, Fiscal Policies and Procedures
Branch, Financial Management Division, at 382-5113.
Inquiries about the Agency's general policies and
procedures on the administration of assistance projects
should be made to Scott McMoran, Grants Policies and Proce-
dures Branch, Grants Administration Division, at 382-5293.
Questions concerning recoveries of funds under Agency
appropriations and about the scope of this Policy Announcement
(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 2S50C,
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
-------
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 XI. The policies are also
summarized on the chart following page 4 of this Attachment.
X. 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.
Xn contrast, when Congress appropriates "no-year" funds,
these funds remain available until fully expended — they do
not expire. Both the Construction Grants Program and Superfund
activities have historically been funded with such appropriations.
Congress may choose to add to the Agency's "no-year" balances
through subsequent appropriations.
B. EPA Assistance Award's. 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* (Xn some cases, such as the Asbestos School Hazard
Abatement Act program, it may be appropriate to have open-ended
work progress milestones or similar criteria.)
-------
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 may not be able to
obligate all the funds awarded by EPA. At the end of each budget
period the recipient must report any "unused" funds to EPA on
their Financial Status Report. The "unused" amounts are shown as
the unobligated balance of Federal funds. The final disposition
of -those unobligated balances depends on several factors, as
discussed in Section ZZ below.
c. GAP Review. Zn 1984 GAO reviewed EPA compliance with the
Federal Managers Financial Zntegrity Act (FMFZA). Zn 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 FMFZA weaknesses, we made a commit-
ment to review our current practices for making recipients'
unexpended balances available in later budget periods. The
policies and procedures set out in the following sections are a
result of that review and seek to strengthen our management of
those funds.
IZ. GENERAL POLZCZES
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
Zn 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.
-------
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 following criteria fit:
1. Project agreements. Project type assistance agreements
involve undertakings with a discrete outcome, product or report.
Most of EPA1s 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. If 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.
Criterion: With respect to program agreements, unobligated
balances from one budget period of a continuing
-------
environmental program or activity may be made
available in a subsequent budget period of that
program c activity as long as: 1) the transfer
to the su_sequent budget period is made before
the source appropriation for those funds expires,
and 2) the assistance agreement includes a
special condition limiting the recipient's
obligation of these funds before the end of
the subsequent budget period or within one year
of the amendment, whichever is earlier.
3. Recoveries of Assistance Award Balances. If a recipient's
unobligated balances will not or cannot be available in a subse-
quent budget period, the downward adjustment will be considered a
recovery to the source appropriation.
-------
DISPOSITION OF UNOBLIGATED BALANCES OF ASSISTANCE AWARDS.
WHEN CAN I CARRY FORWARD FUNDS?
Protect typo
•pproprtotfcf)
Fundtnol
avttobto
••try larwartf
Fund*
lor o»rry«vor to
-------
Attachment II
PROCEDURES FOR THE DISPOSITION OF UNOBLIGATED
BALANCES OF ASSISTANCE AWARDS
I. TRANSFER OF FUNDS FROM ONE BUDGET PERIOD TO ANOTHER
Transfers of funds from one budget period to another must
be documented by the execution of two complementary and concur-
rent EPA Assistance Agreement/Amendments (EPA Form 5700-20A).
(EPA1s optional amendment form, 5700-20B, or other appropriate
form, may be used in the following procedures in lieu of the
5700-20A to amend agreements as long as the same accounting
information outlined below is included on the form.) The
executed forms must be provided to the servicing financial
management office when signed both by EPA and the recipient.
The first Form 5700-20A/B will decrease funds awarded for
the earlier budget period. For the succeeding budget period, the
second 5700-20A/B may: 1) provide interim funding, 2) increase
the funds available, or 3) replace "current year' (i.e., new
obligational authority) funds. Zn 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
follows:
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.
-------
3) Item 30. Item 30 ("EPA Aaount this Action") will include
the forner 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 followsi
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.
-------
If the less structured Form 5700-20B is used to execute the
preceding actions, the sane information must be contained in
readily identifiable form on that document.
II. DISPOSITION OF AWARD BALANCES AT END OF A CONTINUING
ENVIRONMENTAL PROGRAM OR AT END OF PROJECT PERIOD FOR OTHER
ASSISTANCE PROJECTS " ~~~~~^
If a continuing environmental program is terminated, or
whenever a project period ends for other types of assistance
awards (e.g., project type agreements), the FSR for these pro-
jects may contain balances of Federal funds unobligated by the
recipient. In such a case, a Form 5700-20A/B must be completed
to decrease the award by that amount. The 5700-20A/B and FSR
will be submitted to the servicing financial management office
so that the deobligated amount can be recorded in EPA's FMS.
The deobligated amount would create a recovery to the source
appropriation. Detailed information on recoveries is found in
Office of the Comptroller Policy and Procedure Memorandum (PPM)
13-B, "Overrun and Recovery of Prior Year Obligations." This PPM
was amended in part by the OC memorandum of September 12, 1984,
entitled "Recertification of Funds," and is being revised.
III. DEOBLIGATION OF EXPIRED FUNDS
Generally, effective management of assistance awards and
timely processing of financial reports (e.g., the FSR) both by
the recipient and by EPA can keep expired, unavailable amounts
to a minimum. Charging outlays first against older funding
sources of an assistance agreement, where otherwise appropriate,
is one way of avoiding the loss of funds.
In the following two instances, deobligations would be
necessary. First, an assistance recipient might submit a final
FSR for a program grant budget period after the Appropriation
which originally funded that budget period had expired. If the
recipient reports on that FSR that they have an unobligated
balance of Federal funds, EPA would prepare a 5700-20A to docu-
ment the decrease and to use as a basis to record a corresponding
deobligation in FMS. Second, if as a result of an audit, costs
are disallowed and the source of funding for these costs has
expired, the amount of the receivable for the disallowed costs
would be deobligated.
