GRANT AND COOPERATIVE AGREEMEN1
DESK TOP RESOURCE
FOR
NON-PROFIT RECIPIENTS
October 23,2003
Washington, DC
WHO WE ARE
MANAGING YOUR AGREEMENT
COSTS PRINCIPLES
PAYMENTS
RECORD KEEPING
CLOSEOU
PROCUREMENT
RESPONSffilLn IES
Presented by:
US Environmental Protection Agency
Office of Grants and Debarment
http://www.epa.gov/ogd/
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INTRODUCTION
A large part of EPA's mission to protect the environment and public health is
accomplished by awarding extramural funds to other organizations to conduct
environmental programs or projects. When EPA transfers funds for a public
purpose, it uses a legal instrument called an assistance agreement, which may be in
the form of a grant or cooperative agreement. In fiscal year 2001, EPA awarded
$4.5 billion in assistance agreements to state and local governments, tribes,
universities nonprofit recipients, and other entities.
EPA's Environmental Statutes are the legal basis for funding assistance
agreements. EPA's assistance agreement programs are listed in the Federal Catalog
of Domestic Assistance (CFDA) maintained by the General Services Administration.
Currently, EPA has over fifty programs listed in the CFDA. The general public can
review the CFDA by logging onto the following website: http://www.cfda.gov/. A
copy of EPA's current CFDA grant programs are provided in this booklet.
EPA has eleven Grants Management Office (GMO). The Headquarters
GMO is located in Washington, DC and the other ten GMOs are located in EPA's
Regional Offices throughout the country. Each GMO has a website which is
accessible through the EPA's main website address at the following address:
http://www.epa.gov/
The purpose of this training seminar is to ensure that;
EPA's nonprofit recipient community understands the assistance agreement
regulations;
EPA's nonprofit recipient community understands how to manage assistance
agreements and;
EPA's nonprofit recipient community knows how to close out assistance
agreements.
Please share your comments and suggestions on this training program by
writing us at the following address:
US Environmental Protection Agency
Office of Grants and Debarment
Attn: Division Director, GAD - Mail Code 3903R
1200 Pennsylvania Avenue, NW
Washington, DC 20460
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Table of Contents
Page
EPA Organization Chart 1
GMO Organization Chart 2
Grant Award Activity Summary 3
Historical Information 5
OMB Circulars 8
Cross Cutting Public Policies 9
Lobbying and Litigation 10
Federal Grant and Cooperative Agreement Act of 1977— 14
\
Catalog of Federal Domestic Assistance..................»............................16
Competition t......23
MBE/WBE 29
Overview of the Award Document and Terms and Conditions.............37
Sample Award Document............... 39
DUNS Number 42
Responsibilities - Award Phase[[[43
Automated Standard Application for Payments....................................45
Procurement 47
Recipients Roles and Responsibilities during Post Award .....69
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EPA's Policy for Post Award Management 72
Basic Understanding of Recipients Financial 74
Management Requirements
Reports 76
Changes to Awards 78
Deviations ^81
Audits 82
Documentation 85
A-133 Single Audit 86
Closeout/Lobbying and Litigation Certification 89
Record Retention , *.........* 91
Recipient Roles and Responsibilities - Post Award 92
Supplemental Website Addresses . . .....94
Selected Items of Costs Table (A-122 and A-21) 95
Conference Guidance 100
US EPA Electronic Funds Transfer Payment Process Salmon Section
5700.5 EPA Order on Competition Blue Section
40 CFR Part 30 Regulations - Pages 1 - 39 Yellow Section
A-122 OMB Cost Principles Green Section
Glossary White Section
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Administrator
Deputy Administrator
Genera) Counsel
_L
Assistant Administrator
for Air and Radiation
J.
Assistant Administrator
for Enforcement and
Compliance Assurance
_L
Chief Financial Officer
J_
Assistant Administrator
for Administration and
Resources Management
Assist Administrator for
Prevention Pesticides
and Toxic Substances
Inspector General
Assistant Administrator
for
International Affairs
_C
Associate Administrator
for Policy, Economics
and Innovation
Assistant Administrator
for
Water
_L
Assistant Administrator
for Solid Waste and
Emergency Response
J.
Assistant Administrator
for Research and
Development
Assistant Administrator
for Environmental
Information
Region 1
Boston
Region 2
New York
Region 3
Philadelphia
Region A
Atlanta
Region 5
Chicago
Region 6
Dallas
Region 7
Kansas City
Region 8
Denver
Region 9
San Francisco
Region 1 0
Seattle
EPA's mission is to protect human health and to safeguard the natural environment
Through environmental statutes, EPA has nine program offices, that provide financial
support through assistance agreements.
The Office of Grants and Debarment within the Office of Administration and Resources
Management serves as the Agency's National Program Office for the management of all
assistance agreements.
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GMO
Region 1
Boston
Serves as EPA's National Program
Office for the Management of
Assistance Agreements
GMO
Region 2
New York City
GMO
Region 3
Philadelphia
Office of Aquisition and
Resource Management
Washington, DC
Office of Grants and
Debarment
Grants Administration
Division
Washington, DC
GMO
Region 4
Atlanta
GMO
Region 5
Chicago
GMO
Region 6
Dallas
GMO
Region 7
Kansas City
GMO
Region 8
Denver
GMO
Region 9
San
Francisco
GMO
Region
10
Seattle
EPA's Grants Management Offices are responsible for all administrative
aspects associated with the review and negotiation of applications and
the award and administration of funded projects through audit
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GRANT AWARD ACTIVITY SUMMARY
C/)
o
.«2 Q
o
> »
S $3,000.0
$2,000.0
g $1,000.0
CD
$0.0
Dollars Awarded
By Recipient Type
FY1993-2002
FY1993 FY1995 FY1997 FY1999 FY2001
FY1994 FY1996 FY1998 FY2000 FY2002
X-Axis
State Governments
Local Governments
Tribes
Educational Institutions
Non-Profits
Other
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GRANT AWARD ACTIVITY SUMMARY
CO
CO
I
M—
O
CO
CO
CO
o
0
# of Awards
By Recipient Type
FY1993-2002
FY1993 FY1995 FY1997 FY1999 FY2001
FY1994 FY1996 FY1998 FY2000 FY2002
State Governments
Local Governments
Tribes
X-Axis
Educational
Institutions
Non-Profits Other
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General Information
Abbreviations and Acronyms
CFR = Code of Federal Regulations
CFDA = Catalog of Federal Domestic Assistance
F&A = Facilities and Administrative Costs
FSR = Financial Status Report
FY = Fiscal Year
GAO = General Accounting Office
GMO = Grants Management Officer
GMS = Grants Management Specialist
IG = Inspector General
OMB = Office of Management and Budget
PO = Project Officer
R&D = Research and Development
RFA = Request for Applications
RFIP = Request for Initial Proposals
USC = United States Code
Types of Fund-jng Instruments
Using a variety of funding instruments, including contracts,
grants, and cooperative agreements, the EPA accomplishes
much of its mission through services provided by non-
Federal entities. Each instrument has a specific purpose
and application, thus creating different relationships between the parties.
The Federal Grant and Cooperative Agreement Act of 1977 requires Federal
agencies to distinguish procurement relationships from assistance
relationships. Although the Act does not dictate any specific terms and
conditions that should be placed on contracts, grants, and cooperative
agreements, it does require that the choice and use of these legal instruments
reflect the type of relationship expected between the Federal and non-Federal
parties.
Grants and Cooperative Agreements
In contrast to contracts, grants and cooperative agreements are Federal
financial assistance mechanisms used to support and stimulate a public
purpose. Assistance relationships are established when the principal purpose
of the transaction is to transfer money, property, services, or anything of
value to a recipient to accomplish a public purpose or to stimulate a
particular area of interest authorized by law. The two types of assistance
mechanisms used by the EPA are the grant and the cooperative agreement:
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• Grants are used when: (l) no substantial programmatic involvement is
anticipated between the EPA and the recipient during performance of the
financially assisted activities, thus allowing the recipient significant
freedom of action in carrying out the assistance project; and (2) there is no
expectation on the part of the EPA of a specified service or end product
for use by the EPA.
• Cooperative agreements are used: (l) when the applicant is responding to
a specific EPA announcement for cooperative agreements and must tailor
the proposal to the announcement's requirements; and (2) when substantial
programmatic involvement is anticipated between the EPA ana the
recipient during the performance of the activities.
In the following pages of this publication, the word "grant" is used to indicate
an assistance mechanism and should be construed to include cooperative
agreements as well.
Grant Authorities
The Constitution
The requirements to which grants are subject have their
roots in a number of specific sources or authorities, the
broadest of which is the U.S. Constitution. Congress has
the authority to impose conditions upon the receipt of
\ Federal assistance funds. The cornerstone of Congress'
authority in the grants area is Article I, Section 8 of the
United States Constitution, referred to as the Spending
Power Clause, which provides that "...Congress shall have
power to lay and collect taxes, duties, imposts and excises, to pay the debts
and to provide for the...general welfare of the United States...."
Thus, Congress can enact statutes authorizing Federal agencies to award
grants and impose reasonable conditions on the receipt of Federal assistance
funds.
Laws that authorize the formulation of regulations for grant programs are
ultimately based on constitutional provisions. For example, the EPA grant
appeals procedures can be traced to the due process principles outlined in the
Constitution under the Fifth Amendment. Another example is the grant
application form, which contains provisions relating to civil rights,
handicapped individuals, and age and sex discrimination. These are all
extensions of constitutional requirements for equal protection under the law
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covered in the 14th Amendment to the U.S. Constitution.
.utes
The next broad level of Federal grant lawmaking is the
enactment of specific laws by Congress. Two of the most general, but
nonetheless most important, are authorizing legislation and appropriation
legislation. The authority to award grants is contained in the basic
substantive legislation establishing a Federal program. Such legislation may
authorize program expenditures for a specific or indefinite number of years.
Subsequent to the enactment of authorizing legislation, Congress generally
enacts appropriation laws permitting funds to be obligated for a specific
program. Appropriation bills begin in the House of Representatives and then
are acted upon by the Senate. Through the appropriation process, Congress
greatly influences both program and grants administration decisions by
controlling the amount of funds authorized annually, and by setting
conditions on the use of funds.
rim T _
Regulations
Because the language of many laws is vague, Federal agencies often need to
publish regulations to clarify the details. A "rule" or "regulation" is a formal
document issued by a Federal agency that has general or particular
applicability and legal effect. Compliance with Federal regulations and
statutes must be taken seriously. When finalized, regulations have the full
force and effect of law.
The Code of Federal Regulations (CFR)
(http'//www.gpo.gov/nara/cfr/index.html), a codification of permanent rules
published in the Federal Register, contains the regulations for reviewing and
administering EPA grants. Program regulations expand on program
legislation to provide additional guidance regarding program requirements
and how the program will be managed. (Some programs have guidelines
instead of, or in addition to, regulations.) Three of the most important
sections pertaining to EPA grants are:
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• 40 CFR Part 30(Uniform Administrative Requirements for Grants and
Agreements with Institutions of Higher Education, Hospitals and Other Non-
Profit Organizations; and
• 40 CFR Part 35 State and Local Assistance
• 40 CFR Part 31 (Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments) for administrative
regulations.
OMB Circulars
In addition to the provisions of authorizing legislation and implementing
regulations, the Office of Management and Budget (OMB) issues
Government-wide circulars for managing grants that apply to all Federal
executive agencies. When these agencies are required to apply the directives,
the effect on grantees is often the same as regulation. Among the circulars
relevant to grants administration are those that have to do with
administrative requirements, cost principles, and audits.
Administrative Requirements
• A-102 (rev.) Uniform Administrative Requirements for Grants to State and
Local Governments (also known as the Common Rule). Establishes
consistency and uniformity among Federal agencies in the management
of grants and cooperative agreements with State, local, and federally
recognized Indian tribal governments.
• A-110 (rev.) Uniform Administrative Requirements for Grants With
Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations. Establishes consistent and uniform grants administration
requirements placed by Federal agencies on non-profit organizations
other than State and local governments.
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Cost Principles
• A-21 (rev.) Cost Principles for Educational Institutions. Establishes
principles for determining costs applicable to grants, contracts, and other
agreements with educational institutions.
• A-87 (rev.) Cost Principles for State, Local, and Indian Tribal
Governments. Establishes standards for determining costs for Federal
awards carried out through grants, cost reimbursement contracts, and
other agreements with State and local governments and federally recognized
Indian tribal governments.
• A-122 (rev.) Cost Principles for Non-Profit Organizations. Establishes
principles for determining costs applicable to non-profit organizations.
Audits
• A-133 Audits of States, Local Governments, and Other Non-Profit
Organizations (rev.). Establishes consistent and uniform audit requirements
and defines Federal responsibilities for implementing and monitoring
such requirements for States, local governments, and other nonprofit
organizations receiving Federal awards.
Agency Implementations
In addition to issuing regulations to specify details of the enabling statutes,
agencies often find it helpful to publish handbooks, guidelines, or manuals.
Cross-Cutting Public Policies
There are cross-cutting public policy requirements applicable to Federal
grants, including those awarded by the EPA. The term "public policy"
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indicates that the requirement is based on social, economic, or other
objectives or considerations that may be attached to the expenditure of
Federal funds by grantees, consortium participants, and contractors, in
general, or may relate to the expenditure of Federal funds for research or
other specified activities. In addition to cross-cutting requirements that apply
to Federal agencies and their grant programs, EPA grantees are subject to
requirements contained in EPA's annual appropriations acts that apply to the
use of EPA grant funds. Some of those requirements are included here
because they have been part of appropriations acts for several years without
change, but those requirements may be changed or other requirements may
be added in the future. The EPA intends to uphold high ethical, health,
environmental and safety standards in both the conduct of the assistance it
funds and the expenditure of public funds by its grantees. The public policy
requirements specified in this section set many of those standards. The
signature of the authorized organizational official on the application certifies
that the organization is in compliance with, or intends to comply with, all
applicable certifications and assurances referenced (and, in some cases,
included) in the application package. Some of these include the following as
discussed in this section-
• Lobbying (Anti -Lobbying) (40 CFR Part 34) Recipients of
Federal grants, cooperative agreements, contracts, and loans
are prohibited by 31 USC 1352, "Limitation on Use of
Appropriated Funds to Influence Certain Federal Contracting
and Financial Transactions," from using Federal (appropriated)
funds to pay any person for influencing or attempting to
influence any officer or employee of an agency, a Member
of Congress, an officer or employee of Congress, or an employee
of a Member of Congress with respect to the award, continuation, renewal,
amendment, or modification of any of these instruments. These requirements
are implemented for EPA in 40 CFR Part 34, which also describes types of
activities, such as legislative liaison activities and professional and technical
services, which are not subject to this prohibition.
Applicants for EPA awards with total costs expected to exceed $100,000
are required to certify that (l) they have not made, and will not make,
such a prohibited payment, (2) they will be responsible for reporting the
use of non-appropriated funds for such purposes, and (3) they will
include these requirements in consortium agreements and contracts
under grants that will exceed $100,000 and obtain necessary certifications
from those consortium participants and contractors. The signature of the
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authorized organizational official on the application serves as the required
certification of compliance for the applicant organization. EPA appropriated
funds may not be used to pay the salary or expenses of an employee of a
grantee, consortium participant, or contractor or those of an agent related to
any activity designed to influence legislation or appropriations pending before
Congress or any State legislature.
• Civil Rights (40 CFR Part 7) The Civil Rights Act of 1964, Title VI,
requires that no person in the United States shall, on the basis of race,
color, or national origin, be excluded from participation in, be denied the
benefits of, or be subjected to discrimination under any program or
activity receiving Federal financial assistance. The EPA implementing
regulations are codified at 40 CFR Part 7.
• Debarment (40 CFR Part 32) This action is taken by a debarring official in
accordance with Federal agency regulations implementing Executive Order
12549 to exclude a person or organization from participating in transactions.
Grantees may be debarred or suspended if they are found to have seriously
and willfully not complied with grant conditions or are found to have engaged
in scientific misconduct. If debarred, a grantee may not receive Federal
assistance funds and may not participate in covered transactions for the
period covered by the debarment.
• Drug-Free Workplace (40 CFR Part 32, Subpart F) The Drug-Free
Workplace Act of 1988 (Public Law 100-690, Title V, Subtitle D, as
amended) requires that all organizations receiving grants from any
Federal agency agree to maintain a drug-free workplace. Under this law,
employees of grantees are prohibited from engaging in the unlawful
manufacture, distribution, dispensing, possession, or use of a controlled
substance at work. By signing the application, the authorized organizational
official agrees that the grantee will provide a drug-free workplace and will
comply with requirements to notify NCI in the event that an employee is
convicted of violating a criminal drug statute. Failure to comply with these
requirements may be cause for debarment. EPA implementing regulations
are set forth in 40 CFR Part 32, "Government-wide Debarment and
Suspension (Non-procurement) and Government-wide Requirements for
Drug-Free Workplace (Grants)."
• Sex Discrimination (40 CFR Part 5) Section 901 of Title IX of the
Education Amendments of 1972 (20 USC 1681), as amended, provides
that no person in the United States shall, on the basis of sex, be excluded
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from participation in, be denied the benefits of, or be subjected to
discrimination under any educational program or activity receiving
Federal financial assistance. The EPA implementing regulations are
codified at 40 CFR Part 5.
• Protection of Human Subjects (40 CFR Part 26) Protection of human
subjects, in accordance with 40 CFR Part 26, is required of all research
activities in which human subjects are involved. A human subject is
defined in 40 CFR Part 26 as "a living individual about whom an investigator
(whether professional or student) conducting research obtains (a) data
through intervention or interaction with the individual, or (b) identifiable
private information." The regulation also extends to the use of human organs,
tissues, and body fluids from individually identifiable human beings. There is
additional protection for certain classes of human research involving fetuses,
pregnant women, human in-vitro fertilization, and prisoners. The regulation
exempts certain categories of research involving human subjects (listed in 40
CFR Part 26.10l(b)) which normally involve little or no risk.
Notice of Grant Award
A
The grant award document is the official notification to the
applicant that a project has been funded. Each grant award
is authorized by statute. For example, in the sample grant award in this
manual the authorizing legislation is Clean Air Act, Section 103. Each award
also cites particular regulations that authorize its issuance. The final sources
of requirements imposed on projects supported by Federal grants are the
specific terms and conditions that are attached to an individual grant and
incorporated into the formal award document. These terms and conditions
may include the basic purpose of the award, policy statements, and OMB
Circulars. These latter materials may be incorporated by reference. By
accepting the award every grant recipient agrees to comply with everything
incorporated by reference on the award document.
Grantee Organization Responsibility
In applying for grant support, the grantee organization agrees to administer
any awarded grant in accordance with, the regulations and current policies
that govern the assistance programs of the EPA. Acceptance of an award
imposes upon the grantee organization and the project manager
responsibility for conducting the project and using grant funds prudently and
in accordance with cost principles, for the purposes set forth in the approved
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application. The grantee assumes responsibility for the fiscal and
administrative management of the project and fulfillment of any special
terms or conditions of award that may be prescribed for conducting the
project.
As noted under the previous section on "Notice of Grant Award," the grantee
indicates acceptance of the general and special provisions of an award by
signing and returning the award document. The grantee organization is not
required to guarantee the success of the project, nor are penalties generally
imposed for lack of success in attaining environmental outcomes. However, in
certain situations, EPA may take action to resolve problems or
weaknesses that arise during the course of the project (see
"Recipients Roles and Responsibilities during Post Award"
J ._x2~bs>—V_ section for further information).
Legal Implication of Application
The signature of an authorized organizational official on the application
indicates the organization's intent to comply with the laws, regulations, and
policies to which a grant is subject, including applicable public policy
requirements. That official is also attesting to the fact that the information
contained in the application is true and complete, and in conformance with
Federal requirements and the organization's own policies and requirements.
Applicants for and recipients of EPA grant funds, whether such funds are
received directly from EPA, indirectly under a contract agreement, or as
student assistance under a training grant, are responsible for and must
adhere to all applicable Federal statutes, regulations, and policies, including
income tax regulations. Questions concerning the applicability of income tax
regulations to grant funds should be directed to the Internal Revenue Service
(IRS). The applicant is also expected to be in compliance with applicable State
and local laws and ordinances.
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The Federal Grant and Cooperative Agreement Act of 1977
In the 1970's, Congress was concerned over the perceived misuse of
assistance agreements - using assistance agreements to circumvent
competition and procurement rules. To address these problems, and
to ensure uniform Agency practices, Congress passed the Federal
Grant and Cooperative Agreement Act of 1977 (FGCAA).
The FGCAA establishes government-wide criteria for determining the appropriate legal
instrument for funding an extramural activity.
The FGCAA distinguishes between acquisition (procurement/contracts) and assistance
(grants and cooperative agreements), based on the principal purpose of the legal
relationship between the parties.
If the principle purpose of the funded activity is t&proyide something for the direct
benefit or use of the Federal government, then a contract is the appropriate legal
instrument to use.
Benefit or Use Test:
Is EPA the direct beneficiary or use of the activity?
Is EPA providing the specifications for the project?
Is EPA having the project completed based on its own identified needs?'V
If the purpose of the funded activity is to support or stimulate activities that are not
for the direct benefit or use of the Federal government, an assistance agreement
(grant or cooperative agreement) may be use.
Support or Stimulation Test:
Is the applicant performing the project for its own purpose?
Is EPA merely supporting the project with financial or other assistance?
Is the benefit to EPA incidental (i.e., do funded activities compliment EPA's
mission)?
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The distinguishing factor between a grant and a cooperative agreement is the degree of
Federal participation or involvement during the performance of the work activities.
If EPA, usually the Project Officer, participates in project activities, then a cooperative
agreement is the proper funding mechanism.
If the funded activities meet the definition of assistance and no substantial involvement
by EPA is anticipated, a grant must be used to fund the project.
It should be noted that the FGCAA is not the legal authority by which EPA funds
assistance agreements. EPA's legal authorities are obtained from the environmental
statutes (Clean Air Act, Clean Water Act, etc.).
I
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Catalog of Federal Domestic Assistance (CFDA)
In 1977 Congress passed the Federal Program Information Act. This Act established a
comprehensive and centralized foundation for the annual publication of Federal domestic
assistance programs. The General Services Administration (GSA) maintains the federal
assistance information data base from which the CFDA is published.
The Catalog of Federal Domestic Assistance is a government-wide compendium of
Federal programs, projects, services, and activities which provide assistance or benefits to
the American public. It contains financial and nonfinancial assistance programs
administered by the departments and establishments of the Federal government.
The primary purpose of the Catalog is to assist potential applicants in identifying
programs which meet their specific objectives and to provide general information on
Federal assistance programs. The following pages provide a listing of EPA's current
programs followed by examples of program descriptions from the Office of Air and
Radiation and the Office of Water.
The CFDA website always contains the most current published information. The website
address is: http://www.cfda.gov
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CFDA: Programs Indexed by Independent Agency Page 1 of 2
ENVIRONMENTAL PROTECTION AGENCY
. OFFICE OF AIR AND RADIATION
o 66.001 Air Pollution Control Program Support
o 66..009 Air Information Center
o 66.032 State Indoor Radon Grants
o 66,033 Ozone Transport
o 66.034 Surveys, Studies Investigations, Demonstrations and Special Purpose Activities
Relating to the Clean Air Act
. OFFICE OF WATER
o 66.418 Construction Grants for Wastewater Treatment Works
o 66.419 Water Pollution Control: State and Interstate Program Support
o 66,432 State Public Water System Supervision
o 66..433 State Underground Water Source Protection
o 66.454 Water Quality Management Planning
o 66.456 National Estuary Program
o 66.458 Capitalization Grants for State Revolving Funds
o 66,460 Nonpoint Source Implementation Grants
o 66.461 Wetlands Grants
o 66.463 Water Quality Cooperative Agreements
o 66.466 Chesapeake Bay Program
o 66.467 Wastewater Operator Training Grant Program (Technical Assistance)
o 66.468 Capitalization Grants for Drinking Water State Revolving Fund
o 66.469 Great Lakes Program
o 66.471 State Grants to Reimburse Operators of Small Water Systems for Training and
Certification Costs
o 66.472 Beach Monitoring and Notification Program Development Grants
o 66.473 Direct Implementation Tribal Cooperative Agreements
o 66.474 Water Protection Coordination Grants to States
o 66,475 Gulf of Mexico Program
. OFFICE OF RESEARCH AND DEVELOPMENT
o 66.500 Environmental Protection Consolidated Research
o 66.508 Senior Environmental Employment Program
. OFFICE OF ADMINISTRATION
o 66.600 Environmental Protection Consolidated Grants: Program Support
o 66.605 Performance Partnership Grants
o 66.606 Surveys, Studies, Investigations and Special Purpose Grants
o 66.607 Training and Fellowships for the Environmental Protection Agency
o 66.608 State Information Grants
o 66.609 Children's Health Protection
. OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE
o 66.700 Consolidated Pesticide Enforcement Cooperative Agreements
o 66.701 Toxic Substances Compliance Monitoring Cooperative Agreements
o 66.709 Capacity Building Grants and Cooperative Agreements for States and Tribes
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http://aspe.os.dhhs.gov/cfda/ideptaa.htm 6/30/2003
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CFDA: Programs Indexed by Independent Agency Page 2 of 2
• OFFICE OF ENVIRONMENTAL JUSTICE
o 66.004 Environmental Justice Grants to Small Community Groups
• OFFICE OF SOLD) WASTE AND EMERGENCY RESPONSE
o 66.801 Hazardous Waste Management State Program Support
o 66.802 Superfund State, Political Subdivision, and Indian Tribe Site: Specific Cooperative
Agreements
o 66,804 State and Tribal Underground Storage Tanks Program
o 66.805 Leaking Underground Storage Tank: Trust Fund
o 66.806 Superfund Technical Assistance Grants (Tag) for Citizen Groups at Priority Sites
o 66JS07 Superfund Innovative Technology Evaluation Program
o 66.808 Solid Waste Management Assistance
o 66.800 Superfund State and Indian Tribe Core Program: Cooperative Agreements
o .6A8JQ CEPP Technical Assistance Grants Program
o 66.811 Brownfield Pilots Cooperative Agreements
o 66.8.12 Hazardous Waste Management Grants for Tribes
• OFFICE OF PREVENTION, PESTICIDES AND TOXIC SUBSTANCES
o fi&TQ? TSCA Title IV State Lead Grants: Certification of Lead-Based Paint Professionals
o 6.6.708 Pollution Prevention Grants Program
o 66,714 Pesticide Environmental Stewardship: Regional Grants
o 66.715 Childhood Blood-Lead Screening andXead Awareness (Educational) Outreach for
Indian Tribes
. OFFICE OF FEDERAL ACTIVITIES
o 66.926 Indian Environmental General Assistance Program
. OFFICE OF ENVIRONMENTAL EDUCATION
o 66._950 Environmental Education and Training Program
o 66.95J Environmental Education Grants
http://aspe.os.dhhs.gov/cfda/ideptaa.htm 6/30/2003
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CFDA: 66.034: Surveys, Studies Investigations, Demonstrations and Special Purpose Act... Page 1 of 5
£FDA
CATALOG OF FEDERAL DOMESTIC ASSISTANCE
66.034: Surveys, Studies Investigations, Demonstrations
and Special Purpose Activities Relating to the Clean Air
Act
Objectives: To support Surveys, Studies, Investigations, Demonstrations and Special Purpose
assistance relating to the causes, effects (including health and welfare effects), extent, preventio
control of air pollution to include such topics as air quality, acid deposition, climate change, glc
programs, indoor air and mobile source technology.
MAIN TOPICS:
• ELIGIBILITY REQUIREMENTS
[ Applicant Eligibility | BeneficigiyJSLigib.iJiTy | Credentials and Documeniation ]
. APPLICATION AND AWARD PROCESS
[ Preapplication Coordination | ArjpJicalion_Prpcedure | Award Procedure | Deadlinej |
Range of Approval/Disapproval Time [ Appeals | Renewajs | Criteria for Selecting Proposals |
Examples of Funded Projects | Range of Assistance Given ]
. RELATED PROGRAMS
• PROGRAM ACCOMPLISHMENTS
• FINANCIAL AND ADMINISTRATIVE INFO.
[ Federal Agency | Type of Assistance | Obligations | Budget Account Number | Authorization |
Regulations. Guidelines, and Literature ]
• INFORMATION CONTACTS
[ Regional or Local Office | Headquarters Office | Web Site Address ]
• ASSISTANCE CONSIDERATIONS
[ Formula and Matching Requirements | Length and Time Phasing of Assistance |
Uses and Use Restrictions ]
• POST ASSISTANCE REQUIREMENTS
[ Reports | Audits | Records ]
66.034 ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Assistance under this program is generally available to States, territories, Indian
Tribes, and possessions of the U.S., including DC, public and private universities and colleges,
hospitals, laboratories, other public or private nonprofit institutions, which submit applications
proposing projects with significant technical merit and relevance to EPA's Office of Air and Radiation's
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mission.
Beneficiary Eligibility: State and local governments, U.S. territories and possessions, Indian Tribes,
universities and colleges, hospitals, laboratories, and other public and private nonprofit institutions.
Credentials/Documentation: Costs will be determined in accordance with OMB Circular No. A-87 for
State and local governments and Indian Tribes, OMB Circular No. A-2J for educational institutions, and
OMB Circular No. A-122 for nonprofit institutions. Applicants may be requested to demonstrate they
have appropriate background, academic training, experience in the field, and necessary equipment to
carry out projects. EPA may ask applicants or principle investigators to provide curriculum vitae and
relevant publications.
66.034 APPLICATION AND AWARD PROCESS:
Preapplication Coordination: EPA awards grants and cooperative agreements supporting Surveys,
Studies, and Investigations, Demonstrations and Special Purpose based on unsolicited proposals and
competitive applications submitted in response to EPA solicitations, considering relevance and
likelihood of success of proposed projects. For this reason, we recommend that potential applicants
discuss proposed projects with or submit preapplications to staff in the appropriate EPA technical
program offices. See Appendix TV of the Catalog. Individual programs may be subject to E.a 12372,
"Intergovernmental Review of Federal Programs." Applicants should consult the office or official
designated as the State's Single Point of Contact for more information on the State's review process, and
to determine if the State has selected the program for review. This program is subject to the provisions
of OMB Circulars No. A-102 and No. A JJ,0. • : '
Application Procedure: EPA requires final applications to be made on Standard Form 424. Requests
for application kits must be submitted to the Environmental Protection Agency, Grants Administration
Division, 3903R, Washington, DC 20460 or through the appropriate EPA Regional Office listed in
Appendix IV of the Catalog.
Award Procedure: EPA will administratively evaluate each application to determine the adequacy of
the application in relation to EPA's general grant regulations. EPA's Office of Air and Radiation will
evaluate applications to determine the merit and relevance of proposed projects.
t
Deadlines: None, unless applications are submitted in response to calls for proposals or requests for
applications which include deadlines.
Range of Approval/Disapproval Time: About 180 days.
Appeals: EPA does not have a formal appeal process for applicants whose proposals are not funded.
Appeals with respect to other issues are described in 40 CFR Part 30.63 and Part 31, Subpart F.
Renewals: None. Generally, EPA incrementally funds grants and cooperative agreements for Surveys,
Studies, and Investigations. Approval of subsequent funding increments is dependent on satisfactory
project progress, continued relevance of the project to EPA's priorities, and availability of funds.
Criteria for Selecting Proposals: EPA selects proposed Surveys, Studies, and Investigations projects
for funding based on factors such as relevancy to EPA's mission, technical merit, and the likelihood of
success. If EPA issues a solicitation for applications for a particular project or group of projects, the
solicitation will identify specific criteria.
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CFDA: 66.034: Surveys, Studies Investigations, Demonstrations and Special Purpose Act... Page 3 of 5
Examples of Funded Projects: Examples of funded projects could be developing a reporter's guide to
climate change, developing public service announcements, demonstrations of pilot transportation project
in communities, radon information for real estate companies, and demonstration air quality monitoring
projects.
Range and Average of Financial Assistance: $1,000 to $500,000.
66.034 RELATED PROGRAMS:
None.
66.034 PROGRAM ACCOMPLISHMENTS:
Not applicable. New program.
66.034 FINANCIAL AND ADMINISTRATIVE INFO:
Federal Agency: OFFICE OF AIR AND RADIATION, ENVIRONMENTAL PROTECTION
AGENCY (Home Page)
Type of Assistance: Project Grants (Cooperative Agreements).
Obligations: (Grants and Cooperative Agreements) FY-01 $0, FY 02 est 85,000,000; and FY 03 est
Not available.
Budget Account Number: 68-1810-0-1-304.
Authorization: Clean Air Act of 1963, as amended, Public Law 95-95, as amended; 42 U.S.C. 7401 et
seq.; Section 103.
Regulations, Guidelines, and Literature: Surveys, Studies, and Investigations grants and cooperative
agreements are subject to EPA's General Grant Regulations (40 CFR Part 30 and 40 CFR Part 31).
66.034 INFO CONTACTS:
Regional or Local Office: EPA encourages potential applicants to communicate with the appropriate
EPA Regional Office listed in Appendix IV of the Catalog, and the Headquarters program contacts listed
below.
Headquarters Office: For information on grant applications and procedures, contact: Environmental
Protection Agency, Grants Administration Division, 3903R, Washington, DC 20460. For program
information contact: Office of Air and Radiation - Katherine Moore (202) 564-1514.
Web Site Address: http://www.epa.gov
*
(See Appendix IV for more contact info.)
66.034 ASSISTANCE CONSIDERATIONS:
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Formula and Matching Requirements: None.
Length and Time Phasing of Assistance: EPA normally funds grants and cooperative agreements on a
12-month basis. However, EPA can negotiate the project period with each applicant based on project
requirements. EPA limits project periods to 5 years.
Uses and Use Restrictions: Grants and cooperative agreements are available to support recipients'
allowable direct costs incident to approved Surveys, Studies, Investigations, Demonstrations and Special
Purpose plus allowable indirect costs, in accordance with established EPA policies and regulations.
66.034 POST ASSISTANCE REQUIREMENTS:
Reports: EPA includes reporting requirements for grants and cooperative agreements in the terms and
conditions of the agreements. Agreements may require quarterly, interim, and final progress reports, and
financial, equipment, and invention reports. Reporting requirements are also identified in the Grant
Regulations Part 30 and Part 31.
Audits: Surveys, Studies, and Investigations grants and cooperative agreements are subject to
inspections and audits by the Comptroller General of the United States, the EPA Office of Inspector
General, other EPA staff or any authorized representative of the Federal government. If the Government
Accounting Office or EPA's Inspector General conducts Federal audits, the audits will be made in
accordance with OMB Circular No. A-173 to ensure funds have been used efficiently, economically,
and effectively. Recipients must conduct periodic audits in accordance with the provisions of OMB
Circular No. A:\ 33, "Audits of Institutions of Higher Education and Other Nonprofit Institutions." The
Office of Management and Budget (OMB) Circular No. A-1.33, "Audits of States, Local Governments,
and Nonprofit Organizations," was published in the Federal Register on June 30,1997. The Circular
implements the Single Audit Act amendments of 1996. The Circular requires nonfederal entities that
expend more than $300,000 in Federal award dollars, to have an audit conducted in accordance with the
Circular's provisions. With the revised Circular, the previous OMB Circular No. A-128 for single audits
of State and local governments was rescinded and the single audit requirements for these entities were
incorporated among the provisions of OMB Circular No. A-133.
Records: Recipients must keep financial records, including all documents supporting entries on
accounting records and to substantiate changes in grants available to personnel authorized to examine
EPA recipients grants and cooperative agreements records. Recipients must maintain all records until 3
years from the date of submission of final expenditure reports. If questions, such as those raised as a
result of audits remain following the 3-year period, recipients must retain records until the matter is
completely resolved.
Where to?
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Competition for Assistance Agreements
It is EPA policy to promote competition in the award of assistance
agreements to the maximum extent practicable. When assistance agreements
are awarded competitively, it is EPA policy that the competitive process be
fair and open and that no applicant receive an unfair competitive advantage.
The blue section in the back of the manual contains a copy of EPA's Policy for
Competition in Assistance Agreements (EPA Order 5700.5).
There are three types of competition at EPA; Simplified, Managed and Full
and Open.
Simplified competition is used when a Headquarters or Regional Program
Office decides to use a competitive process when funds available for award(s)
are less than or equal to the competition threshold, currently $75,000.
Managed Competition is competition among a subset of the eligible applicant
pool. In order for a Program Office to use managed competition, the Senior
Resource Official or higher Agency official must approve its use with the
concurrence of the Grants Competition Advocate before the solicitation is
issued.
Full and Open Competition is the preferred method of competition under
EPA's Policy for Competition in Assistance Agreements (EPA Order 5700.5).
To be considered for support, an applicant must be an eligible entity and
must submit a complete application in accordance with established receipt
dates (i.e., deadlines). Information to be submitted typically includes a project
description, budget and budget justification, biographical sketches of key
personnel, and other information specified in the application kit, in the
solicitation, and/or in program guidelines, if any. Applicants should consult
the cost principles and general administrative requirements for grants
pertaining to their organizational type in order to prepare the budget and
complete other parts of the application. Applicants may be required to provide
proof of organizational eligibility (such as proof of non-profit status), trainee
or fellow eligibility and citizenship, or other eligibility information.
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Applications must also demonstrate compliance (or intent to comply), through
certifications or other means, with a number of public policy requirements.
Ranking Criteria
The ranking criteria to be used to evaluate applications and proposals must
be established by the EPA program office before the Request of Applications
or Initial Proposals is published. The criteria should assure that reviewers
will be able to differentiate applications or proposals on the quality of the
applications or proposals. The criteria must be included in the Request for
Applications or Request for Initial Proposals. EPA will not make funding
decisions on the basis of undisclosed threshold or evaluation criteria.
Where can I find a RFA or RFIP?
EPA will publish the RFA or RFIP at the http://www.fedgrants.gov/ website
and on an EPA website, allowing generally 60 days before the application
deadline. Additionally, EPA may supplement notification in the Federal
Register or web site publication by:
(1) Publication in newsletters, trade journals, general circulation newspapers,
or other written media or by mass mailing. "
(2) Providing RFAs or RFIPs using electronic means other than web-sites
such as through list servers or facsimile mailing lists that are periodically
updated. New potential applicants, upon request, may be added to the lists.
(3) Mailing copies of RFAs or RFIPs to eligible organizations on EPA mailing
lists that are periodically updated. New potential applicants, upon request,
may be added to the lists.
(4) Using other methods that are reasonably calculated to ensure that likely
interested parties will be notified.
If EPA changes the requirements of a RFA or RFIP before the application
deadline, potential applicants will be notified in the same manner that the
original announcement was publicized or announced.
EPA may authorize an application deadline extension when justified by
appropriate circumstances. EPA will notify potential applicants of the
extension, in the same manner the original notice was publicized, or such
other manner as to assure all potential applicants are notified.
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Timeliness of Applications and Proposals
Generally, to be considered timely, applications and initial proposals must be
postmarked by the U.S. Postal Service, hand-delivered, or electronically
delivered to the Agency, or include official delivery service documentation
indicating EPA acceptance from a delivery service, on or before the deadline
date published in the RFA or RFIP.
The RFA or RFIP will be clear on how EPA will handle applications or
proposals that are received after the deadline.
Evaluations of Applications and Initial Proposals
Evaluations of Applications and Initial Proposals will generally be done by a
panel. The panel will review and rank or prepare a list of qualified and
unqualified Applications or Initial Proposals for which qualified applicant's
will be invited to submit final proposals. The ranking must be based on the
evaluation criteria and relative weights included in the Request for Proposals
or Request for Initial Applications. The panel will also review and rank or list
final proposals in response to a request that selected Initial Proposers submit
final proposals. An approval official must determine, from the qualified final
Applications, which to approve.
Panels may be made up of EPA and other Federal Agency employees, as
appropriate. Non-federal personnel may also participate in the review process,
but final decisions on the relevance of a proposal to program needs and the
selection of recipients must be made by EPA staff. The panel selection process
must ensure that individual reviewers do not have a conflict of interest with
regard to a particular applicant, application or initial or final proposals.
Notifying Unsuccessful Applicants
EPA will notify unsuccessful applicants in writing, generally within 60 days of
selection, that they will not be receiving awards. If requested by the applicant,
EPA will provide a written explanation as to why the applicant did not receive
an award, including a summary of the strengths and weaknesses of the
application or initial proposal or final proposal.
Unsuccessful applicants may request review of final finding decisions in
accordance with the dispute resolution process under 40 CFR 30.63 and Part
31, subpart F, as applicable.
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i Contents of Requests for Applications or Requests for
Initial Proposals
Requests for Applications(RFA's) and Requests for Initial Proposals (RFIP's)
issued by the EPA currently must, as applicable, include the following
information.
(1) The Catalog of Federal Domestic Assistance (CFDA) number and title for
the program or project to be funded, where available. (If the request for
assignment of a CFDA number is pending, the announcement should indicate
this.)
(2) An estimate of- the amount of Federal funds that may be available for
award! the number of individual awards! the amounts or range of individual
awards; the amount of funding per award;'and the project periods for the
awards. Whether applications for supplemental awards of existing projects are
eligible to compete with applications for new awards should be addressed as
well.
(3) Applicant eligibility requirements.
(4) Background information on the types of projects the Agency is interested in
supporting, including any limitations on the scope of the statutory authority
for the planned award. The Agency's funding priorities or the technical or
focus areas in which the Agency intends to provide assistance must be
described.
(5) Matching or cost sharing requirements, if any.
(6) Subjects that the applicant must address in the application, or initial
proposal including related content and forms and formats. (The list or
description of subjects must be consistent with the evaluation ifactors.)
(7) Process, procedures, due dates, and local time for submitting applications
or initial proposals.
(8) The availability of pre-application assistance, if any, to ensure that all
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applicants have the same opportunity to obtain assistance.
(9) Whether a grant or cooperative agreement will be used, if known, and for a
cooperative agreement competition, the anticipated substantial involvement
between the Federal government and the recipient.
(10) Any threshold "pass/fail" criteria that an applicant must meet to be
considered for an award, such as the need for certain legal authorities to carry
out a project.
(11) The evaluation criteria that will be applied to the review of applications or
initial and final proposals and the relative importance of each criterion.
(12) Other factors that will be considered in making award decisions after
applications are initially evaluated, such as the geographic distribution of
funds.
(13) The process that will be used to evaluate applications or initial and final
proposals.
(14) The dispute resolution process in accordance with 40 CFR 30.63 and Part
31, subpart F.
(15) Applicable regulations and cost principles, and other administrative
requirements.
(16) A statement that applicants should clearly mark information they
consider confidential, and that EPA will make final confidentiality decisions in
accordance with Agency regulations at 40 CFR. Part 2, Subpart B.
(17) A statement indicating the applicability of Executive Order 12372,
Intergovernmental Review of Federal Programs.
(18) A statement that EPA reserves the right to reject all proposals or
applications and make no awards.
(19) For RFIPs, a clear explanation that EPA will invite only applicants whose
initial proposals are selected to submit detailed final proposals.
(20) Title of RFA or RFIP if different from CFDA title.
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(21) RFA or RFIP number or other information which identifies the
announcement, if available.
(22) The Program Office name and mailing address with zip code.
(23) The name of the Program Office contacts including telephone number, if
appropriate, fax number, and e-mail address.
(24) The address to request application forms (Standard Form 424) and
related information or Internet address where materials are accessible. For
RFIPs, application forms (SF 424) generally are required only with final
proposals.
(25) Information regarding funding restrictions in order to allow the applicant
to develop an application and budget consistent with program requirements
(e.g., allowable activities, limitations on direct costs such as foreign travel or
equipment purchases, and limitations on indirect costs).
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(26) Other information which may be required in guidance issued by the
Competition Advocate.
Competition Website
EPA's Competition website is located at www.epa.gov . This site is designed to
inform applicants of possible funding opportunities. The site is linked to other
useful tools used in the process of applying for a grant.
Federal Grant Opportunities
EPA grant solicitation notifications are posted at:
httpV/w ww.fedgrants.gov/
This site gives grantors a means to post solicitations for grants. It also gives
applicants a single site for obtaining these solicitations. For support or
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MBE/WBE Utilization
Policy Goal
The policy goal of the MBE/WBE Programs is to assure that minority business enterprises
(MBE) and woman business enterprises (WBE) are given the opportunity to participate in
contract and procurement for supplies, construction, equipment and services under any EPA
grant or cooperative agreement.
The Policy applies to all contracts/procurement for supplies, construction equipment and services
under any EPA grant or cooperative agreement.
Authority
A. Fair Share Goals
• In keeping with the principles set in the 1995 Adarand Constructors, Inc. v. Pena,
515 U.S. 200 decision, the EPA issued its revised MBE/WBE program guidance,
"Guidance for Utilization of Small, Minority and Women's Business Enterprises
in Procurement Under Assistance Agreements - 6010" in July 1997.
• The MBE Guidance requires "fair share" goals for all Agency assistance
programs.
The eight percent MBE/WBE minimum participation goal contained in EPA's FY
1993 Appropriations Act, Pub. L. No. 102-389 and the ten percent goal and the
10% MBE/WBE goal contained in the Clean Air Act Amendments of 1990 now
serve as overall, national goals for Agency assistance programs.
B. Negotiations of Fair Share Goals
• Projects will comply with the MBE/WBE requirements. This includes ensuring
adequate records are retained to demonstrate compliance. See 40 C.F.R.
§31.36(B)(9), 40 C.F.R. §31.42,40 C.F.R. 35.3165(C)(2)
C Good Faith Efforts
• The six affirmative steps are described hi the CWSRF regulations at 40 C.F.R.
§35.3145(d)(l)-(6), they represent good faith efforts to attract and utilize
MBE/WBEs.
D. Documentation/Reporting
• EPA may take remedial action under 40 CFR §30.62 or 31.43 for a recipient's
failure to comply.
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Negotiation of Fair Share Goals
A fair share objective is a percentage based on the capacity and availability of
qualified MBEs, and WBEs in the relevant geographic market for the procurement
categories of construction, equipment, services and supplies compared to the
number of all qualified entities in the same market for the same procurement
categories.
EPA requires "fair share" MBE/WBE procurement goals for construction,
equipment, services and supplies.
Those goals are negotiated between EPA and States and/or recipients of EPA
financial assistance awards.
Separate MBE and WBE goals should be clearly reflected in the analysis as the
EPA requires separate goals for MBEs and another for WBEs for each of the four
procurement categories.
The 8% MBE/WBE goal and the 10% MBE/WBE goal are treated by EPA as
overall national goals. This allows for smaller or larger "fair share" objectives to
be negotiated for particular grants and. cooperative agreements based on the
availability standard. '
Good Faith Efforts
• Good faith efforts are activities by a recipient or its prime contractor to increase
MBE/WBE awareness of procurement opportunities through race/gender neutral
efforts.
• EPA offers the following examples to assist recipients and prime contractors in
carrying out the good faith efforts.
(1) Ensure MBE/WBEs are made aware of contracting opportunities to the fullest extent
practicable through outreach and recruitment activities. For Indian Tribal, State and local
Government recipients, this will include placing MBE/WBEs on solicitation lists and
soliciting them whenever they are potential sources.
(a) Maintain and update a listing of qualified MBE/WBEs that can be
solicited for construction, equipment, services and/or supplies.
(b) Provide listings to all interested parties who request copies of the
bidding or proposing documents.
(c) Contact appropriate sources within your geographic area and State to
identify qualified MBE/WBE for placement on your MBE/WBE business
listings.
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(d) Utilize other MBE/WBE listings such as those of the State's Minority
Business Office, the Small Business administration, Minority Business
Development Agency (MBDA) of the Department of Commerce, EPA
OSDBU.andDOT.
(e) have State environment agency personnel review solicitation lists.
(2) Make information of forthcoming opportunities available to MBE/WBEs and arrange
time for contracts and establish delivery schedules, where requirements permit, in a way
that encourages and facilitates participation by DBEs in the competitive process. This
includes, whenever possible, posting solicitations for bids or proposals for a minimum of
30 calendar days before the bid or proposal closing date.
(a) Develop realistic delivery schedules which may provide for greater
MBE/WBE participation.
(b) Advertise through the minority media in order to facilitate MBE/WBE
utilization. Such advertisements may include, but are not limited to,
contracting and subcontracting opportunities, hiring and employment, or
any other matter related to the project.
(c) Advertise in general circulation publications, trade publications, State
agency publications and minority and women's business focused media
concerning contracting opportunities on your projects. Maintain a list of
minority and/or women's business-focused publications that may be
utilized to solicit MBE/WBEs.
(3) Consider in the contracting process whether firms competing for large contracts could
subcontract with MBE/WBEs. For Indian Tribal, State and local Government recipients,
this will include dividing total requirements when economically feasible into smaller
tasks or quantities in order to increase opportunities for participation by MBE/WBEs in
the competitive process.
(a) Perform an analysis to identify portions of work that can be divided
and performed by qualified MBE/WBEs.
(b) Scrutinize the elements of the total project to develop economical units
of work that are within the bonding range of MBE/WBEs.
(c) Conduct meetings, conferences, and follow-ups with MBE/WBE
associations and minority media to inform these groups of opportunities to
provide construction, equipment, services ad supplies.
(4) Encourage contracting with a consortium of MBE/WBEs when a contract is too large
for one of these firms to handle individually.
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(a) Notify MBE/WBEs of future procurement opportunities so they may
establish bidding solicitations and procurement plans.
(b) Provide MBE/WBE trade organizations with succinct summaries of
solicitations.
(c) Provide interested MBE/WBEs with adequate information about plans,
specifications, timing and other requirements of the proposed projects.
(5) Use the services and assistance of the SB A and the MBDA.
(a) Use the services of outreach programs sponsored by the MBDA and/or
the SBA to recruit bona fide firms for placement on DBE bidders lists to
assist these firms in the development of bid packaging.
(b) Seek out Minority Business Development Centers (MBDCs) to assist
recipients and prime contractors in identifying MBE/WBEs for potential •
work opportunities on projects
(6) If the prime contractor awards subcontracts, require the prime contractor to take the
steps in subparagraphs (l)-(5) of this section.
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Documentation/Reporting
• Recipients are required to maintain the records documenting compliance with
requirements including documentation of its and its prime contractor's good faith
efforts and data relied upon in formulating its fair share objectives.
• In addition, a recipient of a Continuing Environmental Program Grant (e.g., a
State) or other annual grant would be required to create and maintain a bidders
list. Such a list must only by kept until the grant project period has expired and
the recipient is no longer receiving EPA funding under the grant.
• All recipients of continuing environmental program grants, institutions of higher
education, hospitals and other non-profit organizations are required to report to
EPA within 30 days following the end of each Federal fiscal year except for State
and local government recipients who will report on an annual basis.
• EPA requires that a recipient report the total amount of financial assistance spent
on procurement and the amount awarded to an MBE or WBE on EPA Form 5700-
52A.
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INSTRUCTIONS
MBE/WBE UTILIZATION UNDER FEDERAL GRANTS, COOPERATIVE
AGREEMENTS, AND INTERAGENCY AGREEMENTS
EPA FORM 5700-52A
A. General Instructions:
MBE/WBE utilization is based on Executive Orders
11625. 12138, 12432, P.L. 102-389 and EPA
Regulations Part 30 and 31. EPA Form 5700-52A
must be completed by recipients of Federal grants,
cooperative agreements, or other Federal financial
assistance which involve procurement of supplies,
equipment, construction or services to accomplish
Federal assistance programs.
Recipients are required to report to EPA within one
month following the end of each Federal fiscal year
quarter or annually as in the agreement.
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B. Definitions:
Procurement is the acquisition through order,
purchase, lease or barter of supplies, equipment,
construction or services needed to accomplish
Federal assistance programs.
A contract is a written agreement between an EPA
recipient and another party (other than another
public agency) and any lower tier agreement for
equipment, services, supplies, or construction
necessary to complete the project. Includes personal
and professional services, agreements with
consultants, and purchase orders.
A minority business enterprise (MBE) is a business
concern that is (1) at least 51 percent owned by one
or more minority individuals, or, in the case of a
publicly owned business, at least 51 percent of the
stock is owned by one or more minority individuals;
and (2) whose daily business operations are managed
and directed by one or more of the minority owners.
U.S. citizenship is required. Recipients shall
presume that minority individuals include Black
Americans, Hispanic Americans, Native Americans,
Asian Pacific Americans, or other groups whose
members are found to be disadvantaged by the
Small Business Act or by the Secretary of Commerce
under section 5 of Executive order 11625. The
reporting contact at EPA can provide additional
information.
A woman business enterprise (WBE) is a business
concern that is, (1) at least 51 percent owned by one
or more women, or, in the case of a publicly owned
business, at least 51 percent of the stock is owned by
one or more women and (2) whose daily business
operations are managed and directed by one or more
of the women owners.
Business firms which are 51 percent owned by
minorities or women, but are in fact managed and
operated by non-minority individuals do not qualify
for meeting MBE/WBE procurement goals.
e
The following affirmative steps for utilizing MBEs
and WBEs are required to be documented:
1. Inclusion of MBEs/WBEs on solicitation lists.
2. Assure MBEs/WBEs are solicited once they
are identified.
3. Where feasible, divide total requirements
into smaller tasks to permit maximum
MBE/WBE participation.
4. Where feasible, establish delivery
schedules which will encourage
MBE/WBE participation.
5. Encourage use of the services of the U.S.
Department of Commerce's Minority
Business Development Agency (MBDA) and
U.S. Small Business Administration to
identify MBEs/WBEs.
6. Require that each party to a subgrant,
subagreement, or contract award take the
affirmative steps outlined here.
the
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C. Instructions for Part I:
D. Instructions for Part II:
1. Complete Federal fiscal year and check
applicable reporting box quarterly or annually.
(Federal fiscal year runs from October 1
through September 30.)
2. "WU1 be provided by EPA."
3. Identify the agency, state authority, university
or other organization which is the recipient of
the Federal financial assistance and the person
to contact concerning this report.
4a. Grant/cooperative agreement or Intcragency
Agreement number assigned by EPA.
4b. Refer back to grant document for this
information.
5a. Total grant amount which includes Federal
funds plus recipient matching funds and funds
from other sources.
5b. Total contracts/procurements awarded this
quarter. For example: Actual dollars for
procurement from the procuring office; actual
contracts let from the contracts office; actual
goods, services, supplies, etc., from other ^
sources including the central purchasing/ ^
procurement centers).
5c. Portion of total procurement dollars recipient
plans to spend with MBEs or WBEs this fiscal
year. With the concurrence of EPA, a fair
share goal shall be determined by each
recipient.
5d. Dollar amount of all MBE/WBE procurement
amounts awarded under this reporting period.
(These amounts include the Federal, State and
local shares in the procurement awards).
5e. Check only if no procurements were made this
reporting period. (If dollar amounts are shown
in 5b. indicate reason in 6. Comments
Section).
6. Additional comments or explanations. Please
refer to specific item number(s) if appropriate.
7. Name and title of official administrator or
designated reporting official.
8. Signature and month, day year report
submitted.
For each MBE/WBE procurement made under this
assistance agreement during the reporting period,
provide the following information:
1. Check whether this is a first tier
procurement made directly by Federal
financial assistance recipient or other second
Her procurement made by recipient's
subgrantee or prime contractor. Include all
qualifying second tier purchases executed this
quarter regardless of when the first tier
procurement occurred.
2. Check MBE or WBE.
3. Dollar value of procurement.
4. Date of award, shown as month, day. year.
5. Using codes at the bottom of the form,
identify type of product or service acquired
through this procurement (eg., enter 1 if
agriculture, 2 if mining, etc).
6. Name and address of MBE/WBE firm.
TMsdata Is requested to comply with provisions mandated by. statute
or regulations (40 CFR Part 30 and 31). OMB Circulars: or added by
EPA to ensure sound and effective assistance management Accurate
complete data are required to obtain funding, while no pledra of
confidentiality Is provided ^"
The public reporting and recording burden for this collection of
information b estimated to average I hour per response annually Burden
means the total time, effort, or financial resources expended by persons
to generate, maintain, retain, or disclosure or provide Information to or
for a Federal agency. This Includes the lime needed to review
hstmakmj, develop, acquire. Install, and utilize technology and systems
for the proposes of collecting, validating, and verifying Information.
processing and maintaining Information, and disclosing and providing
Information, adjust the existing ways to comply with any previously
applicable Instructions and requirements, train personnel to be able to
respond to a collection of Information; search data sources; complete and
review the collection of Information; and transmit or otherwise disclose
the tafbrmarion. An agency may not conduct or sponsor, and a person b
not required to respond to. a coUeeUon of Information unless it displays
a currently valid OMB control number
Send comments on the Agency's need for this Information, the
accuracy of the provided burden estimates, and any suggested methods
for minimizing respondent burden, including through the use of
automated collection techniques to the Director. OPPE Regulatory
Information Division. U.S. Environmental Protection Agency (2136). 401
M St.. S W , Washington. D.C 20460. Include the OMB Control
number hi any correspondence Do not send the completed form to this
address
34
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OMB CONTROL NO 2030-0020
APPROVED 9/12/96
APPROVAL EXPIRES 9/30/99
U.S. ENVIRONMENTAL PROTECTION AGENCY
MBE/WBE UTILIZATION UNDER FEDERAL GRANTS, COOPERATIVE
AGREEMENTS, AND INTERAGENCY AGREEMENTS
PART 1. (NEGATIVE REPORTS ARE REQUIRED)
1A. FEDERAL FISCAL YEAR
19
IB. REPORTING QUARTER (Check appropriate box)
—Ist(Oct-Dec) — 2ndCJan-Mar) — 3rd(Apr-Jun) — 4thOul-Sep) —Annual
2. FEDERAL FINANCIAL ASSISTANCE AGENCY
(EPA. Office, Address)
3. REPORTING RECIPIENT (Name and Address)
2A. REPORTING CONTACT
PHONE:
3A. REPORTING CONTACT
PHONE:
4A. FINANCIAL ASSISTANCE AGREEMENT ID NUMBER
4B. FEDERAL FINANCIAL ASSISTANCE PROGRAM
5A. TOTAL GRANT AMOUNT
SB. TOTAL CONTRACT/PROCUREMENT AMOUNT THIS QUARTER
$
5C. RECIPIENT'S MBE/WBE GOALS
MBE % WBE
5D. ACTUAL MBE/WBE PROCUREMENT ACCOMPLISHED THIS REPORTING PERIOD
MBE $ WBE S
5E. NEGATIVE REPORT (Check)
— SEE INSTRUCTIONS
6. COMMENTS:
7. NAME OF AUTHORIZED REPRESENTATIVE
TITLE
8. SIGNATURE OF AUTHORIZED REPRESENTATIVE
DATE
EPA FORM 5700-52A • (5/96)
Attachment #1
-------
MBE/WBE PROCUREMENTS MADE DURING QUARTER
PART II.
Procurement
Made By
Recipient Other
1
Business
Enterprise
Minority
I
1
1
Women
$ Value of
Procurement
Date of
Award
MM/DD/YY
Type of Product
or Service1
(Enter Code)
Name/Address of MBE/WBE Contractor or
Vendor
Type of product or service codes:
1 = Agriculture
2 = Mining
3 = Construction
4 = Manufacturing
EPA FORM 5700-52A - (5/96)
5 = Transportation
6 = Wholesale Trade
7 = Retail Trade
8 = Finance, Insurance. Real Estate
9 = Services
a = Business Services
b = Professional Services
c = Repair Services
d = Personal Services
10 = Other
-------
Overview of the Award Document and Terms and Conditions
The Assistance Agreement Award Document is a legally binding agreement
between EPA and the recipient organization. Components of the Award includes
the following:
s
- EPA Assistance Application, including the approved
work plan/narrative (by reference);
- EPA Assistance Agreement Document, including terms and
conditions;
- EPA regulations (by reference)
There are three types of terms and conditions:
Administrative; Applicable provision of Title 40 of the Code of Federal
Regulations as well as other pertinent laws and regulations. For example:
In accordance with EPA guidance and OMB Circular No. A-21 or A-122, as
appropriate, the recipient agrees that it mil not use assistance funds (Federal or.
non-Federal snare) for lobbying or political activities.
Programmatic; Provided by the supporting program office, for example:
The recipient agrees to submit quarterly progress reports to the EPA Project
Officer within thirty days after each reporting period.
37
-------
Programmatic terms and conditions also include "substantial involvement terms
and conditions" performed by the EPA, usually the Project Officer, if supported as
a cooperative agreement. For example:
The EPA Project Officer will participate in planning sessions for each phase of
the project for the purpose of providing technical input.
High Risk; A recipient may be considered high risk if it: (1) has a history of
unsatisfactory performance; (2) is not financially stable; (3) has a management
system which does not meet the management standards set for in 40 CFR Part 30
or 31; (4) has not conformed to the terms and conditions of a previous award; or
(5) is otherwise considered not responsible.
Examples of "high risk " terms and conditions include: (1) payment on a
reimbursement basis; (2) prohibiting recipients from proceeding to the next
phase of a project until acceptance of performance in previous phases; (3)
requiring the recipient to submit more detailed financial reports; (4) and intense
monitoring by the EPA Project Officer.
38
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.O-
£ A %
vSZSt;
x«x
U.S. ENVIRONMENTAL
PROTECTION AGENCY
Cooperative Agreement
RECIPIENT TYPE:
Individual
RECIPIENT:
EIN:
PROJECT MANAGER
Individual from the recipient organization
responsible for the completion
of the work approved in the application
E-Mail:
Phone:
ASSISTANCE ID NO.
PRG 1 DOC ID (AMEND*
R 800000-0
TYPE OF ACTION
New
PAYMENT METHOD:
DATE OF AWARD
MAILING DATE
ACH#
Send Payment Request to:
Las Vegas Financial Management Center
PAYEE:
EPA PROJECT OFFICER
Individual from EPA's
program office responsible for
E-Mail- monitering f>e technical work and
OK!™,. comPUa««* «° thr terms and conditions
rnone. of ftc BJ^-J^JJ^ agnjcmenj
EPA GRANT SPECIALIST
Individual from EPA's
Grants Management Office
E-Mail: responsible for monitoring adnercnct
Phone : to applicable regulations and
administrative requirements
PROJECT TITLE AND DESCRIPTION
BUDGET PERIOD
PROJECT PERIOD
TOTAL BUDGET PERIOD COST
$0.00
TOTAL PROJECT PERIOD COST
$0.00
NOTE: The Agreement must be completed In duplicate and the Original returned to the appropriate Grants Management Office listed below,
within 3 calendar weeks after receipt or within any extension oF time as may be granted by EPA. Receipt of a written refusal or
failure to return the property executed document within the prescribed time, may result In the withdrawal of the offer by the Agency.