IV. FUNDING BUDGET PERIODS THAT EXTEND BEYOND THE LIFE OF AM
APPROPRIATION
In some instances, assistance project budget periods are not
concurrent with the Federal fiscal year. When they are not con-
current, a budget period could very possibly be funded by an
appropriation that expires before the budget period itself ends.
Such awards are allowable as long as EPA's obligation of the
assistance funds occurs before the source appropriation expires.
In the case of amendments transferring unobligated balances
to a subsequent budget period, the criteria in Attachment I,
Section Il.c must also be met.
-------
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 «PA 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 (ACfcC) 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 fund* after paying all their
allowable coats 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
•ward, the Region prepared a 5700-20B showing the reduction, and
provided a copy (along with a copy 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.
-------
The amendment was provided to the FMO with the documents
effecting the decrease. The FMO recorded the increase against
the current year obligation document number using Transaction
Code 059.1, and the accounting data for these funds.
EXAMPLE B — Continuing Environmental Program. Expired
Appropriation
Zn 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 not received until after the source appro-
priation had expired. Because the appropriation had expired,
the recipient's $50.000 in unobligated balances were no longer
available to the Agency, the Region or the recipient.
To ensure proper accounting for the Agency's funds, the
award official was responsible for executing an assistance amend-.
•ent to document the decrease in the Agency's estimated liability
(i.e., obligation) for the assistance agreement. The amendment
and FSR were provided to the FMO, who recorded the decrease, whic?
is reflected in FMS, as a recovery to the expired appropriation.
EXAMPLE C — Project Agreement, Availability of Funds in the
Second and Later Budget Periods
The Headquarters Grants Operations Branch awarded a research
cooperative agreement to a University tat-support investigation of
the environmental fate of certain pesticides. At the end of the
project, the recipient was required to provide a detailed final
report of the project and findings.
For effective oversight and administration, the project
period was divided into three budget periods. At the end of each
budget period, and at other times during the project, the Univer-
sity researchers would submit progress reports to EPA. These
reports merely provided information which was not independent or
separate from the final project outcome, product or report.
Using an unexpired RfcD appropriation as its source of funding,
EPA made the initial award (budget period "01") for the project
late in Fiscal Year 1986 (see Figure 1 on next page). The project
-------
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
1 I I I I T
J | I I
B.P. "01"B.P. "02"B.P. "03"
During early fiscal year 1988, the University submitted its
final FSR for budget period "01." The FSR reported that $10,000
of the original award was unused, and requested that these funds
be made available in budget period "02" for continued work on the
project. Upon approval from the Office of Research and Develop-
ment, the award official executed an amendment to make these
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 were charged off first to
the funds awarded for budget period "01.
H
The recipient's unobligated balances for budget period "02"
were reported in budget period "03," during our Fiscal Year 1989.
Again, the balances were made available, but in this instance
no additional funding was required to complete the project. Thus,
Fiscal Year 1988 funding awarded for budget period "03" was re-
placed by the funds made available from budget period "02."
The source appropriation for these "displaced" funds was the two-
year RfcD appropriation available for obligation in Fiscal Years
1988 and 1989, and therefore these funds became available for
the Budget Division to recover and reissue.
The FSR for budget period "03" contained unobligated balances
as well, but since the project was now over, the balances were
treated as recoveries to the appropriation.
-------
APPENDIX M
MBE/WBE PLANS
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
JAN t 5 1992
office or
TMEMMMOrRATOR
MEMORANDUM
SUBJECT: The 8% Flan 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 Programs". That guidance implemented
the 1991 Appropriations Act, P.L. 101-307, 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's 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. F.opes, Director, Office of Small and Disadvantaged Business
Utilization, or George K. Mori, Senior Program Officer. John can
be reached at FTS 365-7777 and George on 365-6301.
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20460
FEB I 5 1991
OFFICE OF
THE ADMINISTRATOR
MEMORANDUM
SUBJECT: FY-91 Program for Utilization of Disadvantaged Business Enterprises
in Procurement Under Assistance Programs
f
FROM: F. Henry Habicht, 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 law, the 1991
Appropriations Act, P.L. 101-507, which includes the appropriations for
the Environmental Protection Agency.
The Administrative Provisions of this Act contains the following
language:
"The Administrator of the Environmental Protection Agency
shall, to the fullest extent possible, ensure that at least 8 per
centum of Federal funding for prime and subcontracts awarded in
support of authorized programs, including grants, loans and contracts
for wastewater treatment and leaking underground storage tanks grants,
be made available to business concerns or other organizations owned
or controlled by socially and economically disadvantaged individuals
(within the meaning of Section 8(a)(5) and (6) of the Small Business
Act (15 U.S.C. 637(a)(5) and (6)), including historically black
colleges and universities. For purpose of this section, economically
and socially disadvantaged individuals shall be deemed to include
women
As a result of the above, EPA is required to establish a minimum eight
percent goal on all procurements emanating from any grant, cooperative
agreement or loan awarded during FY-91. This will, of course, also
include £ay new procurement undir FY-91 grant amendments which involve
the use of additional Agency funds.
fruatd M Kteyeltd Faptr
-------
- 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
dlsadvantaged (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 repot"- upon
conclusion of the fiscal year, the Agency's efforts in achieving the minimum
8 percent level.
A review of all program activities should be undertaken to determine the
extent in which the 8 percent goal for disadvantaged businesses may impact
your programs. A special attachment has been prepared to assist you in
assuring that you have considered all aspects on the Impact of this
section of current law on EPA's procurement under assistance programs.