Any change to the Agreement by the Recipient subsequent to the document being signed by the EPA Award Official, which the
Award Official determines to materially alter the Agreement, shall void the Agreement
OFFER AND ACCEPTANCE
The United States, acting by and through the U.S. Environmental Protection Agency (EPA), hereby offers
Assistance/Amendment to the • . .. •. - •- : for % of all approved costs
Incurred up to and not exceeding SO for the suppcrt of approved budget period effort described in application
(including all application modifications) cited in the Project Title and Description above, signed Included
herein by reference.
ISSUING OFFICE (GRANTS MANAGEMENT OFFICE)
ORGANIZATION / ADDRESS
Grants Administration Division
1200 Pennsylvania Ave, NW
3903R
Washington. DC 20460
AWARD APPROVAL OFFICE
ORGANIZATION / ADDRESS
EPA's Program Office
funding the assistance agreement
THE UNITED STATES OF AMERICA BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY
SIGNATURE OF AWARD OFFICIAL
TYPED NAME AND TITLE
EPA's Award Official
DATE
This agreement is subject to applicable U.S. Environmental Protection Agency statutory provisions and assistance regulations. In
accepting this award or amendment and any payments mado pursuant thereto, (1) the undersigned represents that he Is duly
authorized to act on behalf of the recipient organization, and (2) the recipient agrees (a) that the award is subject to the applicable
provisions of 40 CFR Chapter 1, Subchapter B and of the provisions of this agreement (and all attachments), and (b) that
acceptance of any payments constitutes an agreement by the payee that the amounts, If any found by EPA to have been overpaid
will be refunded or credited In full to EPA.
BY AND ON BEHALF OF THE DESIGNATED RECIPIENT ORGANIZATION
SIGNATURE
TYPED NAME AND TITLE
Individual authorized by the
recipient organization to accept the award
DATE
39
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EPA Funding Information
FUNDS
EPA In-Kind Amount
Unexpended Prior Year Balance
Other Federal Funds
Recipient Contribution
State Contribution
Local Contribution
Other Contribution
Allowable Project Cost
FORMER AWARD
$
S
S
$
$
$
$
S
so
THIS ACTION
$
$
S
S
$
$
$
S
$0
AMENDED TOTAL
$0
S 0
so
so
so
$0
so
$0
so
Assistance Program (CFDA)
EPA's Grant Program identified in the
Catalog of Federal Domestic Assistance
Statutory Authority
Identification of Statutory Authority
(Clean Air Act, Section 103)
Regulatory Authority
Identification of applicable
regulation in which the recipient
organization Is subject to (40 CFR Part 30)
Could include supplemental regulations -
40 CFR Part 30 and 40
Fiscal
Site Name
FY
Approp.
Code
Budget
OfQsnizstion
PRC
•
Object
Class
Site/Project
Cost
Organization
Obligation /
Deobllgatlon
40
-------
Budget Summary Page
Table A - Object Class Category
(Non-construction)
1. Personnel
2. Fringe Benefits
3. Travel
4. Equipment
5. Supplies
6. Contractual
7. Construction
8. Other
9. Total Direct Charges
10. Indirect Costs: % Base
11. Total (Share: Recipient . . % Federal %.)
12. Total Approved Assistance Amount
13. Program Income
Total Approved Allowable
Budget Period Cost
*
"
-
41
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Use of a Universal Identifier by Grant Applicants
" A new requirement from the Office of Management and Budget (OMB) for
Grant applicants took effect on October 1,2003. OMB has issued a policy
directive to implement the requirement for grant applicants to provide a Dun
and Bradstreet (D&B) Data Universal Numbering System (DUNS) number when applying for
Federal grants or cooperative agreements on or after October 1,2003.
OMB has determined that there is a need for improved statistical reporting of Federal grants and
cooperative agreements. Use of the DUNS number government-wide will provide a means to
identify entities receiving those awards and their business relationships. The identifier will be
used for tracking purposes, and to validate address and point of contact information.
A DUNS number will be required whether an applicant is submitting a paper application or using
the government-wide electronic portal (Grants.gov). The DUNS number will supplement other
identifiers required by statute or regulation, such as tax identification numbers.
Organizations can receive a DUNS number at no,cost by calling the dedicated toll-free
DUNS Number request line at 1-866-705- 5711. Individuals who would personally receive a
grant or cooperative agreement award from the Federal government apart from any business or
non-profit organization they may operate are exempt from this requirement.
A DUNS number must be included in every application for a new award or renewal of an award,
including applications or plans under mandatory grant programs, submitted on or after October 1,
2003.
42
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RESPONSIBILITIES
The Recipient's Responsibilities Upon Notification of the Award;
Review the Assistance Agreement Award document and attached terms and
conditions;
Contact the EPA Grants Specialist if you have any questions or concerns;
Sign the Agreement and return it to the EPA Grants Specialist within three weeks
of receipt (do not make any changes, EPA can issue a corrected agreement);
Retain a copy of the Agreement in your files;
Begin work on your project, complying with the terms and conditions of the
Agreement;
Inform the EPA Project Officer if problems arise that jeopardize the completion of
the project;
Communicate regularly with the EPA Project Officer on technical issues and the
Grants Specialist on administrative issues (don't ask for help after the fact).
43
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The EPA Project Officer Responsibilities:
Monitor all activities and the recipient's progress on the project;
Review progress reports to ensure the recipient is performing the work as agreed
and approved in the application;
Provide technical assistance to the recipient;
Respond to questions or concerns raised by the Grant Specialists;
Serves as the focal point for programmatic and technical issues;
Ensure completion of EPA's programmatic terms and conditions if supported as a
cooperative agreement and;
Maintain documentation.
EPA Grant Specialists Responsibilities include:
\ - -
Plan oversight reviews of recipient's management of assistance agreements;
Focal point for administrative issues.
44
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APPLICATION for PAYMENTS
ASAP is an electronic payments system developed by the Financial Management
Service (FMS) and the Federal Reserve Bank of Richmond.
With ASAP, the electronic movement of all payments is through the Automated
Clearing House (ACH) system or the FEDWIRE funds transfer system.
ASAP is a recipient-initiated payment and information system used to make timely
payments to recipients of Federal Domestic Assistance programs and to third party
providers performing services for FMS and other Federal Agencies.
ASAP Process
1. Federal program agencies
establish accounts and spending
authorizations for recipients.
-"$Q
..j: 2. Recipient Organizations initiate
payment requests when funds are needed.
Iff!
3. Paymentrequests are approved/'
rejected based on the amount of
available funds in the recipients
account
^ ,; * ,,d 4 • Approved payments are made
the same day,via the ?^
Federal Reserve's
FEDWIRE system or
the next dav via ACH.
5. Funds are credited to the recipient's account
at the recipient's designated financial institution
Department of the Treasury —mrmrmgff
Management Service m.Jfmmjf
45
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ASAP Benefits
•One-time enrollment
•No communication software costs
•Minimal hardware costs
•Means fewer systems for States and
recipient organizations to operate.
•Cash Management Reports
. . ASAP Features
•On-line requests for same-day payments from 8:00 a.m.
until 5:45 p.rn. Eastern time (ET), via FEDW^RE
•On-line requests for next-day payments from 8:00 a.m.
until 11:59 p.m. ET via ACII
•Warehouse payment requests (ACH)
"Request against multiple accounts and receive a single
FF.DWIRE payment under Summary FEDWIRE
7 •Immediate notification of payment status for on-line
<" payment requests
•Immediate update of aval table balance
•.On-line notification of non-user initiated system events
and transactions
•All adjustment activity is on-line & real-time
FEDERAL PROGRAM AGENCIES
rl
flM
~!m
ASAP Benefits
•One-time enrollment
•No communication software costs
•Minimal hardware costs
•Easily accessible, real-time
information
•Accounts may be at, above, or below the program level
•Oa-1 ine authorization transact!' bns until
9:00 p.m. ET
•Batch Authorization transactions 24 hours a day
•Accountactivity inquiries
•Funds returned via ASAP
•Rece i ve daily transaction reports
•Initiate user-requested reports
•On-line notifications for non-user initiated system
transactions and events
For additional information, contact the ASAP Project Team
Michael Chew (202)874-7064
Dale Walton (202)874-7118
Pliiludelpliiu Himnoiul Cenler (215)516-8021
San Francisco Financial Center (4 15)8 17-7182
Kansas City l^inunciul Center (816)414-2100
46
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DRAFT - September 17,2003
PURCHASING SUPPLIES, EQUIPMENT, AND SERVICES UNDER EPA GRANTS
NON-PROFIT ORGANIZATIONS
CHAPTER 1 - GRANT RECIPIENT PURCHASING REQUIREMENTS
As a recipient of EPA grants and cooperative agreements you will likely find it necessary to buy
supplies, equipment, and services in order to complete the work under your EPA awards. EPA
developed this guidance to help ensure you meet EPA requirements when making such necessary
purchases.
EPA's Uniform Administrative Requirements for Grants" arid Agreements with Institutions of
Higher Education, Hospitals, and Other Nonprofit Organizations regulation (40 CFR Part 30)
applies to EPA grants (by the way, when we say "grants" from now on, we mean grants or
cooperative agreements) for non-governmental recipients, such as your organization. This
guidance is based on the purchasing requirements of that regulation. It does not supercede the
regulation itself or an applicable statute or Executive Order. Some other EPA regulations may
establish purchasing requirements which apply to certain programs. At this time, only the \
Grants for Technical Assistance (TAG) regulation (40 CFR Part 35, Subpart M) includes such
program specific regulations. If you are a recipient of a TAG grant, review that rule to ensure
you comply with the specific requirements for your grant.
EPA often calls purchasing under grants "procurement", but in this guidance we use the term
"purchasing".
This guidance does not apply to obtaining the services of individual consultants. A
consultant is a person who has expertise in a particular field (specialized skills) and who serves
solely in an advisory capacity and is paid at a daily or hourly rate. A consultant primarily
provides views or opinions on problems or questions you present. The term includes experts or
persons with excellent qualifications and a high degree of attainment in a professional, scientific,
technical, or other field. EPA has separate guidance on obtaining the services, of consultants.
Contact your project officer or grants specialist for that guidance.
47
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This guidance also does not apply to subgrants. A subgrant is an award of financial assistance
in the form of money, or property in lieu of money, which you make to an eligible subrecipient.
The term does not include recipient purchases. EPA has other guidance applicable to subgrants.
Contact your project officer or grants specialist for that guidance. (Unless your project officer
approves in writing, you cannot make a subgrant to a profit-making organization.)
BASIC REQUIREMENTS FOR PURCHASING SYSTEM
It is unlikely you will purchase the supplies, equipment, and services you need for
your grant at an auction, but EPA's purchasing guidance and requirements are
designed to ensure that what you buy you get at a reasonable price in a fair and openly
competitive way. Many organizations which receive EPA grants have their own
purchasing requirements and systems. If you have your own system which meets the
minimum standards of the EPA regulations as explained in this guidance, you may use that
system. If your system does not meet EPA's minimum requirements you may amend the system
to meet EPA requirements, but, in any event, you must conduct your purchasing in
accordance with the minimum EPA requirements.
The following sections of this guidance are based on and provide cross-references to the
applicable regulations and can help ensure you have a strong purchasing system which will
ensure you make sound purchasing decisions. "" '
RESPONSIBILITY
You are responsible for the settlement and satisfaction of all contractual
and administrative issues arising out of contracts under youf grant. EPA will
TI« root staple!"^ be involved m resolving such issues as disputes, claims, protests of award,
source evaluation or other matters of a contractual nature. You must, however,
refer violations of law to the Federal, State or local authority with jurisdiction (40 CFR 30.41).
You must ensure you do not purchase unnecessary things under your grant
You must evaluate whether it is most economical to lease rather than purchase equipment
and supplies.
Also, the fact that EPA approves your grant does not ensure EPA will allow the cost of all
activities or purchases you make under the grant, even if the activities and purchases are
identified in your application. If, at any time, EPA finds that an activity or purchase is not
necessary or does not comply with EPA regulations, EPA may disallow the cost. This includes,
for example, if EPA approves your grant application which indicated you would be using the
services of a contractor, but subsequently determines you did not obtain the contractor's services
in accordance with EPA's minimum standards, EPA may disallow the cost.
48
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CODE OF CONDUCT
You must have written standards of conduct which apply to employees involved
in the award and administration of contracts for supplies, equipment, and services.
(40 CFR 30.42). The code must ensure that:
• Your employee, officer or agent (employee) does not participate in the selection, award,
or administration of a contract under an EPA grant if the employee, any of the employee's
family members or partners, or an organization which employs or is about to employ any
of these persons, has a financial or other interest in the organization selected for the
contract. This would be an inappropriate conflict of interest.
• Your employee does not solicit or accept gratuities, favors, or anything of monetary value
from your contractors. You may, however, set standards for situations in which the
financial interest is not substantial or the gift is an unsolicited item of nominal value.
• If any of your employees violate the code, the code must make them subject to
disciplinary action.
EPA may disallow costs of purchases if you violate the Code of Conduct requirements.
v ... • ,
COMPETITION
You must, to the maximum extent practicable, ensure open and free
competition in your purchasing (40 CFR 30.43). Some situations that are
indicators of unnecessarily restricted competition include:
• Imposing unreasonable requirements on firms in order for them to
compete for your business.
Requiring unnecessary experience and excessive bonding.
Allowing noncompetitive pricing practices between firms or between affiliated
companies.
Making noncompetitive awards to consultants that are on retainer contracts.
Permitting organizational conflicts of interest.
Specifying only a "brand name" product instead of allowing "an equal" product to be
offered and describing the performance of other relevant requirements of the
procurement.
49
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0 Taking arbitrary actions which favor one firm over others.
COST AND PRICE REVIEW
Your purchasing system must ensure the cost or price of your supplies,
equipment, and services is reasonable (40 CFR 30.45). You do this by
conducting a cost or price analysis for each procurement action which you must
document in your files.
• Price analysis includes the comparison of price quotations submitted, market prices, bid
prices for firm fixed price contracts or similar information.
Cost analysis is the review and evaluation of each element of cost to determine
reasonableness.
You must determine the method and depth review based on the facts surrounding your particular
situation. As a starting point, you must make independent estimates of expected prices or costs
before receiving bids or proposals. Appendix A to this guidance explains the type of reviews
you must do in various situations.
DISADVANTAGED BUSINESS OPPORTUNITY
You must make positive efforts to use disadvantaged businesses, including
small businesses, minority-owned firms, women's business enterprises, and
firms in labor surplus areas, whenever possible (40 CFR 30.44(b)). Actions
you must take to accomplish this include:
Ensuring that small businesses, minority-owned firms, and women's business enterprises
are used to the fullest extent practicable.
Making information on future opportunities available and arrange time frames for
purchases which encourage and facilitate participation by disadvantaged businesses.
Place qualified disadvantaged businesses on solicitation lists and ensure these firms are
notified of opportunities.
Encouraging firms competing for larger contracts and which intend to subcontract to
consider ways to allow disadvantaged businesses to compete for the subcontracts by
dividing contracts, when economically feasible, into smaller tasks or quantities.
Encouraging contracting with consortiums of disadvantaged businesses when a contract is
too large for one of these firms to handle individually.
50
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• Using the services and assistance, as appropriate, of such organizations as the Small
Business Administration and the Department of Commerce's Minority Business
Development Agency in the solicitation and utilization of disadvantaged businesses.
• Requiring your prime contractors who award subcontracts to take these steps.
Your grant will include a term and condition requiring you to submit annual reports relating to
disadvantaged business utilization by October 30 of each year. The report must be prepared on
EPA form 5700-52A.
SOFTWARE AND WRITTEN MATERIALS
You may copyright any software or written material that is subject to copyright and
was developed, or for which ownership was purchased, under an award. EPA
reserves a royalty-free, nonexclusive and irrevocable right to reproduce, publish, or
otherwise use the work for Federal purposes, and to authorize others to do so. (40
CFR 30.36)
DEBARMENT AND SUSPENSION
You must ensure you do not award a contract to any person (organization or
individual) debarred or suspended or otherwise excluded from or ineligible for
participation in Federal assistance programs (40 CFR 30.13 and 31.35). You must
also ensure your contractor does not award a subcontract to any person debarred or
suspended or otherwise excluded from or ineligible for participation in Federal assistance
programs.
You can find the list of debarred, suspended, and excluded persons at: http://www.epls.gov/.
The list contains the names of persons debarred, suspended, or otherwise excluded by agencies,
and contractors declared ineligible under statutory or regulatory authority other than Executive
Order 12549 and 12689. (See also Part 30, Appendix A, 8.)
When searching this site, search by the name of the contractor, not by agency, to ensure all
debarred, suspended or otherwise excluded contractors are found. Some debarred contractors are
ineligible under only certain programs. You must check the cause and treatment code to
determine the circumstances related to each contractor. It may be necessary to contact the agency
which imposed suspension, debarment or exclusion to determine the effect of the action.
Please note that EPA anticipates that new regulations will be in place in 2004 that will require
that contracts of $25,000 or more awarded under EPA grants must prohibit contractors from
awarding subcontracts of $25,000 or more to persons (individuals or organizations) listed on the
51
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EPLS.
RECORDS
\
\
OL^ You must maintain records that detail the history of each purchase (40CFR 30.2 l(b),
30.46, and 30.53(b)). For purchases which exceed $100,000, these records must include
the rationale for the method of procurement, the reason you selected the contract type,
your justification for lack of competition when competitive bids or offers are not
obtained, the reasons for contractor selection or rejection, and the basis for the contract
price, including documentation of required price and cost analyses (Appendix A.).
CONTRACT PROVISIONS
You must ensure your contracts comply with applicable state and local law.
Your contracts must also reflect the provisions listed in Appendix B. If your
standard contracts meet the requirements of Appendix B, the clauses need not
be repeated.
If you suspect or you receive reports that a contractor violated the EPA required contract
provisions you must report those violations to your EPA project officer.
\ "•"'" '
Also, if your contract is subject to the Davis-Bacon Act, which requires contractors to pay wages
to laborers and mechanics at least equal to minimum wages specified in a wage determination
made by the Secretary of Labor, you must place a copy of the current prevailing wage
determination issued by the Department of Labor in each solicitation and the award of a contract
shall be conditioned upon the acceptance of the wage determination. You must report all
suspected or reported violations of Davis-Bacon Act requirements to the EPA project officer.
CONTRACT TYPES
You must decide which type contract is appropriate given the circumstances of
each purchase. You may use your standard contract types for contracts under your
EPA grant. Contract types include:
Fixed price contracts. Fixed price contracts are used when there will likely be effective
competition based on a complete product description and clear plans and specifications.
There should not be any significant technical or engineering unknowns. The contractor
must furnish the goods or services for the fixed price, and so assumes significant risk.
Profit is not stated or negotiated separately.
Cost reimbursable contracts. You should use a cost reimbursement contract when it is
not feasible to award a fixed price contract. The contractor's cost and profit must be
52
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negotiated separately. Often, the contractor must satisfactorily complete only the amount
of work equivalent to the estimated cost to qualify for the negotiated profit; the contractor
may not complete the entire project. Thereby, the contractor assumes less risk than under
a fixed price contract. Alternatively, you may negotiate a cost reimbursable contract
which includes a ceiling which may not be exceeded but which requires completion of the
work. In this situation, the risk to the contractor is increased.
• Cost Plus Type Contracts Prohibited. Percentage of construction cost and cost plus a
percentage cost contracts provide an incentive for the contractor to increase costs in order
to increase profit. These contract types must not be used.
CONSTRUCTION CONTRACT BONDS
You must ensure EPA's interest in construction or facility improvement
contracts under grants is adequately protected. Construction bid and bond
requirements are listed in Appendix C.
CHAPTER 2 - GRANT RECIPIENT PURCHASING METHODS
You must determine the purchasing method (examples below) and contract type that best
fits your needs and circumstances. v
SMALL PURCHASE METHOD
Small purchase is a relatively simple and informal method for purchasing
' supplies, equipment, and services that do not cost more than $100,000. (40
? CFR 30.44(d)(2)). (Your organization may have lower small purchase limits in
its procedures. If so, follow those limits.)
Generally, you should review catalogs or contact three or four organizations which can provide
goods or services meeting your needs and obtain price quotes. You should select the lowest
priced item or service which meets your requirements. You must, of course ensure:
• The employee selecting the offer does not have a conflict of interest with any of the
organizations contacted.
• You make it possible for and encourage disadvantaged businesses to provide offers, to the
extent possible.
• The offer is not from a debarred or suspended person.
• You clearly document why you selected other than the lowest priced supply, equipment,
53
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or service, if this is done.
• You keep files of the purchase, including the list of organizations contacted and the prices
of each.
You do not need to obtain bid or performance bonds for small purchases.
SEALED BID OR FORMALLY ADVERTISED PURCHASING METHOD
S1i
"\!\ 1 For purchases with an estimated price of more than $100,000, the sealed bid
| purchasing method is generally preferable to other methods if the successful
®&f \ |j bid can be determined based mostly on price. Under this method, you must
advertise for firm-fixed-price proposals or bids from organizations and firms able
*"" to do the work. You then award the contract (lump sum or unit price) to the
responsible bidder whose bid conforms to the terms and conditions of the solicitation and is the
lowest in price.
Sealed bidding is feasible if:
• You have a complete, adequate, and realistic specification or purchase description.
c.,.
• It is likely there are two or moreVesponsible bidders willing and able to compete for the .
contract.
• The purchase will result in a firm fixed price contract and the selection of the successful
bidder can be made principally on the basis of price.
If you use the sealed bidding method, you must:
Publically advertise an invitation for bids allowing potential bidders sufficient time to
prepare bids before the public bid opening. Advertisements should be published in
newspapers of general circulation, the Commerce Business Daily, trade journals, and your
purchasing web sites. They may also be sent to contractors who are likely to be interested
in providing the goods or services.
• The advertisement must make clear that any or all bids may be rejected if there is a sound
documented reason. The advertisement must contain:
- A clear, accurate description of the technical requirements-for the supplies,
equipment or service to be purchased.
- Requirements which the bidder must meet and all other factors, you will use to
evaluate bids or proposals.
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- A description, whenever practicable, of technical requirements in terms of
functions to be performed or performance required, including the range of
acceptable characteristics or minimum acceptable standards.
The specific features of "brand name or equal" descriptions that bidders are
required to meet when such items are included in the solicitation.
- The acceptance, to the extent practicable and economically feasible, of supplies,
equipment, or service dimensioned in the metric system of measurement.
- Preference, to the extent practicable and economically feasible, for products and
services that conserve natural resources and protect the environment and are
energy efficient.
• Take steps to involve disadvantaged businesses (see section on Disadvantaged
Business Utilization in Chapter 1), including sending known firms the advertisement
requesting bids.
• Indicate, in the advertisement, the location of any specifications and attachments
which define the item or supplies, equipment, or service to be purchased.
N
• Before bid opening, ensure none of the bidders are debarred, suspended, or
otherwise excluded. If any are, reject those bids before opening them.
• Publically open bids at the time and place announced in the advertisement.
• Award a fixed price contract to the lowest responsive and responsible bidder. Where
specified in bidding documents, factors such as discounts, transportation cost, and life
cycle costs may be considered in determining which bid is lowest. (If you do not intend
to accept the lowest bid for a contract over $100,000, notify the EPA project officer and
allow for EPA review, if requested. See Section on EPA pre-purchase review below.)
• Include, in the signed contract, the appropriate contract provisions. (See Appendix
B).
• If the contract is for construction work, require the contractor to provide
appropriate bid, performance, and payment bonds when the contract is signed. (See
Appendix C).
If you award the contract award to the lowest responsible bidder for a fixed price and there is
more than one bidder, no further price or cost review is required.
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COMPETITIVE PROPOSAL PURCHASING METHOD
When it is not appropriate to use the sealed bidding method (i.e., the
award cannot be made based primarily on price) for purchases
exceeding $100,000, the next most preferred method is generally
^ called the competitive proposal method. Under this method, you will
use factors such as capability of the bidder, relationship of the proposed
work to your needs, the qualifications of the bidders staff, the availability of necessary resources,
the likelihood of the bidder's success, and the price. The contract will normally be a fixed price
or a cost reimbursement type contract.
If you choose to select a contractor using the competitive proposal method, you must:
Publically advertise for proposals identifying the nature of supplies, equipment, or
services needed, the evaluation factors and their relative importance, a preference, to the
extent practicable and economically feasible, for products and services that conserve
natural resources and protect the environment and are energy efficient.
• Take steps to involve disadvantaged businesses (see section on Disadvantaged
Business Utilization in Chapter 1), including sending known firms the advertisement
requesting offers. *
Develop a system for conducting technical evaluations of the proposals to select the
successful bidder.
Using the evaluation system and the criteria in the advertisement, select the
responsible firm whose proposal is most advantageous, with price and other factors
considered.
• Include the appropriate contract provisions in the signed contract. (See Appendix
B.)
• If the contract is for construction work, require the contractor to provide
appropriate bid, performance, and payment bonds when the contract is signed.
• If the contract award is not for a firm-fixed price, conduct a cost review to ensure
the price is reasonable. Your contractor must furnish estimated cost information, stating
profit separately, to allow you to complete the review. (See Appendix A.)
To obtain architectural/engineering (A/E) professional services, you may use a
qualifications-based form of the competitive proposal method. The difference between this
method and the normal competitive proposal method is that, after you open bids, you may
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evaluate competitors' qualifications and select the most qualified competitor, subject to
negotiation of fair and reasonable compensation. Price is not a selection factor. You then
negotiate a price with the most qualified firm. If you cannot reach agreement on price with that
firm, reject the bid and open negotiations with the next most qualified firm. In other respects,
this method is similar to the competitive proposal method and you must conduct a cost review
before agreeing on price. (See Appendix A.)
NON-COMPETITIVE NEGOTIATION OR SOLE SOURCE PURCHASING METHOD.
The noncompetitive negotiation purchasing method is appropriate when
none of the other methods are appropriate based on the circumstances.
This method ishould be used sparingly in unusual circumstances.
Appropriate circumstances inlcude if:
• You determine the item or service is available only from one source. The fact that you
have a long standing relationship with a contractor does not mean the item or
service is available from only one source.
• You determine public exigency or emergency will not permit a delay resulting from
competition.
• The contract amount exceeds $100,000 and you request and obtain EPA approval to use
the noncompetitive proposal method for some other reason.
• In response to an advertisement for bids or proposals, only one bidder responds.
You must conduct a cost review of noncompetitive proposals. (See Appendix A.) In
evaluating whether a sole source purchase is jsutified, your cost review should consider the
contractor's charges for similar work for customers who are not using Federal funds.
You should contact the EPA project officer before using the non-competitive proposal
purchasing method for professional services contracts and equipment purchases even if he
contract amount is less than $100,000. EPA may include a term and condition in grants where
purchases may exceed $100,000 requiring you to contact the project officer before making sole
source purchases. The project officer will likely instruct you to submit the proposed contract and
related information, including cost information provided by the bidder and your justification for
the non-competitive method, for EPA review.
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CHAPTER 3 - EPA REVIEW OF GRANT RECIPIENT PURCHASES
EPA and other Federal agency staff may review actions related to your purchasing before or after
award. The fact that EPA approves your grant does not ensure EPA will allow the cost of all
activities or purchases you make under the grant, even if the activities and purchases are
identified in your application. If, at any time, EPA finds that an activity or purchase is not
necessary or does not comply with EPA regulations, EPA may disallow the cost (40 CFR
30.62(a)(2)). This includes, for example, if EPA approves your grant application which indicated
you would be using the services of a contractor, but subsequently determines you did not obtain
the contractor's services in accordance with EPA's minimum standards, EPA may disallow the
cost.
EPA PRE-PURCHASE REVIEW
If required by a term and condition of your grant, you must offer the EPA
project officer the opportunity to review information related to your purchases
a before you sign contracts if (40 CFR 30.45(e)):
• Your purchasing procedures or operation fail to comply with EPA standards and
regulations (i.e., this guidance). \ '" '
• Your purchase is expected to exceed $ 100,000 and is to be awarded without competition
or you receive only one bid or offer which exceeds $100,000 in response to a solicitation.
• Your purchase exceeds $ 100,000 and specifies a "brand name" product.
Your proposed contract exceeds $100,000 and is to be awarded to other than the apparent
low bidder under a sealed bid procurement.
• You propose a contract modification which changes the scope of your contract or
increases the contract amount by more than the $100,000.
You must contact your EPA project officer for guidance as soon as you are aware of any of
these situations.
If you are a new recipient of an EPA award or if you have had purchasing problems under
previous EPA grants or reviews, EPA's project officer or grants specialist may review your
procurement system before approving an award. EPA will contact you in such cases.
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EPA POST PURCHASE REVIEW
EPA may also review your source documentation for purchases after they
are made (40CFR 30.21 (b), 30.46, and 30.53(b)). EPA staff may review your
management systems for compliance with EPA requirements. We may
conduct a desk review, in which case we will review any information we have
in our files, find on the internet, or request and receive from you. This may include information
related to particular purchases. We may also conduct a review at your location (on-site review).
The reviewers will evaluate much the same information as under a desk review. EPA staff will
contact you to arrange on-site reviews so they are as convenient as possible for you. Our review
will evaluate your compliance with EPA requirements, including Disadvantaged Business
Utilization, contract clauses, record keeping, cost and price review, as well as your purchasing
methods.
SINGLE AND EPA AUDIT
If you spend $300,000 ($500,000 for fiscal years ending after December 31,
2003) or more in a year in Federal (not just EPA) grant funds, you must
obtain a single or program-specific audit in accordance with the requirements
of OMB Circular A-133.. You can find the'Circular at:
http://www.\\hitehouse.uov/omh/cireulars/a 133/al 33.html
If you receive only one federal grant and elect to do a program specific audit, it is likely your
auditor will review your purchasing practices under EPA's grant. If you elect to have your
auditor conduct a single audit, the auditor may review your EPA grant purchases.
Also, EPA's Office of Inspector General or the General Accounting Office (GAO) may conduct
an audit of your EPA grants. EPA and GAO auditors are likely to review yourpurchasing system
as well as your purchases. These audits will be planned and performed in such a way as to build
upon work performed by your auditors.
APPENDIX A
CONDUCTING PRICE AND COST REVIEWS
EPA regulations require you to conduct a price or cost review for each purchase you
make to support you grant (40 CFR 30.45).
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PRICE REVIEW
A "price review" is an evaluation of a proposed price, without regard to the contractor's separate
cost elements and proposed profit, to determine the price is reasonable. Before completing a
purchase, you must conduct a price review for each small purchase ($100,000 or less) and for
each fixed price contract. The following guide will assist you in completing required price
reviews.
Cost Estimate - Develop an independent cost estimate for the supplies, equipment, or service
you will be purchasing. This estimate may be based on such things as you and your staffs
experience with similar purchases, a review of catalog or off-the-shelf prices, prices or costs for
similar services provided to customers who do not receive Federal funds, or other relevant
information. If detailed plans and specifications for a fixed price contract are developed for
bidders, the person or firm developing those plans should develop a detailed price estimate.
Comparison of Prices - Compare prices obtained from catalogues, suppliers, or bidders to your
independent estimate.