All of the requirements cited in the attachment are effective as of
October 1, 1990.
I am positive that each of you will join me in making a firm commitment
to enhance the utilization of dlsadvantaged businesses, including the Histori-
cally Black Colleges and Universities in all Agency programs. Working together
we can achieve a more equitable distribution of Federal dollars to the benefit
of the underutilized segment of our Nation's economy.
The Office of Small and Dlsadvantaged Business Utilization (OSDBU)
IB 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
-------
U.S. ENVIRONMENTAL PROTECTION AGENCY
Disadvantaged Business Enterprise Program Plan
Financial Assistance Programs
I. BACKGROUND.
Under che authority of Executive Orders 11625, 12432 and 12138, the
Agency established annual objectives for minority and women-owned businesses.
These objectives are accomplished by mandating that the recipient and the
prime contractor carry out six affirmative steps if any subcontracting was
to be performed.
The Executive Orders also provided the authority for the Agency to require
quarterly reporting from the States and local governments to inform the Agency
how well they were doing in meeting their "Fair Share" objectives.
Prior to Fiscal Year 1991, the Environmental Protection Agency's (EPA's)
"Fair Share" policy for utilization of small, minority and women-owned busi-
nesses applied to State and local governments only and did not affect univer-
sities, colleges, hospitals and other non-profit institutions which came under
the purview of OMB Circular A-110. Under that Circular institutions of higher
education and other non-profit organizations had only to exert "positive efforts"
in their attempts to utilize small and minority businesses. 'iditionally, all
of the non-profit institutions and universities were exempt f: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's FY-1991 Appropriations Act, Congress requires EPA to ensure, to
the fullest extent possible, that at least 8 percent of Federal funding for
prime and -subcontracts awarded in support of authorized EPA programs for FY-91
go to businesses or other organizations owned or controlled by socially and
economically disadvantaged individuals (see VII. "definition"). Accordingly,
any grant, cooperative agreement or loan awarded by EPA in FY-91 must stipulate
that a minimuz: objective of 8Z 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.
Scate government agencies receiving EPA funding will be required to establish a
minimum 8% "Fair Share" objective for disadvantaged business utilization in
contracting for goods and services in their grants, cooperative agreements and
-------
loans, including State Revolving Fund (SRF) loans. Likewise, institutions
of higher education, hospitals and other non-profit organizations receiving
grants, cooperative agreements or loans, including those for research and
development (other than research awards under the Clean Air Act) will be subject
to the same requirement; "positive efforts" (as required in OMB Circular A-110)
for the utilization of small businesses and minority businesses are not suf-
ficient to meet the requirement of P.L. 101-507.
The Appropriations Act specifically includes Historically Black Colleges
and Universities (HBCUs) as pare of the definition of DBEs. Therefore, EPA
will require that all recipients, including institutions of higher education,
include HBCUs, in their definition of DBEs.
The following is taken verbatim from P.L. 101-507 signed by the President
on November 5, 1990. The Administrative Provisions contains the following
language:
"The Administrator of the Environmental Protection Agency
shall, to the fullest extent possible, ensure that at least 8
percentum of Federal funding for prime and subcontracts awarded
in support of authorized 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 its "Fair Share" policy
in FY-1991.
V. POLICY.
It is EPA policy that recipients of EPA financial assistance awards utilize
the services of DBEs to the maximum extent practicable. P.L. 101-507 establishes
a minimum objective of 8% of total contract and subcontract awards. It is EPA's
policy that such business entities be afforded the maximum practicable opportunity
to participate as contractors, subcontractors, suppliers and otherwise in EPA
awarded financial assistance programs. This policy applies to all contracts and
subcontracts for s'upplies, construction, equipment and services under EPA grants,
cooperative agreements or loans awarded in FY-91. For the SRF program, the policy
applies to funds provided to States in Capitalization grant awards in FY-91.
Recipient's small purchases are also subject to this policy.
VI. OBJECTIVE.
The objective of the Disadvantaged Business Enterprise Program Plan is to
-------
- 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) (S) and (6)). Sections 8(a) (5) and (6) are cited below:
1. Socially disadvantaged individuals are those who have been
subjected to racial or ethnic prejudice or cultural bias because of their
identity as a member of a group without regard to their individual qualities.
(Section 8(a) (5)).
2. Economically disadvantaged individuals are those socially disad-
vantaged individuals whose ability to compete in the free enterprise system has
been impaired due to diminished capital and credit opportunities, as compared
to others in the same business area who are not socially disadvantaged. In
determining the degree of diminished credit and capital opportunities, the
Small Business Administration shall consider, but not be limited, to the assets
and net worth of such socially disadvantaged individuals. In determining the
economic disadvantage of an Indian tribe, the Small Business Administration
shall consider, where available, information such as the following: The per
capita income of members of the tribe excluding judgement awards, the 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 UBCUs
are identified by the Department of Education Listing of Minority Colleges
and Universities. The authority vested in the Department of Education by
law and Executive Order 12320 dated September 15, 1981, is included as
Attachment No. 1. For purposes of the above cited documentation the Depart-
ment of Education recognizes HBCUs as any institution established prior to
-------
1964. A copy of Che listing of predominantly minority institutions,
including HBCUs is included as Attachment No. 2.
C. Plan. EPA's proposed program of action for the utilization of DBEs
in financial assistance programs. The Plan will contain, as a minimum,
methods for encouraging grant recipients and their prime contractors to
utilize DBEs.
D. Financial Assistance. The term financial assistance is synonymous
with "grant-making" in the Act, and is meant to include any Federal support
whenever the principal purpose of the relationship is the transfer of money,
property, services, or anything of value to a State or local Government, or
other recipient, in order to accomplish a public purpose of support or
stimulation authorized by Federal Statute.
E. Goal. The use of the term goal or goaling is to be used synonymously
with "Fair Share" objective. A recipient's minimum objective will not be less
than 8% of all extramural funds contained in the award document. Recipients
must establish a separate "Fair Share" objective for both minority business
enterprises (MBEs) and women-owned businesses (WBEs). HBCUs will be included
in the MBE objective.
VIII. THE DISADVANTAGED BUSINESS ENTERPRISE PLAN FOR FINANCIAL ASSISTANCE
PROGRAMS.
A. The Plan. EPA's plan is to require that each financial assistance
agreement awarded by EPA in FY-91 contain a requirement for a minimum goal of
8% for DBEs. In order to accomplish this goal, States will have to look more
closely at their overall spending with respect to extramural funds and to plac
greater emphasis on projects where the chances to exceed the minimum can be ex-
pected. This will allow the recipient to lower their goal on projects having
few or no qualified DBEs available to perform the work; conversely, it will re-
quire higher goals being established in areas having substantial qualified DBEs.
Recipients below the State level must use their resources wisely in order to
meet the minimum 82 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 82 for
the utilization of DBEs, including HBCUs, in the award of prime and subcontracts.
However, in the SRF program, State selected equivalency loans resulting from a
Capitalization grant awarded in FY-91 are used to comply with the overall negoti-
ated "Fair Share".amount for that grant. The SRF program also is discussed sep-
arately below.
Programs which primarily place work with institutions of higher
education can achieve their 82 goal by utilizing HBCUs either on a direct
basis, as part of a consortium or as a subcontractor. If an HBCU receives an
award as a recipient or as part of a consortium, a negotiated "Fair Share"
objective must be established by the HBCU or the consortium.
-------
- 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
contracts and subcontracts be placed with DBEs.
3. State Grants, Cooperative Agreements and Loans. States receiving
grants, cooperative agreements or loans must include as a minimum an objective
of 8% of all extramural funds will be placed with DBEs.
4. Local Level Grants, Cooperative Agreements, and Loans. Local units
of governments receiving grants, cooperative agreements and loans to local **e-
cipients must include as a minimum objective that 8% of all extramural funds
will be placed with DBEs.
5. Research and Development Programs. All universities, colleges,
hospitals and other non-profit organizations receiving R&D funds or any other
Agency funds will have a minimum objective of 82 for DBEs, including HBCUs, in
the award of prime and subcontracts. (Except for research awards under the
Clean Air Act).
6. "Fair Share" Objectives. The Award Official or his designee will
negotiate a "Fair Share" objective with the recipient. "Fair Share" objectives
should be negotiated to a level that is achievable; however, the floor of
any objective shall be at least 8%. On programs which have Statewide application,
e.g., SRF or Superfund, the recipient may apply the "Fair Share" objective on a
Statewide basis. This provides the State some flexibility in the "Fair Share"
objective of each grant; in some cases, especially in areas having few qualified
DBEs available to perform the work, the State may elect to set a lower target
for participation; however, in areas having a substantial number of qualified
DBEs available a greater target for participation would be required in order
for the the State to meet an overall minimum 82 goal objective. The Agency
strongly encourages maintenance of effort provisions where previous "Fair
Share" accomplishments have exceeded the statutory level.
7. Bidding Requirements. States and/or recipients are required to
include in their bid documents the negotiated "Fair Share" objectives separated
into two categories, i.e., MBEs, (including HBCUs) and WBEs. Additionally,
prime contractors are to include in their bid documents the recipient's "Fair
Share" objectives.
8. To comply with this policy, recipients of assistance awards and
their prime contractors must comply with the following affirmative steps before
a contract is awarded:
^
a. placing DBEs on solicitation lists;
b. making sure that DBEs are solicited whenever they are potential
sources;
c. dividing total requirements, when economically feasible, into
small tasks or quantities to permit maximum participation by DBEs;
d. establishing delivery schedules, where the requirements of work
will permit, which would encourage participation by DBEs;
e. using the services of the Small Business Administration and the
Minority Business Development Agency of the U.S. Department of Commerce,
as appropriate; and
-------
- 6 -
f. requiring the contractor to take the affirmative steps in
subparagraphs a. through e. of this part if subcontracts are awarded.
9. SRF equivalency loans are subject to EPA's "Fair Share" objective,
which is a minimum of 8%, and must comply with the requirements of paragraph B.7.
above. SRF equivalency loans are those identified as such by the State and which
equal the total amount of the Capitalization grant. States should not count re-
financing projects toward meeting their "Fair Share" objective except in unusual
cases. In such cases, prior approval must be obtained from OSDBU and the Head-
quarters program office. If a State accomplishes its "Fair Share" objective by
requiring only certain equivalency projects to undertake the six affirmative steps,
other SRF equivalency projects are not required to undertake them. A State may,
however, require such other SRF equivalency projects to do so. That is the
State's prerogative and not EPA's.
10. All actions taken in carrying out the affirmative steps [see 40 CFR
§33.240, §31.36(e), §35-6580(a) and §35.3145(d)] must be fully documented and
retained in the official files.
C. Agreement Conditions. All EPA grants, cooperative agreements and loans,
made in FY-91 must contain a condition requiring recipients to meet the require-
ments of the Act. Citation of the "Fair Share" objectives for HBEs (including
HBCUs) and WBEs must be inserted as well as the total "Fair Share" objective in
the condition. These conditions are retroactive to October 1, 1990. SRF condi-
tions are cited in c* and d. below:
1. "Fair Share" Conditions.
a. If the Award Official or his designee HAS NEGOTIATED a "Fair Sv
with the recipient, use the following condition or equivalent. The "Fair Share
must be at least 8Z.