Price Reasonableness -
A. If the offerer or bidder's price appears reasonable based on your independent estimate
and other appropriate information, purchase the supply, equipment, or service.
B. If the offerer or bidder's price is significantly higher than your independent estimate,
review your requirements to determine whether unnecessary, overly restrictive, or
complex requirements caused the higher than expected price. (Even if the price is
significantly lower than expected, you should review the stated requirement or plans and
specifications to ensure they are complete and will result in the supply, equipment, or
service you need.) It may help, in making your determination, to talk to those providing
quotes or bids.
1. If, after this evaluation, you determine the price is reasonable, considering the
circumstances, purchase the supply, equipment, or service.
2. If you determine inappropriate requirements for the supply, equipment, or
service resulted in an unreasonable price or the price is unreasonable, make
adjustments and obtain new offers or bids.
COST REVIEW
A "cost review" is the evaluation of each major contract cost category to determine
reasonableness of each category and of the total cost of a contract or change order. Cost review
should be done under negotiated cost type contracts, not fixed price contracts. Cost categories
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include personnel, fringe benefits, travel, subcontracting, indirect costs, profit and the like.
To obtain the information you need to conduct a cost review, you must require your offerers to
provide cost data with their offers. EPA does not provide a form for this price data, so unless
you prescribe a form, offerers may submit their cost data in any appropriate format. The offerer
should certify that the information reflects complete, current, and accurate data.
The following is a general list of cost categories under which contractors will submit cost
information and guidance on how you should evaluate each category:
Personnel Costs - Costs for labor directly related to the contract.
For Example the offerer will likely provide information that looks like this :
Category
Professional
Nonprofessional
Clerical
Estimated
Hours
300
2000
800
X
X
...X
Hourly
Rate
$30.00
25.00
15.00
Total Direct Personnel Cost
=
=
=
$ 9,000
50,000
12,000
$71,000
Consider:
A. Whether the level of effort or the total amount of time proposed is consistent with the
effort required to complete the contract.
B. The labor mix or the labor categories proposed to ensure they are consistent with the
difficulty and technical nature of the work - professional versus nonprofessional versus
clerical.
C. The proposed salaries, including reasonable escalation factors to ensure they are
consistent with the offerers' actual pay scales. Generally, the conversion of annual
salaries into hourly rates is accomplished by dividing the annual salary by 2,087 hours
(assuming an 8 hour work day).
Fringe Benefits - Personnel costs other than employees' direct salary or pay (i.e., employer's
portion of PICA insurance, retirement, sick leave, holiday pay, and vacation cost. While these
costs are normally accumulated in a pool and allocated using percentages as shown below,
offerers may calculate actual fringe benefit costs for each employee who will work on your job.
Either method is acceptable if applied consistently.
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Example:
Category
Professional
Nonprofessional
Clerical
Estimated
Fringe
Benefit Rate
10%
10%
10%
X
X
X
Total
Hourly
Pay
$9,000
50,000
12,000
Total Fringe Benefit Cost
=
—
=
Fringe
Benefit
Amount
$ 900
5,000
1,200
$7,100
Consider:
A. Whether the fringe benefit rate applied to the direct labor base corresponds to fringe
benefits available to each of the proposed labor categories and are consistent with the
offerer's established benefits package.
\ '
B. Whether the offerer's PICA and unemployment insurance are applied only up to the
maximum salary limits established by statute, if any.
Indirect Costs - Indirect costs are costs which cannot be charged to a project specific activity.
Indirect costs often include office space, equipment depreciation, and personnel costs for clerical
pools, executive salaries, and administrative support. Each organization determines the costs it
will include in its indirect cost pool, and the organization must treat the costs the same if the
circumstances are alike. Indirect costs are allocated to the particular contracts based on a fair
method of approximation, generally a percentage of a specific set of direct costs under the
contract. Indirect costs are also referred to as overhead or burden costs.
Indirect costs should be logically grouped and compared to some part or all of the organization's
direct costs (the base). The most popular base is direct labor; however, there are instances where
an equitable allocation cannot be made using this base.
Example:
Category
Indirect Cost
Rate
50%
X
Direct Labor
Base
$71,000
Cost
$35,000
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I Total Indirect Cost
$35,000 |
Consider:
A. Whether the allocation base is an equitable basis for distribution.
B. The proposed overhead rate to ensure it is the same as that used for the offer's other
contracts.
Travel and per Diem Costs - Travel costs include transportation, per diem or subsistence, and
other reasonable travel related items directly related to the contract.
Example:
Transportation
POV Office to job site and
return
POV Office to EPA and
return
Transportation
Flight to attend contract
related meeting
Per Diem
Number of
Miles
50
v20
Origin
Dallas
Number of
Days
10
X
'X'
X
Rate per
Mile
$ .30
.30
Dest
Waco
Rate per
Day
$75.00
Total Travel and Per Diem Cost
=
=
Amount
$15.00
$6.00
$210.00
$750.00
$991.00
Consider:
A. Whether the proposed travel is necessary to complete the contact.
B. Whether all people traveling on a trip are necessary.
C. The cost per trip.
D. Whether the per diem or subsistence allowance is the same for other travel by the
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offerer's personnel.
Supply. Material and Equipment Costs - Offerers will often have costs for supplies, material,
and equipment (items with an acquisition cost of $5,000 or more), material, and supplies directly
related to the contract.
Example:
Item
Recording Barometers
Wind Turbine Generator
Incremental Water
Quality Samplers
Aluminum Tubing
Miscellaneous
Supplies
Quantity
5
1
5
1500 ft.
X
X
X
X
Cost per
Item
$ 455
6,370
1,600
.70ft.
i
Total Equipment, Materials, Supply Cost
=
=
Cost
$ 2,275
6,370
8,000
1,050
2,105
$19,800
Consider:
A. Whether the proposed equipment (items with a unit acquisition cost of $5,000 or
more) is needed to complete the contract.
B. Whether it would be better to lease or rent the equipment as opposed to purchasing it.
C. Whether proposed materials and supplies are needed and the cost appears reasonable.
Subcontract Costs - Subcontracts are contracts awarded by your contractor.
Example:
Total Subcontract Costs (Should
be broken down among categories
if subcontract exceeds $100,000.)
Profit
Price
$100,000
10,000
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Total Cost
S1 10.000 I
Consider:
A. The procedures for cost review of subcontracts in excess of $100,000 are the same as
for a prime contract, so you will need detailed cost information.
B. For subcontracts of $100,000 or less, you may conduct an abbreviated review,
evaluating only the cost and profit of each subcontract. (Profit for offerers and
subcontractors should be evaluated based on the profit section below.)
Profit - Profit is the amount paid to a contractor above the total cost of the contract.
You should ensure that contractors of negotiated contracts are paid only fair and reasonable
profits. There are no hard and fast rules to use when reviewing the amounts of profit.
Example:
Total Direct & Indirect
Costs
Front
Price
',
$100,000
10,000
:
Total Cost
$110.000
Consider:
A. The offerer's risk. Generally, the greater the risk the contractor assumes, the higher the
rate of profit. Contractors assume greater risks on fixed-price contracts involving complex
or difficult tasks as opposed to cost reimbursement contracts.
B. Profits may also be higher if the contractor incurs significant capital costs, exercises
considerable ingenuity, or does independent developmental work.
C. Percentage of construction cost and cost plus a percentage cost contracts provide an
incentive for the contractor to increase costs in order to increase profit. These contract
types must not be used.
Cost Review Findings
After you complete a cost review, you must determine whether the proposed contract cost is
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reasonable. If the individual items are reasonable, the total cost is reasonable. You should award
the contract.
A. If you find an individual cosl is not reasonable, you should discuss the cost with the
contractor. If, based on the contractor's justification, you and the contractor reach
agreement that the cost is reasonable, accept the cost. If you and the contractor agree the
cost is excessive, negotiate a reduction to a reasonable amount and accept the cost.
B. If you cannot agree with the contractor concerning the reasonableness of proposed
costs, reject that contractor's offer. If the next best offer meets your requirements, you
should review proposed cost information for that contractor. Follow the same review and
negotiation process as above for the new contractor's proposed costs.
»»
Documentation
Document all actions in conducting each price or cost review. Ensure all price and cost reviews
are described and retained in your records in accodance with your record retention requirements
or EPA's.
APPENDIX B
\
CONTRACT PROVISIONS
You must ensure your contracts are sound and complete and comply with
applicable state and local law. Your contracts must also reflect the provisions
required by federal law and EPA regulations which are listed below (40 CFR
30.48). To the extent these requirements are met by provisions in your standard contracts, they
need not be repeated.
1. Remedies - Contracts in excess of $100,000 must include administrative, contractual, and
legal remedies for use in cases in which contractors violate or breach contract terms. The
contract must also make clear the remedial actions which you may take.
2. Termination - Contracts in excess of $100,000 must explain the conditions under which you
may terminate them for your convenience, in event of a contractor's failure, or in event of event
beyond the control of the contractor; the process for bringing about the termination; and the basis
for settlement. ^
3. Equal Employment Opportunity - Construction contracts in excess of $10,000 must require
compliance with Executive Order 11246, "Equal Employment Opportunity," as amended by
Executive Order 11375, "Amending Executive Order 11246 Relating to Equal Employment
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Opportunity," and as supplemented by regulations at 41 CFR Part 60, "Office of Federal
Contract Compliance Programs, Equal Employment Opportunity, Department of Labor."
You can find information on Equal Employment Opportunity in the Department of Labor web-
site at:
http://library.dol.gov/doiycompliance/comp-eeo.htm
4. Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40 U.S.C. 276c) - Construction
contracts which exceed $100,000 must require compliance with the Copeland "Anti-Kickback"
Act (18 U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR part 3,
"Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in
Part by Loans or Grants from the United States"). The Act prohibits contractors from inducing,
by any means, any person employed in the construction, completion, or repair of public work, to
give up any part of the compensation to which he is otherwise entitled.
You can find information on the Copeland "Anti-Kickback" Act on the Department of Labor
web-site at:
http://www.dol.gov/dol/compliance/comp-copeland.htm
5. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7) - Some EPA grant authorizations
require construction contracts awarded under EPA grants which exceed $2000 to require
compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7), as supplemented by Department
of Labor regulations (29 CFR part 5, "Labor Standards Provisions Applicable to Contracts
Governing Federally Financed and Assisted Construction"). Under this Act, contractors must pay
wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage
determination made by the Secretary of Labor. In addition, contractors must pay wages not less
than once a week.
You can find information related to the Davis-Bacon Act, including prevailing wage rates, on the
Department of Labor web-site at:
http://www.dol.gov/dol/compliance/comp-dbra.htm
6. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333) - (a) Construction
contracts which exceed $100,000 or other contracts that involve the employment of mechanics or
laborers which exceed $2,500 must require compliance with sections 102 and 107 of the Contract
Work Hours and Safety Standards Act (40 U.S.C. 327-333), as supplemented by Department of
Labor regulations (29 CFR part 5). Under section 102 of the Act, each contractor must compute
the wages of every mechanic and laborer on the basis of a standard 40 hour work week. If a
mechanic or laborer works more than 40 hours in a week, the contractor must pay the worker at a
rate of not less than one and 1A times the basic rate of pay for all hours worked in excess of 40
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hours in the work week.
(b) Construction contracts which exceed $ 100,000 must provide that no laborer or mechanic
may be required to work in surroundings or under working conditions which are unsanitary,
hazardous or dangerous. (This requirement does not apply to the purchase of supplies or
materials or articles ordinarily available on the open market, or contracts for transportation or
transmission of intelligence.)
You can find information on the Contract Work Hours and Safety Standards Act on the
Department of Labor web-site at:
http://library.dol.gov/dol/compliance/comp-cwhssa.htm
7. Rights to Inventions - Experimental, developmental, or research work contracts must
provide for both your and EPA's rights in any resulting invention (see 37 CFR part 401, "Rights
to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government
Grants, Contracts and Cooperative Agreements").
8. Access to Records - Negotiated contracts which exceed $100,000 must allow you, EPA, the
Comptroller General of the United States, or any of their duly authorized representatives, access
to any books, documents, papers and records of the contractor directly pertinent to your contract
for the purpose of making audits, examinations, excerpts and transcriptions (40 CFR 30.48(d)).
9. Debarment and Suspension - Contracts which exceed $100,000 must prohibit contractors
from awarding subcontracts to persons (individuals or organizations) listed on the Excluded
Parties Listing System (EPLS) which is found at:
http://www.epls.gov/.
The list contains the names of persons debarred, suspended, or otherwise excluded by agencies,
and contractors declared ineligible under statutory or regulatory authority other than Executive
Order 12549. Contractors with awards that exceed the small purchase threshold shall provide the
required certification regarding its exclusion status and that of its principal employees. (See
Appendix A, 8.)
10. Energy and Environmental Conservation. - Contracts must require contractors to give
preference, to the extent practicable and economically feasible, to products and services that
conserve natural resources and protect the environment and are energy efficient (30.44(a)(3)(vi)).
11. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352) - Contractors who apply or bid for an
contract of more than $100,000 must file a certification that it will not and has not used Federally
appropriated funds to pay any person or organization for influencing or attempting to influence
an officer or employee of any agency, a Member of Congress, officer or employee of Congress,
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or an employee of a Member of Congress in connection with obtaining your grant. The contract
must also require that any subcontractor who applies or bids for subcontract in excess of
$100,000 must provide a similar certification to the next higher tier contractor or subcontractor.
Contractor and subcontractors must also disclose any lobbying with non-Federal funds m
connection with obtaining the grant. Each contractor or subcontractor must forward any
disclosures from tier to tier up to the recipient.
APPENDIX C
CONSTRUCTION CONTRACT BONDS
v! You must ensure EPA's interest in construction or facility improvement contracts
*' under grants is adequately protected. You must at least meet the following minimum
standards (40 CFR 30.48(c)).
1. For construction or facility improvements contracts which are $100,000 or less, unless your
grant indicates otherwise, you may follow your own requirements relating to bid guarantees,
performance bonds, and payment bonds. The grant will include a term and condition advising
you of any additional EPA requirements if required by statute.
\
2. For construction or facility improvements contracts which exceed $100,000, unless EPA
authorizes different limits or requirements, you must require:
— Bidders to provide a bid guarantee equivalent to five percent of the bid price. The bid
guarantee may be a firm commitment such as a bid bond, certified check, or other
negotiable instrument accompanying a bid to ensure the bidder will accept award of a
contract if you accept the bidder's bid.
— Successful bidders to provide a performance bond for 100 percent of the contract
price to ensure fulfillment of the contractors' obligations under the contract.
- Successful bidders to provide a payment bond for 100 percent of the contract price.
A payment bond ensures payment as required by statute to all persons supplying
labor and material under the contract.
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RECIPIENTS ROLES AND RESPONSIBILITIES DURING POST AWARD
APPLICANTS ITEMIZED.BUDGET
In order for you the recipient to successfully perform a cost review of tfie charges to your
assistance agreement, you first have to become familiar with the principles of
allowability, reasonableness, allocability, consistency and conformance. The cost
principle tests highlighted below are important tools to help you in the judgments you,
EPA and other Federal staff will make before, during, and after performance concerning
the costs that EPA will fund, and to indicate the variety of factors that will be taken into
account hi determining the allowability of costs.
Allowability: A cost may be considered allowableto be paid with Federal assistance
funds if it conforms to the guidance provided by the applicable cost principles and meets
all of the tests below.
Reasonableness: A cost may be considered reasonable if the nature of the goods or
services acquired or applied and the associated dollar amount reflect the action that a
prudent person would have taken under the circumstances prevailing at the time the
decision to incur the cost was made. The cost principles elaborate on this concept and
address considerations such as whether the cost is of a type generally necessary for the
organization's operations or the grant's performance; whether the recipient complied with
its established institutional policies in incurring the cost; and whether the individuals
responsible for the expenditure acted with due prudence in carrying out their
responsibilities to the Federal Government and the public at large as well as to the
organization.
Allocability: A cost is allocable to a specific grant, function, department, etc., known as
a cost objective, if the goods or services involved are chargeable or assignable to that cost
objective in accordance with the relative benefits received or other equitable relationship.
A cost is allocable to a grant if it is incurred solely in order to advance work under the
grant; it benefits both the grant and other work of the institution, including other
grant-supported projects; or it is necessary to the overall operation of the organization and
is deemed to be assignable, at least in part, to the grant.
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Indirect Cost: Same as overhead costs. Applicants are required to explain how
indirect costs were calculated and if those costs are in accordance
with a indirect cost rate agreement.
Program income' Some funded projects generate program income. When an
applicant anticipants program income, they should include an
estimate on the face page of the application under block number IS.
Recipient's should discuss, with their EPA Project Officer, disposition of program
income. Program income can be used to defray the cost of the project or use to
supplement additional activities if approved by the EPA Project Officer. The recipient is
responsible for ensuring that program income is used in accordance with the Term and
Condition on their assistance agreement. Program income must be accounted for in the
accounting system.
Cost Share: Cost share are costs contributed by the applicant to complete the
statement of work under the application. Cost share may vary by program
and be mandatory by statute.
Indirect Costs
In addition to direct costs, the EPA supports a policy of full reimbursement of indirect
costs also known as facilities and administrative (F&A) costs or overhead for most grants
programs. Indirect costs are those costs of an institution or organization that are not
readily identifiable with a particular project or activity but are necessary to the'general
operation of the organization and the conduct of its grant activities.
Allowable indirect costs may include:
if Depreciation use allowance;
* Facilities operations and maintenance;
^r General administration and general expense;
"A" Departmental administration; and
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* Sponsored project administration
These costs are documented and assigned to the indirect pool from which they are
distributed to all activities of an organization on the basis of a rate. The rate is a ratio of
the indirect costs to a direct cost base.
An indirect cost rate is simply a device for determining fairly and expeditiously the
proportion of general (non-direct) expenses that each project will bear. It is the ratio
between the total indirect costs of an applicant and some equitable direct cost base.
Indirect Cost Pool ^ Indirect Cost
Direct Cost Base Rate
The indirect cost base or bases (that is, the denominators) of the fraction producing a
rate) should be selected so as to permit an equitable (distribution of indirect costs to the
benefitting cost objectives.
The amount awarded for indirect costs is determined by multiplying the rate times the
total amount of allowable costs in the direct cost base for the project. Assistance
agreements should not be charged for an item of cost both directly and indirectly.
This practice is commonly referred to as double charging.
Rate Agreement
To be reimbursed for indirect costs, the grantee organization must prepare an indirect
costs rate proposal annually and submit it to the cognizant Federal agency. The cognizant
agency is generally the agency that provides the largest amount of funds to a grantee over
a representative period. The cognizant agency acts as a representative for all Federal
agencies dealing with a grantee's common costs (e.g., F&A costs and fringe benefits).
After review and negotiation of the indirect costs rate proposal, the cognizant agency
establishes an accepted rate, formalized as the indirect costs rate agreement for that
organization, and makes it available to all other interested Federal grantor agencies. The
negotiated indirect costs rate is used to calculate the applicable amount of indirect costs
for each award to the grantee organization.
The EPA Notice of Grant Award includes both direct costs and the applicable indirect
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costs calculated by the recipient in their application and verified by the grants specialist.
These funds are the maximum amount awarded during the budget period even if a higher
indirect cost rate is subsequently negotiated. If the amount of funds required for indirect
costs decreases because of a new negotiated rate or because of post-award budgetary
changes in the direct costs of the grant, the excess indirect cost funds generally may be re-
budgeted to support allowable direct costs for the project, subject to specific
requirements set forth in the applicable cost principles.
If your organization does not currently have a indirect cost rate negotiated with a Federal
agency and the organization is charging indirect costs to an assistance agreement it is
important for your organization to prepare and submit an initial indirect cost proposal to
its cognizant agency immediately after the organization is advised that an award will be
made and, hi no event, later than three months after the effective date of the award.
Suggested Term and Condition: In accordance with OMB Circular A-122 EPA requires
that all non-profit organizations which have not previously established an indirect cost
rate with a Federal agency shall submit to their cognizant agency their initial indirect cost
proposal immediately after the . rfdjffcr- organization is advised that an
award will be made and, in no event, ^S^^Hl rlater man mree months after the
effective date of the award.
EPA's Policy for Assistance Agreement Recipients Post Award Management
Post-award management is a means to provide the Environmental Protection Agency
(EPA) with some assurance that federal financial award recipients are meeting the terms
and conditions of their assistance agreements. Post-award monitoring is a crucial
component in ensuring the success of the Agency's many assistance agreement programs.
Post-award monitoring and compliance assistance are not intended to be punitive, but
rather should assist you the recipient in carrying out your assistance agreements.
The Grants Management Office (GMO) at EPA serves as a source of administrative
oversight for aU EPA assistance agreements. The EPA Project Officer serves as the
source of technical oversight for all EPA assistance agreements. Additionally, the
GMO also serves as the liaison between the EPA Project Officer and the recipient's
project manager and administrative staff with regard to the administrative aspects
of the assistance agreement.
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Baseline Monitoring
Baseline Monitoring is EPA's minimum, basic monitoring that should take place on every
award issued at least once, a year by both the Grants Specialist and the Project Officer.
Baseline Monitoring will include ensuring that award terms and conditions are satisfied,
progress reports are received, A-133 audits are filed (as applicable), any Quality
Assurance term and condition met and Financial Status Reports filed. During this
process, the Grant Specialist (or other designated personnel) will make contact with
the Project Officer and the recipient At this time, the Grant Specialist will also review
the financial status of the award by comparing funds available to project progress and/or
time remaining on the project. If follow-up is needed, the Grant Specialist will do so.
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Advanced Monitoring
Advanced Monitoring is the process by which a recipient's compliance with applicable
administrative and financial statutes, regulations, conditions and policies is evaluated.
This can take place through the use of On-site Evaluations or Desk Reviews.
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Non-Compliance with Award - Applicable to All Programs
Remedies for noncompliance with the assistance agreement will vary according to the
circumstances and will be discussed between the EPA grants management officer, grant
specialist, project officer and/or other involved staff (e.g. Quality Assurance Officer,
Finance Unit, etc.), as appropriate. EPA officials are faced with a wide range of potential
problems involving participants in the assistance process. The participant may be an
assistance recipient, a contractor, a subcontractor, or a supplier to a recipient. In some
cases, the problem may involve a technical matter which can easily be resolved by
informal discussions with the participant. At other times, the matter may involve
nonperformance, poor performance, or a criminal matter which places the Agency's
assistance programs at significant risk.
To deal with noncompliance or high risk participants, Award Officials may: impose
special conditions on the award, find a person or organization to be non-responsible,
issue stop work orders, withhold payment of funds, terminate or annul an award, or
initiate an investigation to determine if further action is necessary.
Further, after all administrative remedies are exhausted^ the EPA Debarment Official may
suspend and/or debar any person or organization from participation in all EPA assisted
activities for a specified period of time.
Basic Understanding of Recipients Financial Management Requirements for
Recipients;
The following discussion points outline the minimum financial management standards
that recipients must comply with to safe guard federal funds. Grants Management Offices
have the responsibility to provide guidance to recipients on these areas. Desk Reviews
and On-Site Reviews conducted by the GMO will include a coverage of the recipients
financial management system.
Standards for Financial Management Systems
Financial Management Standards: Recipients financial management systems must
provide accurate, current and complete disclosure of the financial results of each
Federally-sponsored project (40 CFR 30.21 (b)(l). Records must also identify the source
and application of funds for Federally-sponsored activities. Costs incurred must be
allocated to the proper funding source. Funds from one source cannot be shifted to
another sponsored agreement in order to meet deficiencies caused by overruns or for
convenience, etc.
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Codes of Conduct 40 CFR 30.42 requires that recipients must maintain written standards
of conduct governing the performance of their employees engaged in the award and
administration of contracts. No employee, officer, or agent shall participate in the
selection, award, or administration of a contract supported bv Federal funds if a real or
apparent conflict of interest would be involved.
Competition 40 CFR 30.43 requires that all procuremeni transactions will be conducted
in a manner to provide, to the maximum extent practicable, open and free competition. If
competition is not performed, the recipients procurement records must contain a
justification for a lack of competition in accordance to 40 CFR 30.46.
Cost and Price Analysis 40 CFR 30.45 requires that some form of cost or price analysis
must be made and documented in the procurement file in connection with every
procuremeni action.
Procurement Procedures 40 CFR 30.44 (a) - Recipients must establish written
procurement procedures.
Consultant Cap: 40 CFR 30.27 (b) states that consultants retained by a recipient
organization or by their contractors or subcontractors will be paid with assistance funds a
salary rate (excluding overhead) equivalent to the maximum daily rate for level 4 of the
Executive Schedule. This limitation applies to consultation services of designated
individuals with specialized skills who are paid an hourly or daily rate. Recipients can
only use assistance funds to pay costs under this limit. Recipients will have to reimburse
EPA for all costs paid by the assistance agreement that exceed the daily rate.
Internal Policies: Time and Attendance - In accordance with OMB Circular A-122,
"Cost Principles for Non-Profit Organizations" Attachment B Section 7 (m), reports
reflecting the distribution of activity of each employee must be maintained for all staff
members to show the amount of time spent by an employee of more than one project or
program. Distribution records must cover the total payroll period. Employees'
distribution records must at a minimum be signed and dated by either the employee or the
supervisor. Universities and recipients who use A-21 have different requirements and
should refer to the cost principles for guidance.
Travel Policy - In accordance with OMB Circular A-122 Attachment B Section 55, travel
costs may be charged on an actual basis, on a per diem or mileage basis in lieu of actual
costs incurred, or on a combination of the two, provided the method used results in
charges consistent with those normally allowed by the organization in its regular
operations. If there is no written travel policy, Federal rates for travel will be
enforced.
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You can view a complete copy of 40 CFR Parts 1-73 at:
hup:''-\vwtt .access.L'DQ.gov.nara/cfr/waisidx. OU/40cfr3() Ov).html
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T^OS?
Reports
SF 269, "Financial Status Report" (FSR): The FSR provides information on the total
amount expended versus the total grant award. The FSR is required at the end of the
award and is due 90 days after the end of budget period. For assistance agreements issued
out of EPA's headquarters the recipient will send their report to the Las Vegas Financial
Management
Request for final payment: The recipient must submit a final SF 270, "Request for
Payment," or SF271, "Outlay Report and Request for Reimbursement." For Headquarters
awards, the Las Vegas Financial Management Center will correspond directly with the
recipient to financially closeout the assistance agreement.
Performance Reports: The Performance Report is perhaps the EPA's best source of
information on how your project is progressing. Each Program Office determines what
information they need to adequately monitor the recipient's progress. The report will at a
minimum require information on the rate of expenditure versus progress on the project,
actual accomplishments, and problems encountered during the performance period which
may interfere with meeting program/ project objectives as outlined in 40 CFR 30.51 (a)
(1). Your EPA project officer will review each of your reports to determine how the
project is progressing. If there appears to be a problem(s), the project officer will work
with you the recipient to resolve it. Some solutions may mean getting the Grants
Specialist and the EPA Office of General Council involved. The recipient should never
let a problem go unresolved. Also, the recipient should document how each problem
was resolved. This will come in handy if there is a question later on, e.g., during an audit.
The frequency of Performance Reports will vary with the program and is usually required
by regulation or program policy. The frequency of your reports on assistance agreements
from EPA Headquarters will be defined in a Term and Condition on the award document.
Form 5700-52A; EPA form 5700-52A (MBEAVBE Utilization Under Federal
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Grants, Cooperative Agreements, and Interagency Agreements) must be submitted to
the "EPA Award Official by October 30 of each year for all non-profit recipients.
Recipients are also required to follow the six affirmative steps to ensure that positive
efforts have been made to utilize small businesses, minority-owned firms, and women's
enterprises, whenever possible as outlined in 40 CFR 30.44(b) and listed below.
(b) Positive efforts shall be made by recipients to utilize small businesses,
minority-owned firms, and women's business enterprises, whenever possible. Recipients
of Federal awards shall take all of the following steps to further this goal.
(1) Ensure that small businesses, minority-owned firms, and women's business enterprises
are used to the fullest extent practicable.
(2) Make information on forthcoming opportunities available and arrange time frames for
purchases and contracts to encourage and facilitate participation by small businesses,
minority-owned firms, and women's business enterprises.
(3) Consider in the contract process whether firms competing for larger contracts intend
to subcontract with small businesses, minority-owned firms, and women's business
enterprises. \ ";" '
(4) Encourage contracting with consortiums of small businesses, minority-owned firms
and women's business enterprises when a contract is too large for one of these firms to
handle individually.
(5) Use the services and assistance, as appropriate, of such organizations as the Small
Business Administration and the Department of Commerce's Minority Business
Development Agency in the solicitation and utilization of small businesses,
minority-owned firms and women's business enterprises.
(6) If the prime contractor awards subcontracts, requiring the contractor to take steps in
paragraphs (b)(l) through (5) of this section.
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Changes to Awards
Certain post-award changes cannot be made without a formal
amendment to the agreement. However, recipients are permitted to rebudget within the
approved direct cost
budget to meet unanticipated requirements and may make limited program changes to the
approved project. A recipient's written request for a change must be accompanied by
a narrative justification for the proposed revision, and must be submitted to the
EPA Project Officer.
Any change to add work/ tasks/ activities must meet the principle purpose test of the
Federal Grant and Cooperative Agreement Act.
CHANGES WHICH REQUIRE A, FORMAL-AMENDMENT ' .
G Any revision resulting in the increase or decrease in funds.
G Revisions to the objectives or scope of the project.
G. Inclusions of costs which require prior approval under the cost principles,
. e. g., equipment. The EPA1 Award Official may waive this requirement.
CHANGES WHICH REQUIRE ONLY PO APPROVAL
Universities of Higher Education and other Non-Profits
G Rebudgeting funds for indirect costs to absorb increases in direct costs.
G Key personnel •
G Moving training funds to other categories.
G Subaward, transfer, or contracting out of any work under the award, unless
approved in the award. Does not apply to the purchase of supplies,
material, equipment, or general support services.
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EXCEPTIONS FOR KKSF.AKt'H AWARDS
For awards supporting research the prior approvals are automatically waived unless;
G EPA regulations provided otherwise;
G The assistance agreement provides otherwise;
G Additional Federal funds are required; or
G The change involves a change in the approved
objectives or scope of the project.
CHANGES NOT REQUIRING PRIOR EPA
APPROVAL OR FORMAL AMENDMENT
\
Recipients may need to change their projects to respond to changed conditions. Neither a
formal amendment nor prior written approval is necessary for minor changes that are
consistent with the project objective and within the scope of the agreement. However, the
recipient should discuss these changes with the PO because EPA is not obligated to pay
for any changes that result in cost overruns. For example, recipients may, without prior
written approval:
G Make minor changes to the methodology, approach, or other aspects of the
project to meet objectives or to expedite completion.
G Adjust their project budgets (except for adjustments requiring formal
amendments) provided they use the funds in accordance with the approved
workplan/narrative, EPA regulations, and applicable cost principles.
G Changes in the staff (other than key personnel), provided they will not
affect the objectives of the project.
Recipients may also:
Extend the award one-time for up to 12 months as allowed by 40 CFR 30.25, unless the:
Terms and Conditions of the award prohibit the extension. For these extensions, the
recipient must notify the Award Official in writing with supporting reasons and revised
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expiration date at least 10 days before the expiration date specified m the award
Also, the recipient cannot extend the award to merely use up unobligated balances.