"The recipient must ensure to the fullest .extent possible that at
least (insert the negotiated "Fair Share" percentages) of Federal
funds for prime contracts or subcontracts for supplies, construc-
tion, equipment or services are made available to organizations
owned or controlled by socially and economically disadvantaged indi-
viduals, women and historically black colleges and universities.
The recipient agrees to include in its bid documents a (insert the
negotiated "Fair Share" percentages) and require all of its prime
contractors to include in their bid documents for subcontracts
a (insert the negotiated "Fair Share" percentages) "Fair Share"
percentage.
To evaluate compliance with the "Fair Share" policy, the recipient
also agrees to comply with the six affirmative steps stated in 40
CFR §33.240, §31.36(e) or §35.680(a), as appropriate."
b. If the Award Official or his Designee HAS NOT NEGOTIATED a "Fair
Share" with the recipient, use the following condition or equivalent. The "Fair
Share" must be at least 8Z;
"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 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 82:
"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,
equipment or services are made available by the State and/or SRF
assistance recipient to organizations owned or controlled by socially
and economically disadvantaged Individuals, women and historically
black colleges and universities."
The recipient agrees to select certain equivalency projects to achieve,
to the fullest extent possible, the State's "Fair Share" objective and
to require those selected equivalency projects to comply with the six
affirmative steps. The recipient agrees to require (and to assure
that the selected assistance recipients also require) that all prime
contractors include in their bid documents for subcontracts the (insert
the negotiated "Fair Share" percentage) "Fair Share" percentage.
d. If the Award Official or his designee HAS NOT NEGOTIATED a "Fair
Share" with the recipient for Capitalization grants use the following condition or
equivalent. The "Fair Share" for these grants must be at least 82;
"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
-------
- 8 -
affirmative steps. The recipient agrees to require (and to assur*-
that the selected assistance recipients also require) that all p;
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 requjre-
ments, i.e., a., b., c. or d.:
a. For Project Grant Recipients (except Institutions of Higher
Education and Other Non-Profits) and Loan Recipients;
"The State and/or recipient agrees to submit a SF-334 "MBE/WBE
Utilization Under Federal Grants, Cooperative Agreements, and other
Federal Financial Assistance", to the EPA award official beginning
with the Federal fiscal year quarter the recipient awards its first
contract and continuing until all contracts and subcontracts have
been reported. These reports must be submitted to the award official
within 30 days of the end of the Federal fiscal quarter (January 30,
April 30, July 30 and October 30)."
b. For Continuing Environmental Program Grants;
"The State and/or recipient agrees to submit a SF-334 "MBE/WBE
Utilization Under Federal Grants, Cooperative Agreements, and other
Federal Financial Assistance", to the EPA award official within 30
days of the end of each Federal fiscal year, i.e., by October 30th
of each year."
c. For Grants to Institutions of Higher Education and Non-Profits
"The State and/or recipient agrees to submit a SF-334 "MBE/WBE
Utilization Under Federal Grants, Cooperative Agreements, and other
Federal Financial Assistance", to the EPA award official within 30
days of the end of each Federal elscal year, i.e., by October 30th
of each year.
D. Responsibilities.
1. The OSDBU will provide copies of the approved Plan to all Program
and Regional offices associated with financial assistance programs.
2. Award Official or their designee will negotiate a "Fair Share" objec-
tive for each program. The negotiated "Fair Share" objective will Include separate
objectives for MBEs, (including HBCUs), and WBEs. Negotiated objectives should be
developed on the basis that the minimum can be no less than 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 (GMOs) 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:
-------
- 9 -
a. Ensure chat the State or recipient is fully cognizant of the
requirements of this Plan and the necessity for compliance.
b. Follow-up with recipients if they do not submit the MBE/WBE Report.
4. The GMOs. GMOs will:
a. Include the appropriate condition in this policy (VIII.C.)
b. Assuring the timely receipt of quarterly and/or annual reports
as required by the Conditions. Reports are due within 30 days after the close
of each Federal fiscal quarter or fiscal year, as the the case may be.
5. Reporting. Reporting will be carried out by any entity receiving
EPA funds. Universities, Hospitals and other Non-Profit Institutions, which were
formerly not required to report are now required to report in order for the Agency
to determine if it has met the 8% goal for each EPA-funded program. No waivers
will be approved for reporting requirements. Quarterly or annual reporting will be
conducted by using the Standard Form 334.
6. The Clean Air Act Research Grants. The 8 percent goal for the utili-
zation of DBEs in EPA-funded procurement under assistance programs applies to
all programs, except for research awards funded under the Clean Air Act. The Clean
Air Act Amendments requires a 10% goal for research programs awarded by EPA for
DBEs. This requirement will be addressed under separate cover.
2 Attachments
-------
APPENDIX N
CLOSEOUT POLICY
-------
AUG 2 7 1992
MEMORANDUM
SUBJECT: Final Closeout Policy For Assistance Agreements
FROM:
TO:
Harvey G. Pippen, Jr., DirectoJ's"c- by
Grants Administration Divisiorfcou^oi/oran fof
Assistant Regional Administrators
Grants Management Offices
Regions I-X
Millie Lee, Chief, Grants Operations Branch
Carlene Foushec, Acting Chief, Grants Information and
Analysis Branch
We are pleased to issue the attached final Closeout Policy.
This policy establishes EPA's closeout requirements for closing
out completed grants and cooperative agreements and deobligating
unliquidated obligations for all of EPA's assistance programs.
This policy represents the combined efforts of all of the members
of the Closeout/Deobligation task force over the past year. We
greatly appreciate their time and many contributions in developing
this policy document.