Extensions requiring additional Federal funds; or extensions involving any change in the
approved objectives or scope of the project must have prior approval from the Project
Officer.
Changes requiring prior EPA approval or a formal amendment.
Universities/Non-profits
Type of Change
Requested
Change in $
Change in Scope
Approvals Required by
Cost Principles
Extend Award
Key Personnel
Transfer of Costs to
Different Activities
Some 3rd Party Services
Indirect to Direct
EPA
Approval
X
X
Varies
Varies
X <
X
X
X
Formal
Amendment
X
X
Varies
Varies
Varies
Varies
Varies
Varies
Requests for modifications to the initial assistance agreement should include at a
minimum the following:
G Assistance agreement number;
G Description of the modification;
Q Justification for the modification, if time extension, required new ending
date;
Q Appropriate internal approvals.
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Transferring an Award
Recipients may request that EPA transfer a project to another organization for a number
of reasons, e. g., transfer of the Project Manager to another organization, reorganization,
changes in the recipient organization's name.
Recipients should submit in writing to their EPA Grants Specialist their request for the
transfer of an award. This request should be signed by the authorized representative for
the organization.
Deviations
Recipients are required to comply with all EPA requirements. In some cases, however, it
may be necessary to deviate from (waive) a regulatory provision. EPA does not have the
authority to deviate from statutory or Executive Order requirements.
The Director, Grants Administration Division is the person delegated by the
Administrator to approve or disapprove deviations from regulatory provisions not
required by statute or Executive Order.
For deviations for Headquarters awards, the recipient sends the request directly to PO
who forwards the request with a recommendation to the GMO. The GMO processes and
submits the request to the Director, GAD for signature. Deviation requests should be
submitted as soon as the need for the deviation is known, NOT AFTER THE FACT.
Each request for a deviation must include the following information from the recipient:
Q The name of the applicant or recipient, the assistance identification number
of the application (if available) or award, the date of the award, and the
dollar value of the application or award and the amount in question.
G The section(s) of the regulation from which a deviation is requested.
Q A complete description of the circumstances, a careful analysis of the
situation, justification for the deviation, an explanation of what the
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deviation will do, and any pertinent background information, including a
copy of the applicant's or recipient's request.
A statement as to whether the same or a similar deviation has been
previously requested for the same project, and if so, an explanation as to
why the previous request was made and the outcome.
The applicant may request a deviation before the agreement is awarded. If a
deviation is approved before award, the approval will be contingent upon
the approval of the application and award of the assistance agreement.
The Award Official must incorporate the provisions of any approved
pre-award deviation in the agreement.
X*.
The Director, Grants Administration Division may reconsider the decision
if that decision was based on incomplete information.
AUDITS
The Inspector General Act authorizes the Inspector General (IG) to have access to all
records, reports, audits, reviews, documents, papers, recommendations, or other material
available to the Agency. To meet its responsibilities, the IG must have the cooperation
of Agency personnel and the recipient of Federal funds.
Title 18, United States Code, Section 1516 states that whoever, with intent to deceive or
defraud the United States, endeavors to influence, obstruct, or impede a Federal auditor
shall be fined or imprisoned. Therefore, it is imperative that all recipients of Federal
funds recognize their obligation to make full disclosure of information pertaining to the
use and management of Federal funds.
•
TYPES OF AUDITS
Internal Audits are performance audits that examine the programs or operations of
Federal agencies. (However, as part of an internal audit, State agencies or assistance
recipients may be evaluated to provide further information about the performance
of a Federal agency.) Internal audits are used to test the adequacy of an organization's
regulatory compliance and financial reporting. Additionally, they are used to test the
effectiveness of its resource management, operating procedures, program results, and
financial operations. Internal audits may evaluate the entire organization or only one or
two of an organization's programs or operations. Internal audits of EPA are conducted by
the U. S. General Accounting Office (GAO) or EPA's Office of the Inspector General
(EPA OIG).
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External! Audits are audits that examine a Federal agency's assistance recipients. These
audits are conducted by the EPA OIG, or its contractor, or, in the case of Single Audits,
by the recipient. They may be performed before, during, or after the completion of a
project. Examples of external audits include single audits, pre- award audits, interim
and final cost audits, and indirect cost audits.
Single audits are financial and compliance audits of State and local governments or
universities and nonprofits that are performed in accordance with OMB Circular A-133.
The cost of a Single Audit is an allowable cost. Applicants should either include audit
costs in their indirect cost rate or, if the cost is not included in the indirect cost rate, as a
direct cost to the grant.
Pre-award Audits are reviews conducted to evaluate prospective cost or pricing data.
Interim and Final Cost Audits are reviews conducted to assess the allowability of costs
claimed under the assistance agreement or contract and to ensure compliance with the
applicable requirements and award conditions. Indirect Cost Audits are reviews
conducted to determine whether the prospective indirect cost rate properly allocates
allowable costs.
Audits of recipients may be requested by the program office, GMO, or Award Official
when considered necessary. 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.
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THE AUDIT AND ON-SITL REVIEW PROCESS
Scheduling: Your organization will be contacted to schedule the review or audit.
Scheduling will be negotiated as it is important to have all the key players available.
Entrance Conference: At the entrance conference, the auditors and/or reviewers will
explain the purpose and scope of the audit/review and receive comments from the
organization being audited/reviewed regarding potential audit/review areas. Logistical
issues are addressed, such as access to records, working space requirements, and who will
be interviewed. All personnel with extensive knowledge of the area being
audited/reviewed should be at the entrance conference.
Advisement of findings: During the audit/review, the auditors/reviewers should provide
the organization with feedback about preliminary findings and developing issues. If any
of these findings are inaccurate, based on factual information, you should immediately
discuss your concerns with the lead auditor/reviewer and explain your interpretation of
the situation. Conversely, if any of the preliminary findings are accurate, you should
immediately begin to take corrective action. Further, significant or sensitive findings
should be brought to the attention of the organization's senior management immediately.
Exit Conference: At the exit conference, the auditors/reviewers will discuss the
audit/review findings with the organization to clarify any questions they may have about
the audit/review. If possible, auditors/reviewers and management should try to reach
agreement on the audit/review results. A
Draft Report: A draft report is usually issued shortly after the audit/review is completed.
The report contains the auditor's/reviewers findings and documentation to support these
findings. Management is expected to provide a written response to the audit/review
findings contained in the draft report within 30 days, either concurring with the findings
or providing explanations for any disagreements with the findings. Any planned or
implemented corrective actions should be documented in the response. You should not
concentrate solely on writing a response to the report. As soon as a problem is identified,
it is important to start corrective actions. By starting corrective actions immediately, you
may be able to resolve the audit/review finding(s) before the audit/review report is issued
and avoid having to respond to the finding(s) in your response.
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Final Report: The final report contains the auditor's/reviewers findings and agreed to as
well as disputed recommendations. It should reflect the pertinent information obtained
from the audit/review and from the discussions with Agency management throughout the
audit/review process.
A-133 Audit Resolution: Audit resolution occurs when a "final determination" is
issued. If the questioned costs are $100,000 or more, the EPA Action Official must obtain
the concurrence of the EPA OIG on proposed corrective action. If the questioned costs
are less than $100,000, management does not have to get OIG concurrence before issuing
the decision. Under the Inspector General Act Amendments, EPA management must
track audit follow-up actions until all corrective actions are complete. Further, EPA
management must report to Congress semi-annually on the status of audit resolution and
follow-up activities, as well as provide an explanation for audits not resolved within 180
days and final actions that have remained.
N
To help make the audit/review process proceed as smoothly as possible, recipients
should keep the following in mind:
Documentation:
i
Q The recipient should document in the official Project File all decisions,
communications, memos, etc. from the beginning of the agreement. The
auditors/reviewers will assume that the EPA has not approved all actions taken by
the you the recipient unless there is some documentation in the file to show
otherwise.
Q Be responsive to requests for information. Make all documents available to the
auditors.
G The following list of documents maybe helpful to identify the assistance agreement
records needed by the auditors/reviewers:
- Applications, agreements, amendments, contracts and subcontracts;
- Accounting records, including disbursements of funds, travel, records of in-
kind contributions, etc.
- Copies of performance reports and any other reports or products developed
under the agreement.
- Copies of Financial Status Reports or any requests for reimbursements.
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The following are some guidelines to follow when interacting with the auditors:
Preparation: Determine what auditors/reviewers will look for. Cooperate and
demonstrate steps already taken to resolve issues or agree to take corrective actions.
Demonstrate knowledge of program. Ask other recipients who have been through an
audit/review what to expect during an audit/review.
Communication: Answer all of the auditors/reviewers questions. Tell the
auditors/reviewers what action(s) you have taken to improve problem areas. Be truthful.
Discuss all problems and issues; and give the auditors/reviewers all of the data they
request.
The Single Audit Act and Office of Management and Budget (OMB) Circular
A-133, "Audits of States, Local Governments, and Non-Profit Organizations"
Federal awarding agencies are required to provide the recipient of Federal funds
specific information regarding the award and its Federal requirements, recipients are
required to maintain effective internal control and comply with all applicable laws and
regulations. As of January 1,2004 any recipient which expends $500,000 or more in
Federal awards in its fiscal year is required to have a single audit. If an recipient
expends funds under only one program (excluding Audit research and development) that
meets the expenditure level and a financial statement audit is not required, the recipient
may arrange for a program-specific audit in place of a single audit. An recipient that
expends less man the $500,000 expenditure level is not required by the Circular to have a
single audit. However, upon request, it is required to make its records available for
"review or audit" by appropriate officials.
Recipients subject to audit (auditees) must: (1) arrange for a timely audit; (2) prepare
appropriate financial statements and a schedule of expenditures of Federal awards; (3)
ensure the audit is properly completed; (4) submit the single audit report when due; and
(5) take corrective action on audit findings. The fair share of the cost of the single audit is
an allowable cost to Federal awards provided that the audit was conducted in
accordance with the requirements of the Circular and the cost is not otherwise prohibited
by law or regulation.
The audit must be conducted in accordance with the Government Auditing Standards. The
auditor must: (1) audit and provide opinions on the fair presentation of the financial
statements and the schedule of expenditures of Federal awards; (2) gain an understanding
of internal control over Federal programs and test internal control over major programs;
and (3) audit and provide an opinion on compliance with requirements for major
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programs. The single audit report includes: • the financial statements (auditee's
responsibility to provide); • a schedule of expenditures of Federal awards (auditee's
responsibility to provide); • auditor's opinions on the fair presentation of me financial
statements and schedule of expenditures of Federal awards; • auditor's report on internal
control and compliance pertaining to financial reporting; • auditor's report on internal
control and opinion on compliance pertaining to major programs; • auditor's schedule of
findings and questioned costs; • auditee's corrective action plans; and • a summary
schedule of prior audit findings which includes planned and completed corrective actions
(auditee's responsibility to provide).
The auditec is responsible for submitting a report that meets the Single Audit Report
requirements of the Circular. If the auditee is a subrecipient, it must also forward a copy
of a report containing audit findings to affected principal recipients. If the report contains
no findings, the subrecipient is only required to provide the affected principal recipients
with a notification that the audit was completed. Most audit reports are a matter of public
record.
The SF-SAC Form provides information on the results of the audit which is entered into a
database maintained by the Federal Audit Clearinghouse (FAC). While both the auditee
and the auditor complete parts of the SFSAC Form; the-auditee is responsible for the
overall accuracy of the information on the form. The auditee forwards the SF-SAC Form
and the appropriate number of reports to the FAC. The auditee is responsible for
preparing a corrective action plan, Plan taking corrective actions on audit findings, and
reporting the status of corrective actions in subsequent reports. An audit finding may
include questioned program costs. If any of the questioned costs are disallowed by the
management decision, the auditee may have to refund the disallowed amount. Within 6
months of its receipt of the report, the Federal awarding Decision agency is required to
issue a management decision on each audit finding. The management decision, which
may be called various names, is a written evaluation of the audit.
Cognizant Agency Recipients which annually expend awards in excess of an for Audit
amount specified by the Circular (currently $25 million) have a Federal cognizant agency
for audit. The cognizant agency for audit provides technical audit advice; considers
requests for extensions to the submission due date for the audit report; coordinates the
management decision for audit findings that affect more than one Federal agency;
coordinates quality control reviews; and conducts other activities required by the Circular.
A recipient's cognizant agency for audit for the 5-year period FY 2001 through FY 2005
is the Federal awarding agency which provided the most direct funding for FY 2000. The
cognizant agency for audit will be redetermined for the 5-year period starting with FY
2006. The cognizant agency for audit may be different than the cognizant agency for
indirect cost.
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An recipient which does not have at cognizant agency has a Federal oversight agency.
The oversight agency is the Federal awarding agency that provides the most direct
funding or, if no direct funding, the most indirect funding. The oversight agency
provides technical audit advice and may assume the duties of a cognizant agency.
Disputes
Whenever possible, disputes between EPA and recipients should be resolved at the lowest
level possible. Each Award Official (Regional and Headquarters) may designate one or
more Disputes Decision Officials (DDO). The Disputes Decision Official is responsible
for deciding disagreements between EPA and recipients (they may also decide disputes
with applicants). The most frequent formal disputes are a result of recipient
disagreements with audit findings.
The following EPA actions cannot be disputed: Denials of deviation requests (40 CFR
Parts 30 and 31 ); protest decisions (40 CFR Parts 31 and 30); National Environmental
Policy Act decision (40 CFR Part 6); Audit Resolution Board decisions (EPA Order
2750); and Debarments/suspensions\40 CFR Part 32).
For Headquarter awards, the disputee may request that the appropriate Assistant
Administrator review the Dispute Decision Official's decision and render the Agency's
final decision. These requests must be sent directly to the Assistant Administrator.
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Closeout
The closeout process is a systematic method of ensuring that all technical work (e.g.,
product development, construction) and administrative requirements (e.g., review of
FSRs) have been finalized.
Closeout is initiated when a project ends due to completion or termination. A project may
be terminated because of insufficient funds, non-funding of a renewal, or decision by the
recipient or EPA not to continue the project/program. Closeout ensures a final accounting
of expenditures by the recipient and an assessment by the PO that all technical work has
been completed and is satisfactory.
All assistance agreements are subject to audit. However, an assistance agreement maybe
closed out before an audit takes place. It is important for the you the recipient to
understand that:
- The award may be audited at a later date, and
- The recipient is responsible for maintaining the records
for the length of the record retention period for that
particular program. *•
Formal closeout can occur only when all parties are satisfied with the final product, all
eligible costs have been accepted, all repayments have been received, all terms and
conditions or Special Conditions have been met. If an audit is underway prior to closeout,
all issues must be resolved prior to closeout.
The timing of closeout depends primarily on the type of agreement. Closeout of most
grants begins when the project period has expired. Ninety days prior to the project
expiration date, the GMOs will send a "Reminder Letter" to remind the recipient and
Project Officer of the closeout requirements.
Lobbying and Litigation Certificate (EPA Form 5700-53) is required from recipients
at closeout of the assistance agreement. The purpose of the lobbying and litigation
certificate is to ensure that no Federal dollars were spent for lobbying or litigation
activities.
Final Performance Reports: The final performance reports are due 90 calendar days
after the expiration or termination of the award.
Invention: If the project resulted in any inventions being produced, the recipient must
report them to the Award Official.
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Federally-owned Property: If the recipient used any Federally-owned property, the
recipient must ensure the proper disposal of this property before closeout can be
completed. The recipient must send a list of Federally-owned property to their grants
specialist. Once the EPA receives the recipient's list of Federally-owned property, it must
notify the recipient of property disposition requirements.
If a recipient owes EPA funds, the recipient has 30 days to pay this debt. The LVFMC
will establish an accounts receivable. The assistance agreement cannot be closed out until
the debt is paid.
After receiving confirmation from the Project Officer that all deliverables were received
and acceptable, and confirmation from the LVFMC that all of the financial requirements
have been submitted and accepted the Grants Specialist will prepare a closeout letter and
send it to the authorized representative of an organization.
DISPOSITION OF EQUIPMENT
University and non- profit recipients must assess the value of property to be disposed and
reimburse EPA as follows:
Q Equipment: When the original or replacement equipment acquired under an
assistance agreement is no longer needed for the original project or
program or for other activities currently or previously supported by a
Federal agency, disposition will be as follows:
G Equipment with a fair market value of less than $5,000 may be retained,
sold, or disposed of with no further obligation to EPA.
G Equipment with a current per unit fair market value of $5,000 or more may
be retained or sold and EPA reimbursed for its share of the fair market
value based on the cost share ratio in the agreement.
Q
Research Entities: The Award Official may transfer title to property obtained by non-
profit institutions of higher education or non-profit organizations whose primary purpose
is to conduct research without further obligation to the Federal Government. Tangible
personal property where the Federal Agency has statutory authority to vest the title to the
recipient without further obligation to the Federal Government is called "exempt
property." An example is given hi the Federal Grant and Cooperative Agreement Act for
property acquired under an assistance agreement to conduct basic or applied research by a
non-profit If the Award Official transfers title without further obligation, the recipient
may keep the property and does not have to reimburse EPA.
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DISPOSITION OF REAL PROPERTY
When real property is no longer needed for the originally authorized
purpose, the recipient must request disposition instructions from EPA.
Real property must be disposed of using one of the following options:
Q Retain title and compensate EPA;
Q Sell the property and compensate EPA; or
G Transfer title to EPA or a third party designated/approved by EPA.
The amount paid to EPA (or to the recipient, if transferred) is computed by applying
EPA's (or the recipient's) percentage participation in the cost of the original purchase to
the proceeds of the sale after deducting any actual and reasonable selling and fix-up
expenses. Sales procedures must provide for competition to the extent practicable and
result in the highest possible return.
DISPOSITION OF INTANGIBLE PROPERTY
The same disposition rules apply to all recipients. Unless waived by EPA, the Federal
Government retains a royalty free, nonexclusive, and irrevocable license to:
Q Obtain, reproduce, publish, or otherwise use the data
first produced under an assistance agreement.
Q Authorize others to receive, reproduce, publish, or
otherwise use such data for Federal purposes.
Research findings produced under an award that were used by the Federal Government in
developing an agency action, has the force and effect of law, the Federal awarding agency
shall request, and the recipient shall provide, the research data so that it can be made
available to the public through the procedures established under FOIA (see OMB Circular
Al 10, revised 9/30/99).
Record Retention
*
Record retention requirements apply to all supporting documentation, including
documentation of significant actions and decisions, cost records, scopes of work,
correspondence, applications, pre-award reviews, and funding decisions.
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For most programs, the recipients record retention requirements begin with the date the
recipient submits the final expenditure report SF- 269, Financial Status Report." For
reimbursement programs, the recipients record retention requirements start with the final
payment request either the SF 270, "Request for Advance or Reimbursement," or the SF
271, "outlay Report and Request for Reimbursement for Construction Programs."
Additionally, if a litigation, claim, negotiation, audit, or other action involving the records
was started before the end of the retention period, the recipient must keep records until
either the completion of the action and resolution of all issues which arise from it, or until
the end of the established retention period, whichever is later.
Record Retention Period
The length of time records must be kept differs for recipients and for EPA, and is
different for some grant programs. For all Programs Except Superfund, the Wastewater
Treatment Construction Grants Program, and the State Revolving Fund Program
recipients must keep records for three (3) years after the date they submitted the
final SF 269, "Financial Status Report (FSR)."
EPA, the Inspector General, Comptroller General-of the United States, or any of their
duly authorized representatives, have the right of timely and unrestricted access to any
books, documents, papers, or other records of recipients that are pertinent to the awards,
in order to make audits, examinations, excerpts, transcripts and copies of such documents.
This right also includes timely and reasonable access to a recipient's personnel for the
purpose of interview and discussion related to such documents. The rights of access in
this paragraph are not limited to the required retention period, but shall last as long as
records are retained.
RECIPIENT ROLES AND RESPONSIBILITIES
The recipient is responsible for:
G Expending and accounting for funds in accordance with the agreement, program
regulations, and statutes.
G Accounting for total project costs and segregating allowable and unallowable
costs.
G Conducting procurement in accordance with the appropriate procurement rules,
including ensuring that debarred or suspended bidders are not awarded a contract
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using Federal funds.
G Complying with the appropriate Disadvantaged Business Utilization requirements
and ensuring that their contractors comply with the requirements.
G Recording the receipt and expenditure of program income as a project transaction.
G Complying with the appropriate property purchase, management, and disposition
requirements.
G Complying with EPA requirements and the Uniform Relocation Acquisition
Assistance and Real Property Acquisition Act, if real property is purchased under
the agreement.
G Requesting the Award Official's required approval for a formal assistance
amendment.
G Requesting the PO's approval for an informal amendment. Complying with all
applicable reporting requirements, including submitting progress reports, Financial
Status Reports, MBE/WBE reports. "' '
G Responding to any inquiries from the PO and GMO.
G Submitting technical, financial, and administrative reports as required.
G If an audit is conducted, providing the auditors with all necessary information,
documentation, etc. related to the agreement.
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Supplemental Information Available on the Internet as of 8/14/03
http://'cfoc.uo\ The web site maintained by the Chief Financial Officers Council contains
important public financial management and accounting information.
www.gao.aov The United States General Accounting Office • Government Auditing
Standards • Standards For Internal Control in the Federal Government
www.omb.gov The Office of Management and Budget • Circular A-l33, Federal Cost
Principles and Administrative Requirements Circulars
www.cfda.gov Catalog of Federal Domestic Assistance • Searchable Database of
Federal Award Programs
http://harvcstcr.ccnsus.tiov/sac Federal Audit Clearinghouse • Searchable Database of
Single Audit SF-SAC Data
www.auditforum.org Mid-America Jntergovernmental Audit Forum • Guide On
Selecting An External Auditor
www.epa.gov The official web site of the Environmental Protection Agency
www.fedgrants.gov EPA grant solicitation notifications are posted at this site
94
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Fora Approved OMB NO 203IMXI20 Appnml Expires 12/3IXR
LOBBYING AND LITIGATION CERTIFICATION FOR GRANTS AND
COOPERATIVE AGREEMENTS*
INSTRUCTIONS:
* At project completion, complete this form pursuant to the 2001 Department of Veterans Affairs
and Housing and Urban Development, and Independent Appropriations Act, Public Law 106-
377, Section 424 and 2000 Department of Veterans Affairs and Housing and Urban
Development, and Independent Appropriations Act, Public Law 106-74, Section 426 and any
other subsequent Appropriation Act requirements.
Please mail this form to your EPA Grant Specialist within 90 days of project completion DO
NOT send this information to the Office of Management & Budget.
Assistance Agreement Number(s):
i^
I hereby certify that none of these funds have been used to engage in the lobbying of the
Federal Government or in litigation against the United States unless authorized under '
PYictinrr lau;
existing law.
Signature of the Chief Executive Officer Date
Print Name
EPA Form 5700-53 (Rev 7-02)
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Allowability of Selected Items of Cost Under the Cost
Principles for Non-profits (A-122) and Universities (A-21)
The Cost of
advertising and
public relations
alcoholic beverages
bad debts
bonding
civil defense
communications
compensation for
personnel services
contingencies
contributions (to
other entities)
defense &
prosecution of
claims & civil &
criminal
proceedings
depreciation & use
allowance
Is Generally
Allowable Under
A-122,
A-122, A-2f
Is Conditionally
Allowable Under
A-122, A-21
A-21
A- 122, A-21
A-21
A- 122, A-21
Is Generally
Unallowable
Under
A-122, A-21
A-122, A-21
A-122, A-21
A- 122, A-21
A-122
95
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The Cost of
donated property
donated services
employee moral,
health & welfare
entertainment
equipment & other
capital expenditures
fines & penalties
fund raising &
investment
management
gains & losses on
disposition of
depreciable
property & other
capital assets
idle facilities and
idle capacity
insurance &
indemnification
interest
labor relations
lobbying
maintenance,
operations &
repairs
Is Generally
Allowable Under
A-122, A-21
A- 122, A-21
Is Conditionally
Allowable Under
A-21
A-122, A-21
A-122, A-21
A-122
A- 122, A-21
A-122, A-21
A-122, A-21
Is Generally
Unallowable
Under
A-122
A-122, A-21
A-122, A-21
A-122, A-21
A-122, A-21
A-122, A-21
96
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The Cost of
donated property
donated services
employee moral,
health & welfare
entertainment
equipment & other
capital expenditures
fines & penalties
fund raising &
investment
management
gains & losses on
disposition of
depreciable
property & other
capital assets
idle facilities and
idle capacity
insurance &
indemnification
interest
labor relations
lobbying
maintenance,
operations &
repairs
materials &
supplies
Is Generally
Allowable Under
A-122.A-21
i
A-122.A-21
A- 122, A-21
Is Conditionally
Allowable Under
A-21
A-122.A-21
A-122.A-21
A- 122
A-122.A-21
A- 122, A-21
A-122.A-21
Is Generally
Unallowable
Under
A- 122
A- 122, A-21
A-122,A-21
A-122,A-21
A-122.A-21
i
A-122.A-21
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The Cost of
memberships,
subscriptions, &
professional
activities
organization
patents
plant security
preaward
professional
services
proposals
publication &
printing
rearrangement &
alterations
reconversion
recruiting
relocation
rental
royalties & other
costs for patent &
copyright use
selling & marketing
Is Generally
Allowable Under
A-122
A-122,A-21
',
A-122, A-21
Is Conditionally
Allowable Under
A-21
A-122, A-21
A- 122, A-21
A- 122, A-21
A-21
A- 122, A-21
A- 122, A-21
A- 122, A-21
A-122, A-21
A-122, A-21
A-122, A-21
A-122
Is Generally
Unallowable
Under
A-122
i
A-21
98
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The Cost of
severance
specialized service
facilities
taxes
termination
training &
education
transportation
travel
under recovery of
costs under Federal
agreements
Is Generally
Allowable Under
A-122, A-21
i.
Is Conditionally
Allowable Under
A-122, A-21
A-122,A-21
A- 122, A-21
A- 122, A-21
A-122
A-87, A-122, A-21
Is Generally
Unallowable
Under
"i
A-122, A-21
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BEST PRACTICES GUIDE FOR CONFERENCES
Conferences may be funded with an assistance agreement if the principal
purpose is not for the direct benefit of the Government The "Best Practices Guide
for Conferences" attached here, will help Agency and recipient personnel make
correct planning and funding decisions. The guide is structured to help users first identify the
purpose of the conference and whose conference it is. A discussion on supporting conferences
under assistance agreements is in chapters three and four of the guidance document.
The guide also provides answers to frequently asked questions concerning conference activities
and allowability of expenditures. For example, whether it is appropriate to use EPA's logo is a
frequently asked question from assistance agreement recipients. Chapter three, page 3-4 D of the
conference guidance states "Use of the Agency's logo in connection with promotion or sale of
non-government produced goods or services is forbidden. Promotional material for conferences
conducted under grants and cooperative agreements may acknowledge that the conference
receives financial support from the Agency under an assistance agreement, but cannot use the
logo on a conference brochure in a manner that implies that the conference is being conducted by
EPA. These conferences should be described as the recipient's event, not EPA's."
The use of EPA's logo on websites developed under assistance agreements is also unallowable.
\ '
Caution: EPA Order 1015.2A explains when and how the EPA logo can be used. Recipients
should consult with their Project Officer or Grant specialist, if needed.
As a general rule, an assistance agreement may not be used to support a conference or other
services if the principal purpose is to provide advice, recommendations, or other information for
EPA's direct use in developing or changing guidance or regulations. For example, an office or
laboratory cannot award an assistance agreement to a trade association or consulting firm to
arrange and conduct a conference of EPA officials and members of the regulated community if
the principal purpose is to enable EPA to obtain the views of the regulated
community on a proposed new policy or changes in an existing one. If the office or laboratory
needs help in putting on such a conference, it should use a contract to acquire the services.
An exception to this general rule is assistance to associations of State officials who implement
EPA programs. An assistance agreement may be used to provide funding to an association of
State officials or agencies to hold a conference among its members and EPA officials to discuss
issues in the implementation of a Federal effort that the States implement on a day- to- day basis
under a formal delegation or as partners with EPA in a coordinated, national effort. Although
EPA benefits from such a conference and may subsequently decide to adopt recommendations or
use information provided by the State officials at the conference, the principal purpose is to
support the association in helping its State members participate in developing the policies that
they will carry out.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
MOY 20 15
MEMORANDUM
,
SUBJECT: Best Practices Guide for Conferences , n«V/ /
"
FROM-
TO'
Elizabeth Craig, Director {/
Office of "Grants and
Office of Acquisition Management
Senior Resource Officials
OFFICE or
ADMINISTRATION
AND RESOURCES
MANAGEMENT
GPI-90-11
Attached is a copy of the final "Best Practices Guide for Conferences" dated November
12, 1998 In June 1996, the Grants Customer Relations Council established an intra-agency
workgroup to develop a guidance document for Agency personnel to use in planning, and
assisting others, with conferences The attached is a result of the workgroup's hard work
The workgroup's final product takes into consideration all of the comments received
across the Agency Every office's participation in reviewing and providing recommendations on
the guidance added to its success and is very much appreciated
Conferences play an important role in fulfilling EPA's mission This guide will help
Agency staff make correct planning and funding decisions. The guide also provides a listing of
reference materials for the user to consult for additional guidance. The guidance will be posted
on the Agency's Intranet Grants Homepage and Lotus Notes Database in the near future and will
be shared and discussed in future Project Officers training sessions
The workgroup's hard work and dedication to completing this difficult task is very much
appreciated They provided a valuable tool for Agency staff to use in addressing conference .
concerns. We would like to extend our personal congratulations and thank all of them.
We hope that you will help us in disseminating this information to your organization
Atiacliments
cc
Best Practices Guide for Conferences Workgroup
Steve Wilson, OCIR
Jeff Schwartz, Budget
Margherita Pryor, ORD
Jim Drummond. OGC
Judy Vandcrhoef, OIG
Ann Carey, OSWER Juaruta Smith, OW
Bill Thomson, OPPTS Shirley Leonard, OAR
John Cline, ORD Esther Jones, OR.D
Sylvia Horwitz, OGC Elissa Karpf, OIG
Giorida Car, Gulf of Mexico Program
Iniomol Address (URL) • http //<«/ww on-i ••' (Miniumr-
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BEST PRACTICES GUIDE FOR CONFERENCES
November 12,1998
Prepared by Conference Guidance Workgroup:
Steve Wilson, OCIR, Co-Chair
Ann Carey, OSWER, Co-Chair
Juanita Smith, OW, Co-Chair
Jeff Schwartz, Budget
Bill Thomson, OPPTS
Shirley Leonard, OAR
Margherita Pryor, ORD
John Cline, ORD
Esther Jones, ORD
Jim Drummond, OGC
Sylvia Horwitz, OGC
Elissa Karpf, OIG
Judy Vanderhoef, OIG
Gloria Car, Gulf of Mexico Program
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HOW TO USE THIS GUIDE
This guide is structured to help you first identify the purpose of your conference and whose
conference it is, since this should drive your choice of funding instruments and many of your
subsequent conference decisions. You should use the indicators in Chapter 1 as a starting point
to determine whose conference it is. Once you have decided whose conference it is, you will be
guided to Chapters 2, 3, or A, which will describe the appropriate funding instruments for the
conference and the conference-related funding issues you should consider. Chapter 5 addresses
proper documentation of conferences. Lastly, a list of references by subject matter is attached to
assist you if you need to consult additional references.
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TABLE OF CONTENTS
INTRODUCTION ;,
CHAPTER 1: Whose Co ifcrcncc Is It? 1_1
CHAPTER 2: Our Conference 2-1
A. EPA Conference — Overview 2-1
B. Funding Instruments 2-1
1. Contracts 2-1
2. Interagency Agreements (lAGs) 2-2
3. Supporting Conferences with In-Kouse Resources 2-3
C. Allowabiliry of Costs - Overview 2-3
1. Meals, Snacks and Refreshments 2-3
2. Honoraria 2-4
3. Procurement of Items for Distribution at EPA-Sponsored Conferences 2-4
4. Registration Fees for EPA-Sponsorcd Conferences 2-4
5. Travel 2-4
6. Printing of Conference Material 2-6
D. Location 2-6
CHAPTERS: Their Conference 3_!
A. Supporting a Conference 3_j
Sponsored by a Nonfedcral Entity — Overview
B. Funding and Other Support Instruments 3_I
1. Assistance Agreements ^.j
2. Cooperation Authority lAGs Authorized by EPA Program Statute 3-1
3. In-Kind Assistance 3_2
C. Allowability of Costs — Overview 3.2
I. Entertainment vs. Education 3_2
2. Meals and Refreshments 3.3
3. Travel 3.3
4. Registration Fees 3.4
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D. Use of EPA Logo 3-4
E. Lobbying 3-4
F. Printing of Conference Material 3-4
G. EPA's Use of Assistance Recipients' Conference 3-4
Proceedings and Reports
H. Free Attendance by EPA Employees 3-4
I. Location 3-4
CHAPTER 4: Jointly Sponsored Conferences 4-1
A. Supporting a Jointly Sponsored Conference — Overview 4-1
B. Areas of Concern 4-1
1. Appearance 4-1
2. Augmentation of Appropriated Funds 4-1
3. Lobbying 4-2
C. Instruments — Overview 4-2
1. Acquisition 4-2
2. Assistance Agreements 4-2
D. Funding Instruments: Example of Jointly Sponsored Conference 4-3
Using Multiple Instruments
E. Alienability of Costs — Overview 4-4
F. Issues Relating to Jointly Sponsored Conferences 4-4
1. Free Attendance for EPA Employees 4-4
2. EPA Property and Services 4-5
3. Social Events • 4-5
4. Co-sponsors1 Independent Events 4-5
5. Fund raising 4-5
6. Food and Refreshments for EPA Employees 4-5
7. Food and Refreshments for Nonfcdcral Attendees 4-6
8. Use of EPA Logo 4-6
9. Printing of Conference Material 4-6
10. Location 4-6
u
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CHAPTERS: Maintaining Proper Documentation 5-1
REFERENCE LIST R-I
A. Introduction R-I
B. General Acquisition and Assistance Requirements R-l
C. Conference Planning and Site Selection R-2
D. Travel R-2
E. Food R-3
F. Federal Advisory Committee Act Meetings (FACA) R-3
C. Lobbying R-4
in
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INTRODUCTION
Conferences, large and small, play an important role in fulfilling EPA's mission. They can
be an effective way to bring together various groups of people to share information, educate the
public, work with state and local government partners, train employees, and leam from
non-governmental stakeholders. Conferences arc also a useful way for nonfederaJ entities such
as universities, state and local governmental environmental agencies, and intergovernmental
groups to cany out environmentally related work for which they receive funding from the
Agency. For purposes of this guide, the term "conference" encompasses workshops, seminars,
symposia, conventions, or similar designations for business related gatherings that involve topics
related to EPA's mission of environmental protection.
The range of stakeholders playing integral roles in agency-related activity has grown, as has
the use of conferences to convene various groups for a variety of purposes. As the Agency and
others have expanded the use of conferences, issues have arisen in connection with conference
planning, particularly with funding. The Office of Inspector General (OIG) audited several
conferences and identified a number of recurring problems. As a result, an intra-Agency
workgroup was established to develop a guide for Agency personnel to use in funding, and
assisting others with: conferences of all kinds. The Best Practices Guide for Conferences is the
result of the workgroup's efforts.
The guide begins by asking "Whose conference is i(?" By defining the purpose of the
conference, the planner can determine whether it is: (1) "ours," an EPA conference or one thai
EPA sponsors with other federal agencies, or (2) "theirs," one held by a nonfederal sponsor that
EPA supports with financial assistance, or (3) a "jointly sponsored" conference, benefiting both
the Agency and a nonfederal entity. Sometimes, the answer to this question will be obvious and
sometimes you will have choices as to how to answer the question, depending on the topics for
the conference and EPA's role in the conference.
Once the question "Whose conference is it?" has been answered, the guide describes
appropriate acquisition and assistance funding mechanisms available for various types of
conferences. The guide also outlines major funding issues associated with conference support,
such as invitational travel, non-invitational participant travel, meals, conference materials, and
other expenses It also includes information on when and how registration fees can be collected,
honoraria, and ethical considerations
The guide is not the last word on conferences. It is not meant to be used as a "how to" guide
for planning conferences. The emphasis of the guide is addressing funding concerns. For most
areas that are addressed, it is just the starting point. There arc references to statutes, regulations,
other agency guidance documents, and EPA Ethics Advisories that should be consulted. Agency
personnel in the Office of Acquisition Management (OAM), the Grants Administration Division
(GAD;, the Office of the Chief Financial Officer, and the Office of General Counsel's (OGC)
Finance and Operations Law Office or Regional Counsel should also be consulted as needed.
IV
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CHAPTER 1: WHOSE CONFERENCE IS IT?
Any conference that EPA supports'or holds must be related to its environmental mission.
Before you begin the planning process, you should be able to justify the need and identify the
statutory authority for the conference, and confirm that funds and, if appropriate, EPA staff
resources are available. The planning process begins with determining the answer to the
question, "Whose conference is it?" A conference that is intended primarily to help the Agency
carry out its governmental functions is "ours*1 and is discussed in Chapter 2. A conference
intended primarily for the benefit of a nonfederal entity is "theirs" and is discussed in Chapter 3.
Finally, when the Agency and a nonfederal entity share control of the conference, it is "jointly
sponsored" and is discussed in Chapter 4. The two key issues to consider are: (1) purpose of
the conference, and (2) control of the planning and the agenda.
(1) Purpose of the Conference. The purpose of a conference is a decisive factor. The more the
conference is needed by EPA, the more likely it is ours. For example, if the principal purpose of
the conference is to provide EPA with a report, data, recommendations, or other information that
we will use to develop or directly incorporate into EPA regulations or guidance documents, it is
ours. Meetings and conferences conducted under the Federal Advisory Committee Act (FACA)
are ours.
On the other hand, if the primary purpose is to help a nonfederal entity achieve its objectives.
the conference is theirs For example, a conference to facilitate nonfederal research is theirs,
even if EPA provides the meeting space. When nonfederal entities meet to share information on
environmental or scientific Issues, the conference is also theirs, even if EPA provides fin' acial
assistance. Conferences sponsored by associations of state or tribal officials to discuss EPA
programs implemented by these entities as co-regulators or as partners in a coordinated national
effort are theirs as well in certain situations. However, if EPA is in fact a convener and a
. lotivator for the conference, then the conference may be jointly sponsored rather than theirs.
Finally, if the conference assists the Agency and a nonfederal entity to accomplish mutual
objectives, it may be jointly sponsored. For instance, if the Agency and nonfederal entities share
an interest in promoting environmental awareness, such as recycling initiatives, a jointly
sponsored conference may be appropriate. It may also be appropriate when EPA, state, and local
government officials meet to share information about environmental problems.
(2) Control of the Planning and Agenda. The more control EPA or other federal agencies
exercise over the agenda and selection of speakers, the more likely the conference is ours. For
example, if conference scheduling is driven by the need to meet a regulation production deadline,
the conference is ours. Similarly, if the Agency has control over speakers, attendees, and
logistics, the conference is ours. However, if a nonfedera! entity controls planning and agenda
decisions, even with input from EPA, the conference is theirs Finally, if the Agency shares
control of these types of decisions, the conference may be jointly sponsored.
The following factors will provide you with more information to help you make the proper
determination of whose conference it is.
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•
DECISION INDICATORS: OURS
The purpose of (he conference is to.
discuss, evaluate, or plan a specific EPA activity or program
advise EPA on its operations (e.g.. FACA)
solicit public or stakeholder input to official EPA actions or policy
» develop official EPA positions on science or other policies
» train EPA staff or other direct implemented of EPA regulations
generate information to be incorporated directly into official EPA positions, such as policy.
regulations, or guidance
- propose, announce, or explain EPA actions
» disseminate mandated information
• EPA expects to control:
the agenda
- the selection of speakers, panelists, and/or attendees
» the duration, date, and location of the meeting
DECISION INDICATORS: THEIRS
•The purpose of the conference is to
discuss, evaluate, or plan non-EPA or public/private initiatives to improve the environment
share information on environment or scientific issues
support or stimulate public awareness of general environmental issues
facilitate info: ned public dialogue on environmental and policy questions
enhance management of non-EPA environmental programs
hold discussions by states and tribal associations of delegated environmental programs
•The nonfcderal entity expects to control.
the agenda
the selection of speakers, panelists, and/or attendees
the duration, dates, and location of the meeting
DECISION INDICATORS: JOINTLY SPONSORED
• The purpose of the conference is for federal and nonfederal entities to:
advance a mutual interest
develop products for common goal(s)
• The co-sponsors include both federal and nonfcdcral entities and conference costs arc shared
• Decisions are shared among the parties to the conference, including control of:
agenda planning
speaker selection
location selection
conference logistics
On Ihe following page, a summary chart provides a sidc-by-side overview of the indicators of
purpose and control to assist you in answering the question "Whose Conference is it?"
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WHOSE CONFERENCE IS IT: OVERVIEW OF INDICATORS
PURPOSE
CONTROL
"'.".
OURS (Chapter 2)
- Discuss, evaluate, or
plan a specific EPA
activity or program
- Advise EPA on hs
operations (e.g., FACA)
• Receive public or
stakeholder input to
official actions or policy
• Develop EPA science
and other policies
Training for EPA staff
or other implcmenters
of EPA regulations
» Generate information to
be used in official EPA
products, e.g.. guidance,
regulations, or policies
- 'ropose, announce, or
explain EPA actions to
other government
agencies, the public, or
stakeholders
•• Disseminate mandated
information
- EPA control of the
agenda
• EPA control over
selection of speakers.
panelists, and/or
attendees
> EPA control over
logistics, such as
duration, dates, and
location
THEIRS (Chapter 3)
- Discuss, evaluate, or plan
a non-EPA initiative to
improve the environment
» Share information on
environmental or related
scientific issues
- Support or stimulate
pubjic awareness of
general environmental
issues
» Facilitate informed public
dialogue on
environmental and policy
issues
Enhance management of
non - EP A/non fcdera 1
environmental programs
- Hold discussions by
states and tribal
associations of delegated
environmental programs.
• Non-EPA control of the
agenda
• Non-EPA control over
selection of speakers,
panelists, and/or
attendees
• Non-EPA control over
logistics, such as
duration, dates, and
location
JOINT (Chapter 4)
» Advance a mutual
interest by serving
both EPA's mission
and the substantive
interests of the
nonfederal co-
sponsor(s)
Develop products for
common goals
•
- Shared control of the
agenda
- Shared selection of
speakers, panelists,
and/or attendees
• Shared responsibility
for logistical
planning and
decisions
If you have determined that your conference is EPA-sponsored, proceed to Chapter 2. If you
have determined that it is theirs, proceed to Chapter 3. If the conference is going to be jointly
sponsored, proceed to Chapter 4. If you are still unsure after reviewing these factors, you should
contact OGC's Finance and Operations Law Office or Regional Counsel for guidance.
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CHAPTER 2: OUR CONFERENCE
A. EPA Conference — Overview. Once you have reviewed Chapter 1 and decide that the
conference is ours, there are three main ways that you can financially support it: (1) award a
contract or issue a work assignment under an existing contract, if tasks are covered within the
statement of work; (2) enter into an Interagency Agreement (IAG) to obtain services from
another federal agency; or (3) conduct the conference using Agency personnel. All of these
methods are appropriate ways to acquire services for our direct benefit and use. You cannot
properly use a grant or cooperative agreement to support "our" conference. You also need to
be aware of limitations relating to travel payments for conferences. This chapter lists and briefly
describes instruments that can be used to support an EPA-sponsored conference.
B. Funding Instruments.
1. Contracts may be used to fund "components" of the conference, such as space and
supplies, or they may be used to fund the whole conference, hiring a contractor to make most or
all of the arrangements. There are at least four commonly used contracting methods. 0AM can
provide you with a helpful guide for conference contracting entitled, "Your Preparation Guide
for Conferences/Meetings/Training." It focuses on small purchases, but is also useful for other
types of contracts. It includes copies of key policies and instructions on preparing a purchase
request Since the guide was written in Ma> 1995, the small purchase limit has changed, h is
currently $100.000
(a) Small items and services less than $2,500, sometimes called micro-purchases, may
often be purchased with a government credit card. Micro-purchases might include, for
example, meeting room rental, supplies, and equipment rental. Consult a warranted bankcard
holder for details on the use of such cards
(b) More extensive services, up to a total of $100,000, may be acquired through simplified
acquisition procedures, formerly known as "small purchases." You must be careful to
specify exactly what you need, as well as the basis on which bids will be reviewed. For
additional guidance on simplified acquisitions, consult the Contract Management Manual,
Chapter 2, and OAM's guidance, "Simplified Acquisitions Made Easy," dated April 1998.
(c) Some types of support can be obtained using a conference support contract. A
conference support contractor has little direct substantive interest in the conference and is
simply in the business of providing logistical support services. Conference support contracts
arc often written to provide recurring logistical support for an Office. Individual conferences
also can be supported by issuing Work Assignments or Delivery Orders under a broader
support contract, provided such support is within the scope of the contract.
(d) Some conferences arc funded under contracts with a contractor who has a direct interest
in the conference as an incidental task under a larger, broader contract's scope of work.
For example, a contractor tasked to determine the current stale of the art and recommend
improvements in an area of chemical analytical techniques may need to convene a conference
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Chapter 2: Our Conference fcontinueef)
to assist in that determination, as an incidental part of doing the job. The Agency is the
ultimate beneficiary, but the contractor is directly responsible for managing the conference.
Caution: In planning an EPA-sponsored conference, there may be situations where you need to
exercise care in determining what, if any, contractor support may be appropriate. Some Agency
conferences include candid discussions of sensitive budget, acquisition, and other planning
information that should be safeguarded. Special controls should always be in place to ensure that
contractors do not have inappropriate access to privileged and sensitive information (e.g.,
Confidential Business Information or procurement sensitive information). You should avoid
situations where contractors may have access to information that would give them an unfair
competitive advantage, or create an appearance of a conflict of interest. At anyAgency
conference, you should always identify contractors who are present and ensure that contractor
support staff wear badges and identify themselves.
2. Inferagency Agreements (lAGs). There are two types of lAGs: Economy Act lAGs and
Cooperation Authority lAGs authorized by EPA program statutes. (Note: If EPA provides
funds to another agency under an IAG, the IAG is subject to that agency's requirements, unless a
specific term and condition imposes EPA's requirements.)
(a) You may want to use another federal agency to help with putting on your conference. For
instance, a General Services Administration contract providing meeting logistics support
could be used. The proper way to do this is through an Economy Act IAG. Economy Act
lAGs are always intended to "acquire" services or property from another federal agency for
the direct use of EPA. Therefore, it is improper for the other agency to award a grant or
cooperative agreement to fulfill EPA's requirements. To use the Economy Act, both federal
agencies must be responsible for conducting the proposed activities and authorized to use
their appropriations for the work. The Economy Act specifies that the servicing agency must
recover its expenses and it cannot cost share. As of 1996, EPA's Grants Administration
Division (GAD) is required to prepare a "Determination and Finding" in support of an
Economy Act IAG, which states that the IAG is not being used to avoid competitive
contracting. You may be asked to provide information to help prepare this. Final approval of
the Determination and Finding rests with OAM. For additional guidance, sec memorandum
from GAD Director to IAG Project Officers, "Interagency Agreement Decision
Memorandum Guidance, Pre-award IAG Activities, and Subcontractor Selection," dated
Sept. 30, 1996.
(b) Cooperation Authority lAGs authorized by EPA Program Statutes involve mutual
cooperation and investment of resources between the cooperating federal agencies with an
overlapping mission and interest in the project For example, both agencies could contribute
resources to a cc.:-j2fencc, whether in the form of salaries, equipment, travel, or contract
services. GAD maintains a list of program statutes authorizing such cooperation. A list of
the statutory and related authorities which authorize the Agency to enter into lAGs is
provided as Attachment 4 to the previously referenced Sept. 30, 1996, memorandum from
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Chapter 2: Our Conference (continued}
GAD Director to IAG Project Officers.
3. Supporting Conferences with In-Housc Resources. EPA can also organize and conduct
conferences using only its own staff. In addition to planning the substance of the conference,
staff may carry out logistical arrangements such as identifying hotels and meeting space, taking
minutes, and registering attendees.
C. Allowability of Costs — Overview. Only a contracting officer has the authority to obligate
government funds under a contract. In planning a conference, you must not make financial
commitments to hotels or other vendors unless you have the authority to do so. Anyone who
undertakes to commit the government without authority risks being held personally liable by the
vendor for payment and may be subject to EPA disciplinary action. In working with a hotel to
reserve space, you must make it clear that you do not have the authority to sign a contract, but
are merely reserving space. Any short-term conference meeting space you obtain in the District
of Columbia must be procured under 41 CFR 101-17.101. In addition, direct procurement or
purchase of lodging facilities in the District of Columbia, without specific authorization and
appropriation by Congress, is prohibited. See 40 U.S.C. 34.
Both EPA employees and contractors are responsible for assuring that costs for conference
activities arc allowable and reasonable. Agency staff responsibilities include performing a
careful review of the proposed conference activities, the IAG or contract that funds the
confer nee, work assignments/amendments, and invoices. These reviews are conducted to
identify costs that are unreasonable and unallowable, or need further explanation or
documentation. All reviews should be documented. Federal laws and regulations provide the
basis for authorizing and paying for costs. Necessary and reasonable costs are for work that
benefits the project and arc within the project's scope. For further guidance, we recommend you
consult the FAR Part 31, "Contract Cost Principles and Procedures."
1. Meals, Snacks, and Refreshments. For additional guidance in this area, we recommend
you consult OAM Procurement Policy Notice 94-10, "Contracting for Meals and Refreshments
for Government Employees" and the EPA Travel Manual, Chapter 5.
(a) Meals. Appropriated funds may not be used to pay subsistence or provide food to
government employees at their official duty stations or when not on official travel status Sec
the EPA Travel Manual, Chapter 5.1 .b.(3).
(b) Snacks and Refreshments. Refreshments, such as snacks, alcoholic beverages and
coffee, are not considered necessary expenses and may not be included as part of the
conference room fee, nor can mandatory registration fees be used to pay these expenses
However, conference participants can "pass the hat" for voluntary contributions for coffee
and snack expenses.
(c) Exceptions Under Government Employee Training Act, 5 U.S.C. 4101. Under this
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Chapter 2- Our Conference fcontinued}
Act, EPA can provide meals, snacks, and refreshments to its employees if necessary to
achieve the objectives of the training program, and may furnish meals to non-government
sneakers as an expense of conducting the training. For additional guidance, consult OC
Policy Notice 92-07, page 3, "Procuring Subsistence for Tiaining/ConferOTces/Meetines''
and the EPA Travel Manual, Chapter 5.5.a. and b.
2. Honoraria. Generally, Agency appropriated funds may not be used to procure personal
gifts to be given to nonfederal speakers.
(a) Contractual speaker fees, whether or not called "honoraria," are permissible.
'b) If the speaker is a federal employee, the speaker is prohibited from receiving
compensation for speaking related to his or her official duties. However, federal speakers
may receive a modest nonmonelary award (e.g., plaques or mugs) to recognize an
achievement, under the Government Employee Incentive Award Act. For more information
and exceptions see the Standards of Ethical Conduct for Employees of the Executive Branch
(5 CFR 2635.201-205), August, 1992, and Office of Personnel Management Regulations (5
CFR Part 451.)
3. Procurement of Items for Distribution at EPA-Sponsored Conferences. Agency
policy precludes the purchase of certain items, such as tote bags, drinking containers and
wearin0 apparel, for distribution to the general public and EPA employees who mere'ly attend an
Agency-sponsored conference. Other items with low cost and limited utility (e.g., bumper
Dickers, buttons, pens and pencils) may be distributed widely at Agency-sponsored conferences
/ided the items convey an appropriate environmental message. See O AM Procurement
r-olicy Notice 95-01, "Procurement of hems for EPA Sponsored Commemorations and Events."
4. Registration Fees for EPA-Sponsored Conferences. Registration fees are payments
collected by EPA or its contractor from private and other public participants who are attending
an EPA-sponsored conference, and must be deposited in tlie Treasury oftlie United Slates,
unless the Agency has specific statutory autttority to treat such fees differently. See 31 U S C
3302(b). EPA appropriation laws do not include general authority to accept donations. Agency
policy states that organizations planning conferences and meetings should program and budget
for the administrative costs of these conferences and meetings and avoid establishing registration
fees, if at all possible.
Where it is necessary to establish registration fees, only expenses such as the costs of
necessary supplies and materials, printing, rental of facilities and equipment, and other items will
Sc included. Additionally, you can only charge a fee that will equal the actual costs of these
uerials. Mandatory registration fees should not include the cost of meals and unallowable
..^ms, such as entertainment, coffee, snacks, cocktails and other similar items of a refreshment
nature. However, any fees collected must be deposited in the Treasury. See the EPA Travel
Manual.
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Chapter 2- Our Conference (continued]
5. TraveL There are strict rules governing travel expenses incurred for EPA-sponsored
conferences. (Note: The rules governing travel for conferences and meetings that the Agency
conducts, and those carried out by recipients under grants and cooperative agreements, are
significantly different. In addition, travel rules differ for federal and nonfederal participants and
attendees.)
(a) Travel for Federal Employees. The Agency's appropriation allocates specific amounts
to finance necessary personnel expenses, including travel. These accounts are separate from
other accounts that fund contracts, grants, and other "extramural" operations of the Agency.
Therefore, a federal employee's travel expenses cannot be funded by an organization using
EPA extramural funds for that conference. Travel costs for EPA staff to participate in a
conference are covered as personnel expenses and may include registration fees as
appropriate. Staff participation is authorized for conferences relating to matters that would
improve the conduct, supervision, or management of Agency functions or activities. Agency
policy requires management to ensure that attendance at conferences "be authorized only to
the extent that it will provide direct benefit in achieving objectives related to EPA's mission."
Cost effectiveness in achieving our mission should be our basic guide. See the EPA Travel
Manual, Chapter 3.16.(a), (b) and (c). In some cases, EPA may choose to cover travel and
subsistence expenses for other federal employees to participate in an EPA conference.
assuming the other federal employee's need to travel is directly attributable to acuviiics
associated with the conference. This is not invitational travel, under 5 LJ.S.C. 5703. The
Agency can either issue an EPA travel order directly to the employee or can reimburse the
employee's agency through an IAG. For additional guidance, see memorandum from GAD
Director to EPA IAG Project Officers, dated Sept. 30, 1996.
When the conference is within 50 miles of the employee's duty station, the general rule is
that only such out of pocket expenses as POV mileage, parking fees, taxi, or subway fares
can be reimbursed. Waivers may be granted for EPA national conferences within the 50-mile
radius in certain limited circumstances. See the EPA Travel Manual, Chapter 5.5.
(b) Travel for Nonfederal Participants and Attendees. EPA may pay for travel and
subsistence expenses for nonfederal conference participants under invitational travel orders
when the individual performs a direct service for the Agency (e.g., facilitator, speaker,
panelist, or FACA member). Agency travel funds used for invitational travel orders are
charged against the inviting office's travel ceiling budget. Individuals receiving invitational
travel orders must follow federal travel regulations, except they cannot receive travel
advances. See 5 U.S.C. 5703 and the EPA Travel Manual, Chapter 3. The Agency cannot
use invitational travel authority to enable nonfederal personnel to merely attend conferences
that the Agency sponsors. Generally, appropriated funds cannot be used to pay for travel,
transportation, and subsistence expenses for nonfederal attendees unless such payments are
specifically authorized by law. See 31 U.S.C. 1345.
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Chapter 2: Our Conference (continued]
If the Agency pays travel for FACA members, it must be through invitational travel
orders because FACA members are providing a service to the Agency with their advice and
consultation. See 5 U.S.C. App. 2, Section 7 (d)(lXB) and the EPA Travel Manual Chapter
3.3.
(c) Contractors. A contract, including a purchase order, can include travel costs for an
individual performing services within the scope of the contract, such as providing logistical
services, training, peer review, or presentations. However, you must not violate the Agency's
policies prohibiting "directed subcontracting" by specifying to the contractor whom to hire.
See OAM Procurement Policy Notice 97-01, "Required Practices Concerning Subcontracts."
A contract cannot be used to procure travel for nonfederal individuals who merely attend the
conference. See OGC Memorandum, dated Sept. 22,1993, "Payment of Travel Expenses of
Non-Federal Participants at EPA Meetings."
(d) Authorization for Conference Travel. Travel to EPA sponsored, co-sponsored, or
non-EPA sponsored conferences by 30 or more EPA employees must be authorized by the
Assistant Administrators/Regional Administrators. This includes invitational travelers whose
travel expenses are being paid by EPA. See the EPA Travel Manual, Chapter 3.16.(a), (b)
and (c).
6. Printing of Conference Material. EPA will, as a matter of Arency policy, follow
Government Printing Office (GPO) procedures. EPA's Printing Officer acts as the Agency's
central management office and has responsibility for controlling EPA printing. Any questions
regarding whether a particular printing need falls within an exception to obtaining printing
services through GPO should be directed to the EPA Printing Officer. Circumvention of EPA
policy prohibiting the use of commercial printing services to print government documents,
without authorization from GPO, is a serious matter.
D. Location. Government-owned or government provided conference facilities should be used
to the maximum extent possible. If there is no space available in the Agency, managers should
contact the Facilities Office, which will contact GSA to determine if suitable government-owned
facilities are available in the desired area. The use of government-owned facilities versus
commercial facilities will be based on Agency need and overall cost of the conference. All
Assistant Administrators/Regional Administrators and senior managers are responsible for
ensuring that meeting sites are, to the extent feasible, held in or near EPA regional cities or major
laboratory facilities. However, there may be occasions where it is advantageous to select a site
outside the local area in order to focus on issues without local distractions. All EPA-sponsorcd
conferences, meetings, or training seminars being held in hotels or motels must comply with the
Hotel and Motel Fire Safety Act of 1990. A list of hotels and motels that comply with the Act
can be found in the monthly publication of the Federal Travel Directory issued by GSA. See
the EPA Travel Manual, Chapter 4.2.(d) and for additional information, see Federal Travel
Regulations, 41CFR Parts 301 -16 and 301 -17.
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When EPA holds a conference involving travel by 30 or more EPA employees or other
travelers whose expenses arc being paid by EPA, a cost comparison justifying the conference
location must be prepared. See the EPA Travel Manual, Chapter 3.16.(a), (b) and (c).
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CHAPTERS: THEIR CONFERENCE
A. Supporting a Conference Sponsored by a Nonfedcral Entity — Overview. If you have
reviewed Chapter 1 and decided that the conference is "theirs," EPA can provide financial
support in the form of giants, cooperative agreements, and Cooperation Authority Interagency
Agreements authorized by EPA program statute, provided EPA has the statutory authority. For
general guidance, see EPA Order 5700.1, "Policy for Distinguishing Between Assistance and
Acquisition." The Agency encourages fair.and open competition in the award of discretionary
assistance agreements in accordance with the Federal Grant and Cooperative Agreement Act of
1977. For additional guidance, sec Grants Management Fact Sheet No 9, "Competition for
Assistance Agreements."
B. Funding and Other Support Instruments.
1. Assistance Agreements
(a) Grants may be used to support the conference if all of the following tests arc met and
documented:
•
(i) it is to accomplish a public purpose of support or stimulation, not for our direct use or
benefit (see Chapter I of this guide);
(ii) it is for an eligible nonfederal entity (most statutes exclude profit making companies),
(iii) the principal purpose is to transfer money or other things of value:
(iv) it is authorized by law (you must cite a statutory authority for using an assistance
agreement to support the conference), and finally
(v) EPA is not substantially involved in the work and we do little more than watch for
progress and problems.
(b) Cooperative Agreements are essentially the same as grants and may be used if the
conference meets tests (i)-(iv) above. The difference is that cooperative agreements must be
used when EPA anticipates "substantial involvement" in the assistance relationship.
Cooperative agreements, like grants, may not be used when the purpose of the agreement is
to acquire services, information, or "stakeholder input" for the direct use and benefit of the
government. See EPA Order 5700.1.
(c) Assistance Agreements (grants and cooperative agreements) may also be used to support a
conference of state or tribal officials implementing a federal effort under a formal delegation or
as partners with EPA in a coordinated, national effort. Although the states or tribes provide
information or recommendations to EPA, the principal purpose of the assistance is to support the
participation of states or tribes in the development of environmental policies and programs that
they implement. For detailed guidance, see EPA Order 5700.1, pages 8-9. (These kind of
conferences may also be Jointly Sponsored See Chapter 4.)
2. Cooperation Authority Interagency Agreements Authorized by EPA Program
Statute involve mutual cooperation and investment of resources between tlic cooperating federal
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Chapter3: Their Conference (continued}
agencies with an overlapping mission and interest in the project For example, both agencies
could contribute resources and fund the conference arrangements through a grant, cooperative
agreement, or contract awarded by one of the agencies. GAD maintains a list of program statutes
that authorize such cooperation. EPA cannot use an IAG to provide funds to another agency to
award a grant that EPA cannot award itself. For additional guidance, consult memorandum from
GAD Director to IAG Project Officers," IAG Decision Memorandum Guidance, Pre-award
Activities, and Subcontractor Selection," dated Sept. 30,1996. (Note: If EPA provides funds to
another agency under an IAG, the LAG is subject to that agency's requirements, unless a specific
term and condition imposes EPA's requirements.)
3. In-Kind Assistance. The Agency may provide support other than direct monetary
assistance. For example, we could devote EPA staff time, space, copying equipment and
supplies. We could also agree to prepare papers for submission to a conference, provide EPA
speakers, or make facilities available. In addition, the services of an EPA contractor, such as a
logistics contractor or a meeting support contractor, can be provided as a form of in-kind
assistance. A determination must be made that providing contractual services instead of funds is
more economical. The cost of the contractual services must be charged to the grants object class
and should be documented in the assistance agreement if possible.
C. Allowability of Costs — Overview. Many of the constraints associated with funding an
EPA-sponsored conference do not apply to funding nonfederal entities' conferences through
federal assistance agreemer s. However, grant costs must comply with applicable assistance
regulations. See 40 CFR Parts 30 and 31.