We strongly encourage you to use the policy and again
emphasize the importance of continuously closing out completed
projects and deobligating unliquidated obligations in a timely
manner. Closeout is an essential function of prudent grants
administration.
Finally, we ask that you develop your own specific Regional
(or 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
-------
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
Pan III: Program Specific Requirements
A. State Revolving Fund Program
B. Superjund
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
-------
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 Pan 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 actions:
• 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.
-------
PART H BASIC CLOSEOUT REQUIREMENTS FOR GRANTS AND
COOPERATIVE AGREEMENTS
A. Roles and Responsibilities
This section outlines the basic closeout roles and responsibilities of the Recipient, the
Program Office, the Grants Management Office (GMO) and the Financial Management Office
(FMO).
Recipient
1. Complete all work satisfactorily and timely as specified in the assistance agreement.
2. Submit the following required reports to EPA within 90 days after the project completion
date:
o Final Technical Report
o Final Financial Status Report (Standard Form 269 or 269A)
o Federally Owned Property Report, if applicable
o Invention Disclosure Report (EPA Form 3340-3), if applicable
o Final Request for Payment (Standard Form 270), if applicable
o Final EPA ACH Payment Request, if applicable
o Outlay Report and Request for Reimbursement (Standard Form 271), if
applicable
o Property Inventory of all Federally Owned Property, if applicable
o Final Minority Business Enterprise/Women Business Enterprise Report (Standard
Form 334), if applicable
3. Submit a written request to EPA's award official to request an extension of time to the
90 day period required for submittal of the FSR (or other required reports), along with
a justification for the extension.
4. Submit all manuals, plans, specifications, data, or other deliverables as required in the
assistance agreement to EPA, or make the deliverables available for EPA inspection.
The Program Office (Project Officer)
1. Review and approve all technical reports, including final technical/performance reports
in accordance with the requirements of the award and the statement of work.
-------
2. Ensure that any/all deliverables required under the award are received when required by
the award, and are acceptable.
3. Certify to the GMO within 90 days of completion of the project that all work has been
satisfactorily completed. For continuing programs, specific work elements may be
carried forward and funded in the next year provided the recipient submits an application
with an acceptable workplan. For additional information, refer to Comptroller Policy
Announcement N. 88-09, "Disposition of Unobligated Balance of Assistance Awards."
4. Certify to the GMO within 90 days of project completion that all tehnical (programmatic)
award conditions have been met.
The Grants Management Office (GMO)
1. Ensure receipt of final certification of project completion from the project officer, receipt
of all required reports including the final FSR, MBE/WBE, invention disclosure, and
Federally owned property reports, and compliance with all terms and conditions of the
grant.
2. Provide property disposition instructions (as necessary) to recipients, and ensure
receipt/acceptability of property inventory report; and ensure reimbursement to EPA of
its proportionate share of equipment or supply inventories, if applicable.
3. Receive and approve the Final Financial Status Report (except for construction grants)
and:
o ensure timely receipt and distribute copies to program and finance offices as
necessary;
o review and analyze FSR's contents, including recipient's cost share;
o maintain/update current information in the Grants Information and Control System
(GICS), i.e., FINANCIAL-STATUS-CODE, FINANCIAL-STATUS-DATE, and
ACTION-CODE;
o ensure that financial data on FSR is reconciled with the Integrated Financial
Management System (IFMS);
o determine allowability of any reported indirect costs based on the provisions of
the assistance agreement and the final negotiated indirect cost rate;
o determine amount of any unliquidated obligations and/or funds owed to EPA by
the recipient and provide instructions to the FMO for the disposition of those
funds.
-------
5
4. Request final audit (if applicable and required for closeout)
5. Prepare close-out amendment.
o Ensure receipt of request for final payment; review and approve appropriateness
of such payments and notify the FMO to process or deny the payment.
o Ensure compliance with Agency's carryover policy.
o Ensure that the FMO makes necessary adjustments to IFMS and deobligates
any unliquidated obligations as appropriate.
o Complete Assistance Adjustment Notice (EPA Form 5700-42) or Assistance
Amendment and distribute to FMO and Program Offices.
6. Prepare close-out letter
o Issue final close-out letter to recipient and provide copies to the appropriate
Project Officer and FMO.
7. Retire file and follow appropriate record retention requirements. (See page 11, Part IV)
Financial Management Office (FMO)
1. Assist GMO in reconciling IFMS data with reported FSR data.
2. Review close-out amendment and either deobligate any unliquidated
obligations, or bill the recipient for any funds due 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
-------
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
-------
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 Davs after Completion
The recipient will submit final progress (technical) reports to the Project Officer 90 days
after the project's completion or end date, whichever comes first and notify the GMO of
their receipt and acceptability. Other reports, including the final Financial Status
Reports, are also due within 90 days, and should be submitted to the Grants Specialist.
The Grants Specialist will then review those projects that have overdue reports (over 90
days) and determine whether another followup letter should be sent to the recipient. This
letter must be tailored to address specific deficiencies of the project, e.g., what required
deliverables were not received and are overdue? A copy of this letter should also be sent
to the FMO\PO.
120 Days after Completion
If the recipient has not provided the information required for closeout 4 months after
completion of the project, the Grants Specialist should confer with the Project Officer
and send another follow-up letter. This letter shall be signed by the RA/ARA or
Director, GAD (for headquarters projects), and addressed to the head of the recipient
organization, with a copy to the FMO\PO. It should provide a chronology of earlier
efforts to obtain the materials required by the agreement, enclose a copy of previous
reminders and follow-up correspondence, and establish a specific date (suggest 2 to 3
weeks) for receipt of a response.
-------
8
180 Davs after Completion
Closeout should be completed within 6 months (180 days) after the end of the agreement.