Both EPA employees and assistance recipients are responsible for assuring that costs for
conference activities are allowable, reasonable, and allocable to the grant. Agency staff
responsibilities include performing a careful review of proposed conference activities and the
assistance agreement that funds the conference. Reviews are conducted to identify costs that are
unreasonable and unallowable or need further explanation or documentation. All reviews should
be documented. Also, assistance recipients must comply with OMB Circular A-122, "Cost
Principles for Non-Profit Organizations," OMB Circular A-21, "Cost Principles for Educational
Institutions," or OMB Circular A-87, "Cost Principles for State and Local Governments." See
also Part 31 of the FAR, which provides cost principles for assistance recipients that arc profit
organizations
1. Entertainment vs. Education. As a general rule, assistance funds ma> not be used for
entertainment costs. Entertainment, as defined in the General Accounting Office's Principles of
Federal Appropriations l^aw. Volume I, Chapter 4, includes "a source of amusement, a diverting
performance, especially a public performance, such as a concert, drama, or the like." Providing
technical policy, or program information to educate the public at a conference is allowable. The
distinction1 between unallowable entertainment and allowable education costs is not always clear.
What the recipient sees as an interesting and informative presentation, the general public or
auditors may sec as entertainment. The recipient should adequately document the purpose of
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Chapter 3: Their Conference (continued}
expenses that may be perceived as entertainment. See OMB Circulars A-21, A-87, and A-122
for unallowable costs.
2. Meals and Refreshments. The costs of meals and refreshments may be charged to
assistance agreements only to the extent that they are allowable under the OMB Circulars
A-21, A-87, and A-122. Generally, the cost of meals that are essential to the business of a
conference because they are accompanied by presentations or panel discussions are not likely to
be questioned. Also, refreshments at breaks are generally allowable, provided the costs are
reasonable.
3. Travel. The rules governing travel for conferences and meetings that the Agency
conducts, and those carried out by recipients under grants and cooperative agreements, are
significantly different.
(a) Nonfedcral Attendees. Assistance funds can be used to defray transportation and
subsistence expenses for nonfederal attendees in conferences that the recipient carries out.
The decision as to who receives transportation and subsistence expenses is the recipient's, not
EPA's, and EPA should avoid even the appearance of directing the recipient to provide travel
to specific individuals.
(b) Federal Employee Travel. Agency employees may attend recipient conferences as part
of their official duties. However, assistance funds cannot be used to fund travel for federal
employees because this would circumvent limits on government travel ceiling. See Ethics
Advisory 92-26, "Revised Rule on Acceptance of Travel Expenses," dated Dec. 24, 1992.
EPA may use its own travel funds to enable a federal employee to attend a conference
relating to matters that would improve the conduct, supervision, or management of Agency
functions or activities. A nonfederal organization can use its own funds (not part of a match
for a grant or cooperative agreement) to pay for EPA employee travel provided the
appropriate Ethics Advisories are followed. You should consult an Agency Ethics Advisor
for guidance. See also Ethics Advisory 92-26, Ethics Advisory 97-05, "Addendum to EPA
Ethics Advisory 92-26, Accepting Travel Expenses," dated March 13, 1997, and Ethics
Advisory 94-17, "Providing Speakers at Conferences, Seminars, and Similar Events," dated
April 13, 1995, and Standards of Ethical Conduct for Employees of the Executive Branch (5
CFR2635).
(c) 30 or More Federal Attendees. Travel to any conference, including conferences
sponsored by recipients, involving travel by 30 or more EPA employees must be authorized
by the Assistant Administrators/ Regional Administrators See the EPA Travel Manual,
Chapter 3.16.(a), (b) and (c). The number of employees attending the conference (whether
they pay registration fees or not) must not create the appearance that the conference is being
conducted for EPA's direct use and benefit.
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Chapter 3: Their Conference (continued)
4. Registration Fees. Registration fees are payments collected by the assistance recipient
from attendees to a conference. Project officers managing assistance agreements that support
conferences should always find out in advance whether registration fees will be collected, and if
so, how those fees will be used. Project officers should address the definition and disposition of
program income in a term and condition of the assistance agreement. See 40 CFR Parts 30.24
and 31.25. Registration fees are considered program income, under the grant regulations, if the
activity generating the fee is within the scope of work and is funded by the assistance agreement.
In such cases, registration fees, as program income, must be accounted for and used to defray
allowable costs under the agreement. Fees for events conducted independently of the assistance
agreements, which are not financed under the assistance agreement, are not subject to program
income rules.
D. Use of EPA Logo. Use of the Agency's logo in connection with promotion or sale of non-
government produced goods or services is forbidden. See EPA Order 1015.2A, "EPA Seal and
Agency Identifier." Promotional material for conferences conducted under grants and
cooperative agreements may acknowledge that the conference receives financial support from the
Agency under an assistance agreement, but cannot use the logo on a conference brochure in a
manner that implies that the conference is being conducted by EPA. These conferences should be
described as the recipient's event, not EPA's.
E. Lobbying. Federally funded conference activities cannot include lobbying. See OMB
Circulars A-21. A-87, and A-122.
F. Printing of Conference Material. An assistance recipient conducting a conference may use
its grant funds for printing conference material (e.g., brochures/proceedings/reports). EPA may
also print conference materials as a form of in-kind assistance provided the Agency follows GPO
printing procedures.
G. EPA's Use of Assistance Recipients' Conference Proceedings and Reports. The Agency
has the irrevocable and non-exclusive right to reproduce and publish, use, or authorize others to
use conference proceedings and reports for federal government purposes. However, EPA's use
of a conference proceeding or report must be incidental to the principal purpose of the assistance
agreement. See EPA Order 5700.1 and 40 CFR Parts 30.36 and 31.34.
H. Free Attendance by EPA Employees. Agency employees may attend recipient conferences
as part of their official duties. However, the number of employees attending the conference
without paying registration fees must not create the appearance that the conference is being
conducted for EPA's direct use and benefit.
I. Location. All conferences, meetings or training seminars EPA sponsors or funds, in whole
or in part, which are held in hotels or motels must comply with the Hotel and Motel Fire Safely
Act of 1990. This applies to the government of the District of Columbia only when il expends
federal funds for a conference and to non-federal entities when government funds are provided
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Chapters: Their Conference (continued]
for the conference. A list of hotels and motels that comply with the Act can be found in the
monthly publication of the Federal Travel Director}' issued by GSA. See the EPA Travel
Manual, Chapter 4.2.(d) and Federal Travel Regulations, 41CFR Parts 301-16 and 301-17.
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CHAPTER 4: JOINTLY SPONSORED CONFERENCES
A. Supporting a Jointly Sponsored Conference - Overview. "Co-sponsorship" occurs when
EPA and a nonfederal entity share a mutual interest in the subject matter and jointly develop a
conference related to EPA's mission. The co-sponsors must have a substantial interest in the
subject matter of the conference although their individual goals may be different. After you have
reviewed Chapter 1 and decide that the conference may be "jointly sponsored,:' you should also
consult EPA Ethics Advisory 96-15, "Guidance on Co-sponsoring Conferences;' which covers
restrictions on jointly sponsored conferences. In order to avoid any misunderstandings when you
hold a jointly sponsored conference, it is important that EPA have an advance written agreement
with its co-sponsor(s) describing the intended roles and responsibilities of each co-sponsor.
B. Areas of Concern.
1. Appearance. EPA may actively seek out prospective co-sponsors. Whether EPA is
actively seeking or has been approached with a co-sponsorship proposal, it is important to avoid:
(a) Appearance of coercion, that is, creating the reasonable impression that EPA is coercing
or being coerced by an outside entity to become a co-sponsor.
(b) Appearance of favoritism To avoid creating the appearance that EPA is favoring certain
entities, we should, where practicable, inform all similarly situated nonfederal entities of the
opportunity for co-sponsorship. We should be able to explain why we chose a particular co-
sponsor over another.
(c) Appearance of EPA endorsement of the policies, activities, or products of the co-sponsor.
Co-sponsorship does not imply the Agency's endorsement of the co-sponsor's general
policies, activities or products, and event-related materials. Nonfederal sponsors must agree
to clear all promotional materials for the event with the Agency.
(d) Appearance of improper influence on EPA decisions. When seeking to co-sponsor a
conference with an entity that seeks some official action by EPA, is regulated by EPA, or
seeks EPA funding, you should consult your Ethics Advisor.
2. Augmentation of Appropriated Funds.
(a) No "funds only" Co-sponsorships. Co-sponsorships improperly augment EPA
appropriations when the nonfederal entity contributes only funds, logistical services, or other
material support, but does not actively participate in developing the program. In that case, it
is not really a jointly sponsored conference, but "our" conference for which we have received
outside funds. For the same reason, co-sponsors must have a demonstrable substantive
interest in the subject matter of the event.
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Chapter A: Joint Conference fcontinuetf)
(b) Events Solely for Government Employees. To avoid improper augmentation of
appropriations, EPA should not co-sponsor events which will be attended only by federal
employees.
(c) Registration Fees. Generally, registration fees collected by EPA, or its contractors
must be deposited in the Treasury as miscellaneous receipts, as required by 31 U.S.C 3302
If authorized by EPA, an assistance recipient may retain and use conference fees as "program
income." (See Chapter 3.) A co-sponsor, who does not receive assistance, may also collect
fees to cover its share of expenses (e.g., expenses a co-sponsor, rather than EPA, is obligated
to pay if there is a shortfall in fees). To avoid misunderstandings, you should ha've an
advanced written agreement on who collects fees and their use. For additional guidance
consult Ethics Advisory 96-15.
3. Lobbying. Since appropriated funds are being used to support EPA co-sponsored
conferences, the Anti-Lobbying Act of 1919 and any government-wide lobbying restriction
contained in an Appropriation Act is applicable. Although information regarding the substance
of pending legislation can be a pan of a conference agenda, the conference cannot be a forum for
encouraging a "grassroots" lobbying campaign to influence Congress For additional guidance,
see memorandum from OGC, "Appropriation Act Lobbying Restrictions," dated July 9, 1997
C. Instruments - Overview. For jointly sponsored conferences, acquisition instruments, as
discussed in Chapter 2, or cooperative rgreements, as discussed in Chapter 3, may be used'.
Choice of instruments, or use of more than one instrument, should be carefully considered in
order to ensure that EPA's costs, as well as an assistance recipient/co-sponsor's costs, are
allowable under the chosen instrument. See Section D of this chapter for an example of a jointly
sponsored conference involving both acquisition and assistance instruments, and Section E
regarding allowability of costs.
I. Acquisition. EPA may undertake its responsibilities as a co-sponsor of a conference with
contractual and other support discussed in Chapter 2 of this guide. See also OAM's guide, "Your
Preparation Guide for Conferences/Meeting&Training."
2. Assistance Agreements may be used to support the co-sponsor's efforts in connection
with the conference as long as the financial assistance is used to support a public purpose rather
than for EPA's direct use or benefit (examples of direct use or benefit are to assist in
development of Agency regulations or guidance, evaluate EPA programs, or discuss the
Agency's positions with stakeholders). Jointly sponsored conferences require the involvement
of the Agency. Therefore, cooperative agreements rather than grants should be used to fund
these conferences, and the program's substantial involvement would be included under the
"terms and conditions'" of the assistance agreement.
Even under a cooperative agreement, the Agency's substantial involvement must avoid the
appearance of circumventing the invitational travel restrictions Sec the Standards of Ethical
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Chapter 4: Joint Conference (continued}
Conduct for Employees of the Executive Branch (5 CFR 2635) and also Chapters 2 and 3 of this
guide for details. If assistance funds are used to pay nonfederal travel expenses, the decision as
to who receives transportation and subsistence expenses is the recipient's, not EPA's. The
Agency should avoid even the appearance of directing the recipient to provide travel to specific
individuals. See Chapter 3 of this guide for details.
D. Funding Instruments: Hypothetical Example of a Jointly Sponsored Conference Using
Multiple Instruments. EPA, an association of state governmental agencies, a tribal
organization, and a civil rights non-governmental organization (NGO) decide to co-sponsor a
conference on environmental justice (EJ). EPA chairs an Interagency Working Group on EJ
under the EJ Executive Order and has taken a leading role in addressing EJ concerns. The
conference provides a wide range of interested parties with information on various perspectives
on EJ and governmental implementation. Speakers include federal and state officials, tribal
representatives, academics, minority community activists, and representatives of environmental
and civil rights NGOs. The conference is open to attendance by federal, state, tribal, and local
government staff, members of tribes, interested citizens, university faculty and students, and
industry and business representatives from throughout the United States. The co-sponsors work
together to develop the substantive agenda, identify speakers and panelists, and promote
attendance. Approximate!) 70% of the attendees are nonfederal.
The following are examples of funding instruments, and an explanation of why they are — or
arc not — appropriate for funding certain conference costs:
/. Contract.
• EPA provides logistical support for the conference through a contractor. Because
EPA is a co-sponsor of the conference, this is appropriate.
One of the non-EPA co-sponsors asks the contractor to make travel arrangements for
some students to attend the conference. This is not appropriate. First, the contractor
may only take direction from the authorized EPA project officer or contracting
officer. Second, because simply attending the conference does not meet the criteria
for invitational travel under 5 U.S.C. 5703, the students1 travel is not an allowable
cost under an EPA contract.
2. Cooperative Agreements.
(a) Existing cooperative agreement between EPA and the co-sponsoring association of
state governmental agencies:
• The purpose of the association's cooperative agreement is to carry out activities
related to implementation of EJ requirements, including collecting and analyzing
economic and social science data on siting hazardous waste facilities and
disseminating this information to local governments and communities. The
association pays the travel costs of some local officials and community leaders to
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Chapter 4: Joint Conference (continued]
attend the conference. The costs are allowable because they further a purpose of the
cooperative agreement, and the association, rather than EPA or its contractor, decided
who would receive the travel assistance and made all travel arrangements. The
association's participation in the conference was intended principally to further the
interests of the association and its membership rather than to provide logistical or
other services to EPA.
(b) New Cooperative Agreement between EPA and the tribal organization co-sponsor
• The purpose of the cooperative agreement is to assist tribes in developing the capacity
to understand environmental issues affecting their communities and to participate in
solving their environmental problems. One of the activities under the cooperative
agreement is co-sponsorship of the conference. Costs associated with this activity are
for publicizing the conference, developing printed material for the conference about
tribal EJ concerns, paying travel expenses for tribal speakers and attendees, and
producing an EJ information source book for tribes and tribal community groups to
use after the conference. A cooperative agreement is appropriate because EPA is
substantially involved in the tribal association's capacity building activities, including
joint sponsorship of the conference
The tribal organization also decides to sponsor a social reception at the conference,
including alcoholic beverages, food, and Native American music. The costs of the
reception are not allowable under the cooperative agreement because they are for
entertainment. This is an independent event and not part of the co-sponsored
conference, therefore EPA (and its contractor) are not involved in the planning or
organizing of the reception. However, information materials for the conference can
include a reference to the event. See Ethics Advisory 96-15.
E. Allowability of Costs Overview. Only a contracting officer or a grants award official has
the authority to obligate the federal government to expend funds. If you are not a contracting
officer, you cannot make any financial commitments to hotels or other vendors. Anyone who
undertakes to commit the government to expend funds without authority risks being held
personally liable by the vendor for payment and subject to EPA disciplinary action.
The cost principles and regulations applicable to the selected funding instruments remain in
effect Joint sponsorship does not affect the rules regarding allowability of costs under contracts
or assistance agreements (cooperative agreements). See Chapter 3, Section C of this guide for
allowability of costs under assistance agreements.
F. Issues Relating to Jointly Sponsored Conferences.
1. Free Attendance for EPA Employees. If EPA and the nonfcdcral co-sponsor agree that
Agency employees will be allowed to attend the event for free, they may do so at the discretion
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Chapter 4: Joint Conference (continued}
of their supervisor. Free attendance includes the waiver of all or part of any registration fee, and
the provision of food, refreshments, entertainment, instruction, and materials furnished to all
attendees as part of the event at the co-sponsor's expense. It does not include travel expenses,
lodging, or meals taken other than in a group setting with all attendees. If EPA employees are to
receive a waiver of registration fees, that should be documented in an advance written agreement
with the co-sponsor. See Ethics Advisory 96-15, "Guidance on Co-Sponsoring Conferences."
2. EPA Property and Services. EPA supplies and property can be used by the nonfederal
co-sponsor only to directly support the jointly sponsored event For example, you should not
provide the co-sponsor with franked envelopes without careful monitoring of their use. See the
Standards of Ethical Conduct for Employees of the Executive Branch (5 CFR 2635, Subpart G,
"Misuse of Position" Aug. 1992).
3. Social Events. EPA may not be a co-sponsor of an event that is primarily social in
nature. However, EPA may jointly sponsor an event that has a social component (such as a
modest reception), so long as the event has a primarily educational or informational purpose that
is related to EPA's mission. Agency assistance funds cannot be used for entertainment See
paragraphs F. 6 and 7 of this Chapter regarding Food and Refreshments.
4. Co-sponsors' Independent Events. If a co-sponsor independently funds (not using
federal funds or its match) a discrete portion of the conference (e.g., a reception), Agency staff
should not assist the co-sponsor in planning or organizing this event except to the extent
necessary to coordinate the overall program. In addition, Agency property or facilities should
not be used for this purpose. However, informational materials about the overall conference may
include information about the co-sponsor's independent activity. See the Standards of Ethical
Conduct for Employees of the Executive Branch (5 CFR 2635 Subpart G, "Misuse of Position"
Aug. 1992). We recommend you consult OGC's Finance and Operations Law Office or your
Regional Counsel for further guidance.
5. Fundraising. EPA shall not assist in fundcaising for the co-sponsor's share of the event.
Where a co-sponsor intends to solicit funds from other sources for its share of costs, EPA should
receive assurance that: (1) the solicitation will make clear that the requester is the co-sponsor, not
EPA; (2) the co-sponsor will not imply that EPA endorses any fundraising activities; and (3) any
gifts will be used solely for co-sponsor's share of expenses, noi EPA's.
6. Food and Refreshments for EPA Employees. EPA may not use appropriated funds for
food and refreshments for EPA employees attending co-sponsored events at their official duty
stations except as authorized by the Government Employees' Training Act at 5 U.S.C. 4101.
If a nonfederal co-sponsor imposes a charge for conference related meals that it furnishes, the
Agency can pay for the meals provided: (1) the meals arc incidental to the meeting (in other
words, the participants are getting together to do more than cat); (2) the employee's attendance at
the meals is necessary to full participation in the business of the conference; and (3) the
employee is not free to take the meals elsewhere without being absent from essential formal
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Chapter 4: Joint Conference (continued]
discussions, lectures or speeches concerning the purpose of the conference. See GAO's
Principles ofpederal Appropriations Law, Volume I, Chapter 4, pages 4-88 and 4-89. Agency
employees who are in travel status can include the meal cost on the travel voucher, and must also
adjust their per diem claim downward by a formula which takes into account the fact that meal
costs were reimbursed as part of the meeting expenses.
If EPA employees are attending a co-sponsored event where food and refreshments are
provided by the nonfederal co-sponsor, without charge, they may participate if authorized under
the Ethics Regulations. Otherwise, the rules cited in Chapter 2 of this guide apply See also
Ethics Advisory 96-15.
7. Food and Refreshments for Nonfederal Attendees. EPA may not use appropriated
funds for food and refreshments for nonfederal attendees unless: (1) the recipient is participating
as a speaker in a training event (see the Government Employees Training Act, 5 U.S.C. 4101);
(2) the recipient is providing a direct service to the'Agency and has received "invitational travel
orders" under 5 U.S.C. 5703, in which case other travel expenses may also be paid; or (3) the
Administrator's "reception and representation" fund is used. Also, conference attendees may
voluntarily "pass the hat" to pay for food and refreshments.
8. Use of EPA Logo. The official logo may be used on promotional and conference
materials for conferences EPA jointly sponsors with outside groups. The co-sponsor's logo
should also be used on promotional and conference materials and should be Displayed at least as
prominently as EPA's. See EPA Order 1015.2A "EPA Seal and Agency Identifier."
9. Printing of Conference Material. EPA must comply with GPO printing requirements if
it prints conference material (e.g., brochures or conference proceedings and reports). See
Chapter 2 for additional guidance. An assistance recipient (the co-sponsor) may use its grant
funds to print conference material, as discussed in Chapter 3.
10. Location. If EPA is responsible for selecting the conference site and paying for the
facility and the conference involves travel by 30 or more EPA employees, or other travelers
whose expenses are being paid by EPA, a cost comparison justifying the location must be
prepared. See the EPA Travel Manual, Chapter 3.16.(a), (b) and (c).
All conferences, meetings or training seminars EPA sponsors or funds, in whole or in part,
which are held in hotels or motels must comply with the Hotel and Motel Fire Safety Act of
1990. This applies to the government of the District of Columbia only when it expends federal
funds for a conference and to non-federal entities when government funds are provided for the
conference. A list of hotels and motels that comply with the Act can be found in the monthly
publication of the Federal Travel Directory issued by GSA. See the EPA Travel Manual,
Chapter 4.2.(d) and for additional information, see Federal Travel Regulations 41CFR Parts
301-16 and 301-17.
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CHAPTER 5: MAINTAINING PROPER DOCUMENTATION
Clear and complete documentation is crucial for effective management of assistance and
acquisition instruments. Fully documenting the who, what, where, when, and why of your
conference will be very helpful in the event of an audit, when you will be asked to provide up-to-
date and complete records.
Depending on the funding instrument used to support a conference, the documentation
required will differ. For required documentation on contract files, you should consult the
rnntraet Management Manual and the Contract Administration Training Manual, Chapter 6,
which provides a helpful file plan. For required documentation for assistance agreements, you
should consult the Managing Your Assistance Agreement Training Manual, Appendix Q,
-Official EPA Project File, and Grants Management Fact Sheet No. 10, "Assistance Agreement
File Documentation."
One of the most critical documents for assistance agreements is the decision memorandum,
justifying the use of an assistance agreement versus a contract to support conference activities. If
the objective of the project is to conduct a conference, GAD's "Guidance for Preparing an
Assistance Funding Package," dated April 28, 1997, requires that you address the following in
the memorandum:
Who is initialing the conference?
How will it be advertised?
Whose logo will be used for materials?
What is the percentage of participants (i.e., feds, public, state/local)?
Will the recipient prepare the proceedings and disseminate the information back to the
targeted community?
When you hold a jointly sponsored conference, in order to avoid any misunderstandings, it is
important that EPA have an advance written agreement with co-sponsor(s) describing the
intended roles and responsibilities of each co-sponsor. The following is a checklist of some
important documents that should be retained in the official project file for an assistance
agreement or a contract:
Application for assistance agreement
Assistance agreement (agreement joint application)/award documents or Contract
Co-Sponsorship agreement for conferences
Decision memo for assistance agreements
AA/RA justification for conferences with more than 30 EPA travelers
Amendments and modifications to the original documents)
Financial information/reports, copies of progress reports
Memoranda/con-espondence/agendas/proceedings/papers including programmatic reviews
Documentation of telephone conversations and meeting reports
Reviews and audits conducted on the project
Final reports and closcout information
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REFERENCE LIST BY SUBJECT MATTER
A. Introduction. This is a list, grouped by subject matter (travel, food, etc.), of commonly
referenced documents containing information relating to EPA's and its employees' involvement
in conferences. Many of the documents cited in this reference list and the Best Practices Guide
for Conferences are available electronically. Office of the Comptroller Policy Announcements
and Transmittals (all OC Policy Announcements and Transmittals issued before May 1995 have
been incorporated into the EPA Travel Manual) and the EPA Travel Manual can be accessed at
http://intTaneLepa.gov/nTidvalIy/rmd.htm. The Contracts Management Manual and Procurement
Policy Notices can be accessed at http://intraneLepa.gov/oaniintra. Many OIG reports can be
found on EPA's Home Page under Offices and Labs/Office of the Inspector General, also check
http://intraneLepa.gov/oigalsii/cimi.
You can also access GAO Comptroller General Decisions (since October 1995) and the
Principles of Federal Appropriations Law (the Red Book) through GAO's home page at
www.gao.gov. The Code of Federal Regulations and the United States Code are accessible
through EPA's home page under Regulations. Executive Orders and OMB Bulletins and
Circulars can be accessed through www.whitehouse.gov.
B. General Acquisition and Assistance Requirements.
Contracts Management Manual: Covers issues related to the EPA acquisition process
Procurement Policy Notice No. 97-01 - Required Practices Concerning Subcontracts, Jan. 8,
1997: Includes prohibition against "directed subcontracting."
Simplified Acquisitions Made Easy, April 1998: Provides accessible policies,
procedures and guidelines for simplified acquisitions. This Q&A guidance is provided on the
OAM intranet site (http://intranet.epa.gov/oamintra)
Procurement Policy Notice No. 95-01- Procurement or Items for EPA Sponsored
Commemorations and Events, April 10, 1995: Provides guidance regarding the purchase of
items to be distributed to the general public and EPA employees.
EPA Order 5700.1, Policy for Distinguishing Between Acquisition and Assistance, March
22, 1994: • Clarifies the criteria for and to achieve consistency in selection and use of
contracts, cooperative agreements and grants by all EPA offices and laboratories.
Memorandum from GAD Director to IAG Project Officers, Sept. 30, 1996: Provides IAG
decision memorandum guidance, pre-award activities, and subcontractor selection.
Managing Your Financial Assistance Agreement Training Manual — Project Officer
Responsibilities, EPA 202-B-94-OOI, Oct. 1996: Identifies administrative responsibilities of
project officers, grants management offices (GMO), financial management offices (FMO),
and other players involved in the management of assistance agreements.
Participant Reference Manual - Office of Research and Development Project Officer's
Course for Assistance Management (Grants and Cooperative Agreements) Sept. 1995:
Identifies administrative responsibilities of project officers, grants management offices
(GMO), financial management offices (FMO), and other players involved in the management
o f ass i stance agreements.
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Reference List (continued]
Grants Management Fact Sheet No. 9 - Competition for Assistance Agreements: Addresses
the need to encourage competition in the award of assistance agreements.
Grants Management Fact Sheet No. 10 - Assistance Agreement File Documentation:
Addresses the need to adequately document assistance agreement files, particularly with
regard to relevant communication.
Guidance for Preparing an Assistance Funding Package, April 28, 1997: Addresses the need
for justification in Decision Memoranda when using assistance for conferences.
C. Conference Planning and Site Selection
The EPA Travel Manual (Chapter 2550B of the Resources Management Directives System) of
1995: Incorporates all travel-related Policy Announcements and Transmittals issued by the
Office of the Comptroller after May 1988 through May 1995. See Chapter 5.
Your Preparation Guide for Conferences/Meetings/Training, May 1995: Explains how to
provide logistic support for conferences through small purchase procurement.
EPA Ethics Advisory 96-15, Guidance on Co-Sponsoring Conferences, Oct. 17, 1996:
Addresses legal and ethical issues that arise in connection with co-sponsored conferences.
EPA Order 1015.2A - EPA Seal and Agency Identifier, Dec. 27, 1978: Updates requirements
for use of official EPA seal and provides directions for use of Agency Identifier.
EPA Ethics Advisory 94-17- Providing Speakers at Conferences, Seminars, and Similar
Events, April 13, 1995: Suggests things to consider when EPA employees are asked to
actively participate in non-government conferences.
Committee on Integrity and Management Improvement Bulletin 95-4, Conferences and
Meetings, May 1995: Highlights EPA's policy on scheduling conferences and meetings.
D. Travel
The EPA Travel Manual (Chapter 2550B of the Resources Management Directives System) of
1995: Incorporates all travel-related Policy Announcements and Transmittals issued by the
Office of the Comptroller after May 1988 through May 1995.
,On The Way With EPA, A Reference Guide for Travel: Answers commonly asked questions
regarding official temporary duty (TOY) travel for EPA employees and EPA funded travel
for non-EPA employees (invitational travelers).
EPA Ethics Advisor}' 92-26, Revised Rule on Acceptance of Travel Expenses, Dec. 24, 1992:
Advises that assistance funds cannot be used to fund travel for federal employees because
this would circumvent limits on government travel ceiling. See also EPA Ethics Advisory
96-19, New One-Page Travel Acceptance Form, Dec. 17, 1996, which provides a revised
attachment to Ethics Advisory 92-26; and EPA Ethics Advisory 97-05 Addendum to EPA
Ethics Advisory 92-26, Accepting Travel Expenses, March 13, 1997.)
EPA Ethics Advisory 94-17, Providing Speakers at Conferences, Seminars, and Similar
Events, April 13, 1995: Provides additional guidance on related travel issues.
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Reference List (continued]
Related OGC Memoranda
Travel Expenses of Non-Government Employees, June 1982: Discusses the mles governing
EPA's payment of travel expenses of non-government employees who attend meetings
sponsored by EPA.
Compensation and Reimbursement of FACA Committee Members and Consultants
June 1, 1993: Explains when EPA can use contract funds to pay for travel, and when it
must use Agency travel funds.
Reimbursement of Travel and Per Diem Expenses of Federal Advisory Committee
Members, June 22, 1993: Advises that travel and per diem expenses of advisory committee
members may only be paid through the issuance of invitational travel orders and charged to
an appropriate EPA travel account.
Reimbursement of Travel Expenses of Members of Federal Advisory Committees Through
an Interagency Agreement, SepL 7, 1993: Discusses whether a contract issued under an
IAG can be used to pay travel expenses of FAGA members.
Payment of Travel Expenses of Non-Federal Participants at EPA Meetings, Sept. 22, 1993
Discusses whether it is appropriate to pay for the travel expenses of individuals, such'as peer
reviewers, by contract.
E. Food
The EPA Travel Manual (Chapter 2550B of the Resources Management Directives System) of
1995: Incorporates all travel-related Policy Announcements and Transmittals issued by the
Office of the Comptroller after May 1988 through May 1995. See Chapter 5.5.
Procurement Policy Notice (PPN) 94-10 - Contracting for Meals and Refreshments for
Government Employees, Aug. 17, 1994: Sets forth the restrictions for direct acquisition of
EPA employees' meals and refreshments, i.e., meals at conferences/meetings as part of
authorized training, or meals or food and beverages at an official Agency ceremony.
F. Federal Advisory Committee Act Meetings fFACA)
The EPA Travel Manual (Chapter 2550B of the Resources Management Directives System) of
1995: Incorporates all travel-related Policy Announcements and Transmittals issued by the
Office of the Comptroller after May 1988 through May 1995. See Chapter 3.3 and 3.6.
Related QGC Memoranda
Compensation and Reimbursement of FACA Committee Members and Consultants,
June 1, 1993: Explains when EPA can use contract funds to pay for travel, and when it must
use Agency travel funds.
Reimbursement of Travel and Per Diem Expenses of Federal Advisory Committee
Members, June 22, 1993: Advises that travel and per diem expenses of advisory committee
members may only be paid through the issuance of invitational travel orders and charged to
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Reference List (continued)
an appropriate EPA travel account It is not appropriate to reimburse travel or per diem
expenses of advisory committee members through a contract
Reimbursement of Travel Expenses of Members of Federal Advisory Committees Through
an Inter-agency Agreement, Sept. 7,1993: Discusses whether a contract issued under an
IAG can be used to pay travel expenses of FACA members.
G. Lobbying
Related OGC Memorandum
Appropriation Act Lobbying Restrictions, July 9, 1997: Provides guidance on lobbying
restrictions.