When closeout has been completed, the Award Official should provide the recipient with
the closeout letter or a letter of final determination, with copies to the FMO and PO.
(See Disputes Section in Part V)
Part 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 [CWA
Tide VI, §606(e)]t and by receiving audits of the program [CWA Title VI, §606(b)]. 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 grant, the GMO, in
conjunction with the Project Officer (the SRF Coordinator) would follow the requirements as
specified in Part H.
B. Superfund
The following are the additional steps each GMO must follow in closing out a Superfund
Cooperative Agreement. Superfund recipients are usually States, Political Subdivisions, or
Federally Recognized Indian Tribes, and the closeout procedures in this section apply to these
'For example, a Region may decide to closeout a capitalization grant before an equivalency
project has met all of its equivalency requirements [Sixteen Title n requirements CWA, Title
VI §602(b)(6)].
-------
recipients. Recipients of other Superfund grants, such as; Research and Development; and
Technical Assistance Grants (TAG), follow the closeout requirements for project-specific grants.
Superfund Cooperative Agreements
Superfund response Cooperative Agreements (CAs) provide funding from EPA to conduct
the response activity at a Superfund site. These CAs can provide funding for the following types
of activities:
Pre-Remedial Activities
Remedial Response
Activities
Other Activities
Preliminary Assessment
(PA)
Site Investigation (SI)
Hazardous Ranking System
(HRS)
Remedial Investigation (RI)
Feasibility Study (FS)
Remedy Selection/Record of
Decision (ROD)
Remedial Design (RD)
Remedial Action (RA)
Removal Program
Core Program
'Enforcement
Support Agency
In a Superfund CA, closeout of the CA usually occurs when all work, as specified in the
scope of work, has been completed. Due to the complexity and "umbrella-like" structure of
Superfund CAs, closeout can often become an unduly complicated situation, with many activities
taking place over extended periods of time. To improve our management of Superfund CA
closeout, it is desirable to close out each diverse activity or operable unit as it is completed. As
each activity or operable unit is completed, the activity would be designated as an "Activity
Completion" and the same steps in the closeout process would be followed. In the case of a
pre-remedial or a remedial CA, as each activity (or operable unit) is completed, activity
completion (or operable unit completion) should take place for that discrete activity. This
approach is a more manageable way to ultimately achieve closeout of the entire agreement.
Since many Superfund CAs last for many years and may include more than one site, it
is important to initiate completion by activity, site, or operable unit. This will simplify the
administrative closeout process later on when the entire agreement is closed out, and will help
the cost recovery effort which may begin before all activities at the site are complete or when
all sites under the multi-site are complete.
-------
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 COMPLET1ON/CLOSEOUT MILESTONES
Physical Completion: When the scope of the work is completed. For Steps 1 & 2,
project completion and physical completion are synonymous. (For steps 2+3, 3, 7 & 9
project completion, physical completion, and construction completion are synonymous.)
Initiation of Operations (IO): When the wastewater treatment works becomes capable of
operating for the purposes planned, designed and built. (Steps 3, 2+3, 7 & 9)
Project Performance Certification: One year after IO, the grantee certifies that the
treatment facility is meeting project performance standards. (Steps 3, 2+3, 7 & 9)
Please note that the project cannot be sent to audit until the certification is received.
-------
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 all
appropriate records until these actions are completed and all issues resolved. The retention
period starts on the day the recipient submits its final Financial Status Report. A recipient may
always choose to implement stricter or longer retention periods to meet their own needs. For
construction grants, the retention period starts the day the grantee submits the final payment
request. For the SRF Program, official records include copies of the State/EPA agreements,
SRF Intended Use Plans, SRF Operating Agreements, SRF Annual Reports, and SRF Program
Evaluation Reports. Only the grant agreement can be retired after grant closeout. All other
documents must be retained for Program Management purposes.
-------
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 Reports and Followup Actions) states that
audit resolution must occur within ISO days of the final audit report issuance. Resolving audit
findings, issues or exceptions is a multi-step process involving many different offices. Audits
which cannot be resolved at the Regional or Headquarters level between the OIG and the Audit
Action Official are referred to EPA's Audit Resolution Board.
EPA relies primarily on Single Audits of recipients carried out in accordance with the
requirements of the Single Audit Act and Federal Audit policy expressed in OMB Circulars A-
128 and A-133. Consistent with that policy, most assistance agreements will not receive
individual final audits. A final audit is usually not a prerequisite for closeout.
All Superfund Cooperative Agreements are subject to audit by the Office of Inspector
General. Projects may be audited prior to or even after closeout. The Program Office is usually
responsible for requesting an audit. Closeout of all completed phases of response activities
should be undertaken regardless of whether or not an audit is actually performed. However, any
-------
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;
-------
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 Pan V Audit Section). Inadequate
or incomplete audit resolution can increase the number of disputes filed by recipients.
Unresolved disputes further delay closeout of the award until the action or claim is settled.
-------
15
APPENDIX A
LISTING OF EXISTING EPA CLOSEOUT REGULATIONS, POLICIES, AND RELATED
GUIDANCE
(1) 40 CFR Pan 4 (Uniform Relocation Assistance), or 49 CFR Pan 24 if applicable;
(2) 40 CFR Pan 30 (for non-State and local government recipients);
(3) 40 CFR Pan 31 (for State and local governments);
(4) 40 CFR Pan 32 (Debarment and Suspension);
(5) 40 CFR Pan 33 (Procurement for non-State and local government recipients);
(6) 40 CFR Pan 34 (Restriction on Lobbying, interim final rule);
(7) 40 CFR Pan 35 (State and Local Assistance);
(8) 40 CFR Pan 40 (Research and Demonstration Grants);
(9) 40 CFR Parts 45 and 46 (Training and Fellowship grants);
(10) OMB Circulars A-102 (Grants and Cooperative Agreements to State and Local
Governments) and A-128 (Audits of State and Local Governments);
(11) OMB Circulars A-110 (Grants and Cooperative Agreements with Institutions of Higher
Education, Hospitals and Other Nonprofit Organizations), A-133 (Audits of Institutions
of Higher Education and Other Nonprofit Institutions), and A-21 (Cost Principles for
Universities;
(12) OMB Circulars A-87 (Cost Principles for State and Local Governments) and A-122
(Cost Principles for Nonprofit Organizations);
(13) Policy on Performance-Based Assistance (EPA policy memorandum dated May 31,
1985);
(14) Comptroller Policy Announcement No. 88-09 (Disposition of Unobligated Balance of
Assistance Awards);
(15) EPA Directive 2750 (Management of EPA Audit Reports and Follow-up Actions).
(16) Chapter 40 of EPA's Assistance Administration Manual
-------
16
(17) Construction grants Program For Municipal Wastewater Treatment Works Handbook of
Procedures
(18) CG-250, Managing Construction Projects Student Manual: and
(19) The Strategy Paper for Closing Out the Construction Grant Program, dated 10/90 and
formally released January, 1991.
-------
17
APPENDIX B
GICS DATA ELEMENTS FOR CLOSING OUT NON-CONSTRUCTION GRANTS
G1CS contains a series of data elements used to track grant closeout. This appendix
provides definitions and applicable codes for the most commonly used data elements.
Note: not all closeout data elements are available in RAGDS, FADS, or JAMS. It is
GAD's intention to revise the GICS Data Dictionary and appropriate screens in the
Automated Grants Document Systems to make all standard closeout data elements
universally available.
COMP-LTR-SENT-CODE/DATE
A code indicating the most recent completion/follow-up letter sent to the recipient
For purposes of Closeout the following codes are applicable:
A Pre-completion reminder mailed
B Completion reminder mailed
C Reminder(s) to signatory of agreement
D Warning to President/chief officer of recipient organization
X Final determination recommendation prepared by Grants Operations Branch and
forwarded for required approvals/concurrences
FINANCIAL-STATUS-CODE/DATE
A code indicating the status of the final financial status report (report of expenditures)
submitted by the recipient. The date 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
-------
18
PERS-PROPERTY-CODE/DATE
A code indicating the status of the personal property or equipment inventory purchased
under a grant. The date related to this code is contained in Personal Property Inventory
Date (Ref No L2-A, Pers-Property-Date).
For purposes of Closeout the following codes are applicable:
DI Disposition instructions issued; further action required
DW Disposition instructions being withheld by Grants Administration Staff
DX Disposition instructions executed/completed; no further property action required
NA Not applicable to this project
PD Project Officer provided disposition recommendation
PR Project Officer received report; Grants Administration staff awaiting disposition
recommendation
RF Received and forwarded to Project Officer
RN Received negative report
RP Received positive report
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 being 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.
-------
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
FINAL-REPORT-CODE/DATE
A code indicating the status of the final report. The date related to this code is
contained in Final Report Status Date (Ref No L8-A, Final-Report-Date).
For purposes of Closeout the following codes are applicable:
AA Report approved; confirmation in official project file; EPA Report Publication
Number assigned and recorded in Report Publication Number (Ref No 40-A,
Publication-No)
NA Not applicable to this project
PR Project Officer received report; awaiting peer review/approval; (Consider
applicability of entering code "FR" in Action Step Code (Ref No 23-A,
Action-Code) and date in Action Step Date (Ref No 24-A, Action-Date))
RF Received and forwarded to Project Officer
RU Received an unacceptable report; follow-up to recipient initiated
AUDIT-REQUEST-DATE
The date of the request for a financial audit of a non-Construction grant. Use of this
element is limited to grants meeting certain select criteria and is not applicable to Single
Audits. For Regions using Audit Request Code (Audit-Request-Code, Ref No N8-A),
this is the date related to the code contained in that element.
Positions 1-2 - Year
3-4 - Month
" 5-6 - Day
AUDITS-RESULTS-CODE
A code indicating the status of the completion of the financial audit of a
non-Construction grant. This element is not used for Single Audits. The date related
to this code is contained in Audit Completion Date (Ref No N9-A, Audit-Results-Date).
For purposes of Closeout the following codes are applicable:
-------
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
ACTTON-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 out: For EPA assistance agreements,
letter issued by EPA to the recipient closing out the agreement.
FD Project completion: For assistance programs administered in Headquarters, the
award official (Chief, Grants Operations Branch) has issued final determination
to the recipient.
FR Project close-out complete except for approval of final project report and final
disposition of property, if any. Applicable only to assistance programs
administered in Headquarters.
FT Assistance terminated by EPA before completion. Termination letter sent from
Grants Operations Branch or appropriate Regional grants administration staff to
the recipient.
-------
21
GIGS SCREENS FOR CLOSING OUT CONSTRUCTION GRANTS
Closeout milestones for construction grants are found on a number of different screens
in GICS. Screens include:
* Post Award/Targeting (PTN) which tracks the completion of certain activities
such as WWT Start, Initiation of Operation, development of the O&M Manual,
Initiation of Administrative Completion.
* Project Completion (PCN) which tracks a grant's progress through Physical
Completion and Administrative Completion.
* Payment Data (PDN) which tracks cumulative payment data.
Because Construction Grants is a delegated program, data entry can take place at the delegated
State or in the Regional office. Regional procedures vary greatly.
-------
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.
•US GOVERNMENT PRINTING OFFICE 1993-719-328-8001"
------- |