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United States
Environmental Protection Agency
Las Vegas Finance Center (LVFC)
May 2002
Replaces Nov. 1990
edition
US ENVIRONMENTAL PROTECTION AGENCY
ELECTRONIC FUNDS TRANSFER (EFT)
PAYMENT PROCESS
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Prepared by:
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I PURPOSE
These instructions provide procedures to be followed by participating recipient organizations fo"
requesting funds authorized by assistance agreements from the U.S Environmental Protection
Agency (EPA) under the Electronic Funds Transfer (EFT) Payment System, herein referred to as
the EPA-EFT Payment Process This system utilizes Automated Clearing House for transferring
payments to your banking institution
II AUTHORITY
These instructions are established under provisions in the Federal Acquisition
Regulation guidelines provided by the U.S. General Services Administration (GSA), Section
52.232-28 "Electronic Funds Transfer Payment Methods" as prescribed in 32.908(d) as revised.
Ill GENERAL
The EPA-EFT Payment Process is an electronic funds transfer process initiated by EPA in
response to the Debt Collection Improvement Act of 1996. P.L. 104-134, that requires all federal
payments be made via Direct Deposit/Electronic Funds Transfer(DD/EFT).
Using the EPA-EFT Payment Process, the recipient submits a "U.S. EPA Payment Request"
(provided by EPA) via fax to the Las Vegas Finance Center (LVFC).
LVFC will review each request. When the request is approved for payment. EPA will electronically
transfer funds through the U.S. Department of Treasury and the Federal Reserve for credit to the
recipient's account at their designated financial institution, usually within 48 hours following receipt
and approval of the request. If the entire request or a portion of the request is rejected, the
recipient will be notified by LVFC no later than one workday following receipt of the request
IV ENROLLMENT PROCESS FOR THE EPA-EFT PAYMENT SYSTEM
A. The recipient organization must complete the ACH Vendor/Miscellaneous Payment
Enrollment Form (SF 3881) The recipient will send the completed SF 3881 to LVFC.
See Exhibit A for additional instructions for completing the form
B. LVFC receives and reviews the completed SF 3881 form for accuracy, and will enter the
enrollment information into its vendor database for assistance agreements
C. LVFC will provide the recipient with a letter assigning them an EFT Control Number and
the necessary forms for requesting funds and reporting purposes.
V PROCEDURES FOR REQUESTING FUNDS
Once EFT enrollment is complete and the Assistance Agreement has been signed as accepted by
the recipient organization and sent back to the grant specialist, recipients may begin requesting
funds based on their immediate disbursement requirements.
A. Preparation of U.S. EPA Payment Request
1 All payment requests must include the EFT Control Number provided by LVFC.
2 Payment Requests cannot exceed authorized amounts for each individual
assistance agreement. Recipients should refer to individual assistance
-------
agreements for any additional terms and conditions applicable when requesting
funds from EPA (i e., LUST. Site Specific Superfund, etc). Recipients who
receive assistance agreements from EPA's Superfund program must also include
the Site Specific Superfund Account Number in the Account Number/Activity
Code field See Exhibit B for specific instructions on CDrroleting th? forrp
B. Submitting the U.S. EPA Payment Request to EPA
The U.S. EPA Payment Request should be faxed to 702-798-2423 as early in the day as
possible to allow for timely processing
C. Review of EFT Payment Request
Upon receipt of the payment request, LVFC will review the request to determine if.
Funds drawn are being used within an authorized budget period
The EFT Control Number is correct
The recipient name is correct
Assistance Agreement numbers are correct and sufficient funds are available
All required expenditure or program reports have been received
Cash on hand (COM) is not excessive(see Section VI - Cash Management
Requirements); and
U S. EPA Payment Request is signed
Approved Payment Request
Payments approved by LVFC are transmitted to the recipient's fi^^^":?l i-sii'jt'c" js^s-liy
within 48 hours following the approval. When the recipient's financial tr.sli'.uu&n i^e.ves
the funds, they will provide the recipient with notice of credit and/or "addenda/remittance"
information. If the addenda/remittance information has not been received on the
anticipated payment date, the recipient organization should contact its financ.:.' inr'.it.iior
to determine if an EPA payment was received If a payment was not received, the
recipient organization should notify LVFC immediately so that appropriate action may be
taken.
Rejection or Modification of the U S.EPA Payment Request
Under the EPA-EFT Payment Process, all or part of a request may be approved for
payment. If a request is modified or rejected, LVFC will immediately notify the recipient
via fax or e-mail
VI
CASH MANAGEMENT REQUIREMENTS
The EPA-EFT Payment Process is designed to provide federal funiJs tc-:. -•--.
generally within 48 hours following LVFC approval of the U.S. EPA Pay- er.:
the recipient organization should request funds based on immediate c .>:.*_'?.
only, and should disburse funds as soon as possible to minimize the r^
accordance with policies established in Treasury Department Circular 1 :> • =
from the Treasury for Advances under Federal Grant and Other Prtr.rL.rr:.'
payment requests to ensure that recipient organizations are maintar-.c ~
Federal funds Each payment request will be reviewed by EPA pn;,; ;o rps .:
payment will not result in excessive funds on hand or violation of award £j;:.
;=.,_..
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VII FINANCIAL STATUS REPORTING
A Recipient's Responsibilities and Records.
Recipients of Federal funds under EPA assistance agreements are responsible for
providing EPA with financial reports. Records must be maintained to satisfy the
particular requirements of the programs under which the Assistance Agreement was
awarded. Under the EPA-EFT Payment Process, such records must enable EPA to
ascertain that the cash requests are directly related to and closely timed to the actual
disbursement needs for liabilities involving EPA supported projects. Moreover, the
records must have the capability of providing information as to the Federal share of
accrued costs. Copies of the following Financial Reports can be retrieved from the
following web-site- www.whitehouse.oov/omb/qrants/ffforms.
B Required Reports
1. Financial Status Report, SF269 (long form) or SF269A (short form). A final
SF269 or SF269A (see Exhibit C for samples and instructions) report must be
submitted within 90 days after the budget period end date. The report must be
prepared in accordance with the instructions on the reverse thereof, and
forwarded to the Las Vegas Finance Center, PO Box 98515, Las Vegas NV
89193-8515 or faxed to 702-798-2423
Generally applicable reporting requirements may be found in the Code of Federal
Regulations (CFR's), for example:
State/Local Governments and Indian Tribes, see 40 CFR Part 31
Recipients other than State/Local Governments, such as Universities,
etc., see 40 CFR Part 30
Cooperative Agreements for Superfund State Contracts for Superfund
Response Action, see 40 CFR Part 35 Subpart O
In addition, recipients should consult the terms and conditions of their assistance
agreements for additional reporting requirements
Recipients may elect to use the SF-269 or the SF-269A that best meets the
needs of the reporting requirements stated in the EPA assistance agreement or
as stated in the CFR's.
2. Federal Cash Transactions report, SF-272. This report must be submitted
semi-annually within 15 working days following the end of the semi-annual
periods ending June 30 and December 31 of each year. The report will be
prepared in accordance with the instructions on the reverse thereof, and
submitted to LVFC. The SF 272 and instructions on its preparation are conU.'r.i:
in Exhibit D. Recipients should consult the terms and conditions of their
assistance agreements for any additional reporting requirements and time frames
for submission.
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EXHIBIT A
ACH VENDOR/MISCELLANEOUS PAYMENT
ENROLLMENT FORM
ACH VENDOR/MISCELLANEOUS PAYMENT
ENROLLMENT FORM
OMB No. 1S10-OOSS
Exnrjuon Dili; 06/30/93
This form is used for Automated Clearing house (ACH) payments with an addendum record that contains payment-
related information processed through the Vendor Express Program Recipients of these payments sfioula bring
this information to the attention of their financial institution wnen presenting this form for completion
PRIVACY ACT STATEMENT
The following information is provided to comely with the Privacy Act of 1974 (P L. 93—579) All infor-
mation collected on this form is required under the provisions or 31 U S.C. 3322 and 31 CFR 210 This
information will be used by the Treasury Department to transmit payment data, by electronic means to
vendor's financial institution. Failure to provide the requested information may delay or prevent the
receipt of payments through the Automated Clearing House Payment System.
AGENCY INFORMATION
FEDERAL PROGRAM ACCNCV
AGENCY IDENTIFIER
ACCNCV LOCATION COOC (ALC) ACH F
DC
'OR MA-
CD' DcTX OcTP
AOORGSS.
CONTACT PERSON NAME
i _^
TELEPHONE NUMBER
ADDITIONAL. INFORMATION
PAYEE/COMPANY INFORMATION
NAME
SSN NO OR TAXPAYER ID NO.
Aooness
« i
CONTACT PERSON NAME-
TELEPHONE NUMBER.
( )
FINANCIAL INSTITUTION INFORMATION
AOORCSS.
ACH COORDINATOR NAME.
TELEPHONE NUMBER
( I
NINE-DIGIT ROUTING TRANSIT NUMBER.
DEPOSITOR ACCOUNT TITLE.
DEPOSITOR ACCOUNT NUMBER.
LOCKOOX NUMOCR.
TVPE Of ACCOUNT.
CD CHECKING
GSAVINCS
OlOCKBOK
SICNATURC AND TITLE OF AUTHORIZED OFFICIAL.
iCouln 9c ine ume » ACH Caorainjlor)
TELEPHONE NUMBER
( I
V Illl IBr. I.TMI
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EXIHIBTT A - CONTINUED ACH VENDOR/MISCELLANEOUS
PAYMENT ENTROLLMENT FORM INSTRUCTIONS
GENERAL ENROLLMENT PROCEDURES
The recipient must provide the information requested in the Payee/Company Information sectior, '. .
recipient will then have its Financial Institution (Fl) complete and sign the Fl portion of the form Either
the recipient and/or the Fl must return the SF 3881 to the EPA address provided in the Agency
Information section.
INSTRUCTIONS FOR COMPLETING SF 3881 PAYMENT INFORMATION ENROLLMENT FORM:
1 AGENCY INFORMATION (To be completed by EPA)
The name and address of the EPA location responsible for issuing the payment as well as the
name of a contact person and telephone number.
2 PAYEE/COMPANY INFORMATION (To be completed by the grant recipient)
Print or type the name of the recipient organization or institution that will receive the funds. (The
name and address should correspond to the name and address as it appears on the assistance
agreement with EPA.) The recipient contact person and telephone number must also be
provided.
3 EMPLOYER'S IDENTIFICATION NUMBER (EIN/SSN) - Enter the EIN of the recipient
organization's office in the space provided, or a Social Security Number (SSN) for individuals
who have agreements with EPA. Only one EIN/SSN should be provided. The EIN or SSN is
required before any payments can be deposited into the recipient's account.
4 FINANCIAL INSTITUTION INFORMATION (To be completed by your Fl)
Type or print the name and address of the Fl and the name and phone number of the Fl
ACH/Direct Deposit Coordinator.
a) Type or print the Nine-Digit Routing Transit Number (RTN). If the Fl uses a processor.
the RTN of the Fl should be used. The importance of the correct RTN cannot be
overemphasized.
b) The Depositor Account Title is the legal name of the bank account holder. This cannot
exceed 22 characters.
c) Type or print the number of the account into which funds are to be deposited. If the Fl
does not use account numbers, up to seventeen (17) characters of the depositor's name
or other identification may be entered in this block. The depositor's account numbs:
must be formatted EXACTLY as it appears in the Fl's records.
d) Check type of-account "Checking' or "Savings'. In some cases. FIs act as agents for
the Government and the accounts are neither checking nor savings accounts. In these
instances, the account may be a trust, general ledger, or reserve account When this is
the case the Fl should be given explicit instructions to always use "checking' account or
"savings' account with a unique prefix or alpha character included in the depositor's
account number to immediately identify the payment
e) The Fl's representative signs the form and provides a telephone number for contact
purposes.
-------
5. DISTRIBUTION
A copy of the SF 3881 form must be returned to LVFC. The recipient and the recipient's
financial institution may keep copies of the SF 3881.
6. ERRORS OR OMISSIONS
Any SF 3881 that cannot be processed because of errors or omissions will be returned to the
recipient with a letter identifying the errors and requesting corrections. If timing is critical, some
corrections may be handled over the telephone with a written confirmation.
-------
U.S. EPA PAYMENT REQUEST
Recipient Name
Fax #:
EFT#
Assistance Agreement
Contact Person.
Phone It:
Email address-
Request #
( Account No/Actlvlly Code ' •
' (Siiperfui)cl Site Specific)' .
-
Cash on Hand $
ft t ' *
°- ' $ Amount '
TOTAL AMOUNT REQUESTED $
Mark
(xj|f
Credit
* ' • '",•
' 1 I i
!. ,.'• '
For EPA Internal Use Only
5
3
C
m
in
s
. cwl
and that all outlays were made In accordance with the grant conditions or other
agreement and that payment is due and has nol been previously requested
APPROVALS:
Recipient Approving Official's Signature
Date Approved
EPA Certifying Officer
Dale Approved
i.
EPA APPROVED AMOUNT
For EPA Use O-iiy
-------
U.S. EPA PAYMENT REQUEST
Continuation Form
EFT#
Assistance Agreement
•
•
Request It
Account No/Activity Code
(Suporfunil Site Specific)
$ Amount
Mark
(X| II
Credit
For EPA Internal Use Only
i
s
TJ
5
IB
»s
O tn
o
Puga of.
-------
EXHIBIT B - CONTINUED
EPA-ACH PAYMENT REQUEST INSTRUCTIONS
3.
4.
5.
6.
7.
8.
10.
11.
Recipient Name:
Contact Person-
Email address
Phone*:
Fax#:
EFT#:
Request #:
Cash on Hand-
Assistance
Agreement.
Account Number/
Activity Code:
$ Amount
12. Mark (X) if Credit-
Enter the recipient name exactly as stated on your EPA Assistance
Agreement/Amendment
-Enter the name of a person to contact to resolve any problems OP '..-. r
request
Enter email address of contact person.
Enter a telephone number for the contact person.
Enter the recipient organization's fax number.
Enter the EFT Control Number that has been assigned by EPA.
Enter the number assigned to this request. The requests are to be
numbered consecutively starting with 0001. If a request is rejected the
number will not be reused The next request is assigned the next
consecutive number.
Enter the total amount of unspent EPA cash currently in your bank
account at the time of submission of the request. If you are requesting
reimbursement, the cash on hand should represent the deficit amount as
a negative figure
Enter the assistance agreement as indicated on your Assistance
Agreement document.
The account number/activity code block is only used by recipients
receiving assistance on special projects such as: LUST, Superfund,
Endangered Species, or Pesticide Control. Recipients should consult
their assistance agreement for specific requirements to be used in this
section.
Enter the dollar amount requested for each assistance agreement. The
sum of all dollar amounts must equal the total amount requested If
additional space is required for requesting funds, the U.S. EPA Payment
Request Continuation Form should be used.
This item can be used to return funds on any active Assistance
Agreement In the case of an overdraw of funds or funds owed bad'':
the EPA, funds may be returned via the EFT Payment Process. Fi:r..
keep in mind that the payment request form must net to a positive
request amount. Therefore, funds must be requested on at least era
other assistance agreement that will result in a requested amount of at
least $1. If refunds do not qualify for return on the payment request, then
a check should be sent to:
US Environmental Protection Agency
Financial Management Center
POBox371293M
Pittsburgh, PA 15251
13. For EPA Use Only: This block is reserved for EPA use. .
-------
14.
Total Amount
Requested
Enter the total dollar amount of federal funds requested
15 Recipient Approving
Official's Signature
15.
16.
17.
18.
Date Approved
EPA Certifying
Officer Approval.
Date Approved
EPA Approved
Amount
This signature must be an authorized representative of the recipient
organization For International recipients, the rs2u2ct z'-.zM be s'C'-'.oi
by an authorized representative who has authority for making finarioial
decisions with the organization
Enter the date the request is signed by the recipient's approving official.
This block is reserved for EPA use.
This block is reserved for EPA use.
This block is reserved for EPA use.
NOTE: Failure to complete the required data may result in your payment request being rejected or
modified.
-------
EXHIBIT C
SF269 FINANCIAL STATUS REPORT
FINANCIAL STATUS REPORT
(Long form}
fTriflnw instructions on the oackl
M t..v».« ««••»* jnn I «'|Jnu jmiu r rapt. . H
l r. Vihmmrfl I Br Fi-orr.ll Aomcv
OMBAcvnaiu
No
0348-0039
I' 13 •
hV.4jMI(«qmMmi (NjifV .Illd iwnplrti- Jtltlirv. nckjdiK) W on*)
I mtUovr. UnttbUtnn NUITO-I
'i Kn.u>-niAcuiunlNunibnoiktpnlfyiiqNiimorr
6 FnilRruwt
Q Yu Q No
f ran (Monm Ujy Vrail
lo (Uonft Ojy You)
t RfHunos iroj(e&
7 Daw
Q Cilh n Accnul
(•rom (Monm Day Year)
To (Manm Oar
d Net auttJm (tm^ J **-U ffir u«n a/ (mea 6 jntf CJ
Rrcipirnrs sl"re *» nri auttors. eaosKlinq of
TNia pj«v (in kind) conmbuliniK
PraqnniincnncuardinaconnunorwilhUiriiianlmioroou
n ASoOit-r icapwrt autuyi no: sJwwn on b«s e 'o»s
Total n-c«i>^il
« nn ouday& < iom o/ tows e / c jno* n;
Feoml dm o< M omurs rtiv a leu t
m f-eorral Dnrr rt v
Total Pcaml funds aumoninl taf ME kindn) pnad
UnoBhaaml tbrfjnce of l-rdpnl lundi (Une o imnii tor a)
pnqnin incme. cansalnig at-
a Daourerdj
i OSDUTSM pnqnm ncamr usnq Die l
5 Undsbuncapraqn
L Tool program ncome reateed rSom
-------
EXHIBIT C-CONT1NUED
SF269 INSTRUCTIONS
FINANCIAL STATUS REPORT
(Long Form)
Pubtt irnttnq i.nnrn in im cnuxaon tu imnubon n eiamaird u average 10 mrotci per irunree nducwig wnr toe rrammg murucMns
Marchrai rinlnq dau louirrt gammnij jnd maManmg the data nrerted ana CBmpb-ung and irvwwing the coltecMn ctf mfonnaicn Send commrnis
iKHion, lh* bum™ ntnulr o any dti-r awm tf BIB iMMun o( rtwrnxoi «cuuig uqoruons IB irduonq Bio. UunMn In Bit: Otlce ol
Uwuonwni and RwlqH IMrrnvw" Rraiiclai Prercl (OM8A!I91 Wjmngun OC ?OM3
PLEASE DO NOT RETURN YOUR COMPLETED FORM TO THE OFFICE OF MANAGEMENT AND
BUDGET.
Ploasu type ot piml fcgibly The following general mstruction:. explain how to use the form itself You may need additional
information la complete certain items correctly or to decide whether a specnic item is applicable to this award Usually.
such mtomiatraii will bo lound 11 the federal agency1:, grant regulation:, or n the terms and conditions of the award (e g .
how to calculate the Federal share, the peimiisible uws. of program income. Ihe value of m-lund conmbutions. etc.) You
may also contact the federal agency diicctly
Hem
Entry
Hem
Entry
1. 2 and 3 Sell-explanatory
4 Enter the Qmpbyer Idcnnhcaucn Number (EIN)
assigned by the U S Iniemal Revenue Sennet
5 Space n-tervcd loi an accaunl number or othci
ncntityinq number assigned by UK recipient
6 Check yes only if this a the last report lor UK
period shown in item 8
7 Sell-explanatory
6 Unless you have received other oislnjctions front
the awaidaiq agency, enter the beginning and
ending datau of the current funding pcnod II the: is
a muSi-yuar program, the Federal agc-cy n-iqht
require cumulative reporting inreugn consecutive
lundmq period:, h that case, enter the beginning
and enoing dales of Ihe gram penod and n the resl
of these nsimeuans. substitute the tern 'gram
penod" lor "funding penod
9 Self-explanatory
1O The purpose ol columns. L a and 01 is to show the
effect ol this reporting period's transactions on
cumulative financial status The amounts entered in
column I win normally be the same as those n
cottnnp B of the previous report in me same
landing penod. > the s Ihe first or only report of
the funding penod. leave columns I and I blank t
you need lo adjust amounts entered on prewni'.
reports, footnote the column I entry on Uas report
and attach an explanation
10a Enter total grass program outlays Include
disbursements of cash realized as program income
if that ncorne will also be shown on knes 10c 01
lOg Do not include program income that wdl be
shown on fcnes IDr or 10s
For reports prepared on a cash basis outlays are
the sum of actual cash disbursements lor dracl
costs foi goods ana services the amount of indirect
expense charged tlw value ol m-knd eonuibutians
applied, and Ihe amount of cash advances and
payment! made lo subreopients For reports
prepared on an accrual base, outlays are the sum
ol actual cash disbursements for direct charges for
goods and services, the amount ol indirect expense
mcurred the value of m-tcind contributions applied
and the net increase or decrease n Ihe amounts
owed by the recipient for goods and other property
received, tor services performed by employees
contractors subgrantees and other payees and
other amounts becoming owed under programs for
which no current services or performances are
lemured. such as annuities nsurance claims ana
other benefit payments
lOb Enter nny receipt related lo outlays reported on the
lorn that arc being Irealeo as a reduction ol expenditure
ralhcr than income and were not already netted out ot
the amount shown as outlays on bnc 10a
IOC Cntcr the amount ol progmm income that was used in
accordance with the deduction alternative
Note Program ncome used n accordance with oilier
alternative* is entered on tines q. r. and s. Reopients
reporting on a cash b.isr, should enter the amoun' of
ca'.h ncomo received on an accrual IMMS. enier thi>
program income earned Program income niay (.. may
not have been included in an application budqcl and/or
a budget on the award document It actual income i-
from a different source or E vgnificantly different m
amount attach an explanation or use the remj:ta
section
lOd. c I g. h iand| Sen-explanatory
10k Enter me total amount of unliquidated obligations.
including unnqtudalcd obligation!, lo subgrantoes and
conimctors
Unliquidated obligations on a cash basis are oblignmns
incurred, but not yet pmd On an accrual boss, they arc
obligations incurred but lor which an outlay has not yet
been recorded
Do not include any amounts on line 10k thai hnvr been
included on lines IQa ana 10)
On Ihe hnal report fcne 10k mu.'.l be zero
101 Sdf-exptanalory
10m On the final report bnc 10m must also be 7*>ro
tOn o p. q r. s and t Sdf-explann •
11a Sell-explanatory
lib Enter the indirect cost rale in c''
penod
tic Enter the amount of Ihe bav . , ., .- V ..-
was applied
lid Enter the total amount of inoircc .. • r. . - •
Ihe report penod
lie Enter the Federal share ol Ihe a-n.u r .
Note It more thrni one rate was in effect durmr* the tfnod
shown in item 8 attach a schccV • • ~t,t-,* ' - • ?:•*
agamy which the different rates ^ •• .--; •. 'm-
respcane rales the calendai vs. t -e • • r
effect amounts ol indirect cipu-.... --^TIII: t VT
protect and Ihe Federal share of mdirea cxocnse
charged lo the protect 10 oaie
SF !GS B.I-* •"-• : «•-,
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EXHIBIT C - CONTINUED
SF269A FINANCIAL REPORT
FINANCIAL STATUS REPORT
(Short Form)
ff-olknv instructions on the back)
i i f eo»ral Agency .mu Oma-u.-aii KI.I' I H-im-nt
In X'.twch Rppurl i'. .
II' I cdural Gran; o: Other laoniirying Numbci Assigned
tly i Pdcral Agency
lOMBApprmo, . .
No !
0348-4038
o Recipient Organir.uian (N.imc ,md complete1 adriu::,:.. including 7IP code)
pants.
4 Employci Idcnlificjuon Numtin
5 Recipient Accounl Number or Identifying Number
8 F-undirig/Giant Period fSff tnvniclians)
From [Month. Day. Yc.ii)
To (Month. Day. Year)
10 Transactions1
6. Final Report
7. Basis
Cash Q Accrual
9 Penod Covered by this Report
From. (Month. Day. Year)
Previously
Reported
II
This
Period
To- (Month, Day. Year)
III
Cumulative
a. Total outlays
b. Recipient share ol outlays
c r-eooral share ol outlays
d Totai unliquidated obhuationr.
e Heopient share ol unhquidnled obligations
I. Federal share of unliquidated obligations
T- ,_^::,
g Total Federal store/Sum ol lines c ana f)
.' •- •-.
h Total Fcclctnl lund:: aullxinrcd tor Uvs landing pcnod
i Unobligated balance ol Federal tundfLinc h minus tote g)
11. Indirect
Expense
a. Type of Rate (Place 'X' m appropriate box)
O Provisional
Predetermined
b Rate
c. Base
[[] Final
Fixed
d. Total Amount
c. Federal Share
12. Remarks: Attach any exptomuons deemed necessary or information required oy Federal sponsoring agency in compliance mlh governing
legislation.
13. Certification: I certify to the best of my knowledge and belief thai this report is correct and complete and that all outlays and
unliquidated obligations are lor the purposes set forth in the award documents.
Typed or Pnnted Name arid Title
Telephone (Area code, number and extension)
Signature ol Authorized Certifying Official
Date Report Submitted
NSN7540-01-2l8-i387
263-302
Standard Form 259A (Rev. /-97)
Presented by OMB Circulars A-102 and A-111
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EXHIBITC - CONTINUED
SF269A INSTRUCTIONS
FINANCIAL STATUS REPORT
(SltartFem)
Public reporting burden lor ttii!. collodion ol information u, estimated in average90 minules per response, including lime lor reviewing instructions, searching
existing data sources, gathering and mamlaining Uxj data needed, and completing and reviewing Ihp collection ol information. Send comments icgaiding the
burden estimate or any other .isrjecl ol Ilii:. cnllecliun ol inlniin.iuon. inclunrig f.iggcitiorr. lor rcouong ihts burdcr. lo the Ollice ol Uaragemcnland Budoel
Paperwork Rcouciion Hioicct (0348-0038). Washington DC 20503
PLEASE DO NOT RETURN YOUR COMPLETED FORM TO THE OFFICE OF MANAGEMENT AND BUDGET.
SEND IT TO THE ADDRESS PROVIDED BY THE SPONSORING AGENCY.
Please type or print legibly. Ttiu following general instructions explain ho* to use the form itself You may need additional information to
complete certain items correctly, or to decide whether a specific item is applicable to this award. Usually, such information will be lound in
the Federal agency's grant regulations or in the terms and conditions of the award You may also contact the Federal agency directly.
Item
Enlry
Hern
Entry
1, 2 and 3. SeH-explanalory.
4 Enter the Employer Identification Number (EIN)
assigned by the U S. Internal Revenue Service
5 Space reserved for an account number or other
identifying number assigned by the recipient
6. Check yes only if this is the last report lot tho
period shown in item 8
7 Self-explanatory
8 Unless you have received other instructions From
the awarding agency, enter the beginning and
enoing dales of the current funding period. If this is
a multi-year program, the Federal agency might
require cumulative reporting through consecutive
funding penods. In that case, enter the beginning
and ending dates of (he grant period, and in the rest
of these instructions, substitute the term 'grant
penod' lor 'funding period.'
i
9. Self-explanatory
10. The purpose of columns I. II. and III is lo show the
effect of this reporting period's transactions on
cumulative financial status. The amounts entered in
column I will normally be the same as those in
column III of the previous report in the same
lundingpenod. If this is the first or only report of the
funding period, leave columns I and II blank. If you
need to ad|ust amounts entered on previous reports.
footnote the column I entry on this report and attach
an explanation
lOa Enter total program outlays less any rebates.
refunds, or other credits For reports prepared on a
cash basis, outlays are the sum of actual cash
disbursements for direct costs for goods and
services, the amount of indirect expense charged.
the value of in-kind contributions applied, and the
amount of cash advances and payments made lo
subrecipients For reports prepared on an accrual
basis, outlays are the sum of actual cash
disbursements for direct charges for goods and
services, the amount of indirect expense incurred.
•U S Governmoni Prang Office 1993 - 342-197,!BI2a3
the value of in-kind contributions applied, and the net
increase or decrease m the amounts owed by the recipient
for goods and other property received, for services
performed by employees, contractors, subgrantees and
other payees, and other amounts becoming owed under
programs for which no current services or performances are
required, such as annuities, insurance claims, and oilier
benefit payments
lOb Self-explanatory
lOc Self-explanatory.
10o Enter the total amount of unliquidated obligations,
including unliquidated obligations to suograntecc and
contractors
Unliquidated obligations on a cash basis are obligations
incurred, but not yet paid. On an accrual basis, they arc
obligations incurred, but for which an outlay has not yet
been recorded.
Do not include any amounts on line lOd that have been
included on lines 10a. b, or c.
On the final report, line 10d must be zero
lOe f. g, h, h and i. Self-explanatory.
11 a Self-explanatory
lib Enter the indirect cost rate in effect during the iry- •"
period.
11c Enter the amount 01 the base against which the .ate -.as
applied
11d Enter the total amount of indirect costs charged during the
report penod.
1'le Enter the Federal share of the amount in 11 d.
Note If more than one rate was in effect during the period shown
in item 8. attach a schedule showing the bases against
which the different rates were applied, ttie respective rates.
the calendar penods they were in effect, amounts of indirect
expense charged to the project, and the Federal share of
indirect expense charged lo the project to date.
SF-269A (Rev 7-37) Bjck
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EXHIBIT D
FEDERAL CASH TRANSACTION'S REPORT (SF272)
FEDERAL CASH TRANSACTIONS REPORT
(See instnicaons on Hie back 1! rrpon is lor more man one nrani m
assistance agreement, attach completed St.inrJarti Form 277.A.)
2. REaPIEHT ORGANIZATION
Name:
Number
and Street
City. Stats
and ZIP Code.
3. FEDERAL EMPLOYER
IDENTIFICATION NO.
11. STATUS OF
FEDERAL
CASH
(See specific
instructions
on the back)
*12. THE AMOUNT SHOWN
ON LINE 11|. ABOVE.
REPRESENTS CASH RE-
QUIREMENTS FOR THE
ENSUING
Days
OMB APPROVAL NO. 034B-O003
1 Federal mnumng agency and oiqanualnnal etancnl to wttoi the rrpan
a uxmimrd
4 rcdcrai gun or own ncnittcaicn
numbe!
G Lener ol crafet numoei
5 RFCKMIII'I accouii numbr* 01
Kh-nnlvuig nummt
7 U« paymml voocnri numlKr
Give total number tor this period
iniracEounl
9. Tieaswy cncoa nxomx) (win-out
ornaarpooeai
10. PERIOD COVERED BY THIS REPORT
FROM (month ttoy. ycmrl
a. Cash on hand beginning ol reporting period
b. Letter ol credit withdrawals
c. Treasury check payments
d. Total receipts (Sum ol linos b and c)
c. Total cash available (Sum ol linos a and d)
f. Gross disbursements
g. Federal share of program income
h. Net disbursements (Unet minus tine gj
\. Adjustments of prior periods
j. Cash on hand end of period
TO {month oar purl
s
s
13. ^ OTHER INFORMATION
a. Interest income
b. Advances to subgrantees or subcontractors
s
s
14. REMARKS (Attach additional sheets ot plain paper, if more space is required)
IS.
CERIF1CAT1ON
1 certify lo Ihe best o» my
Knowledge and belief that this
report is true in all respects and
that an disbursements have
been nude lor Ihe purpose and
conditions of Ihe grant or
agreement.
AUTHORIZED
CERTIFYING
OFFICIAL
SIGNATURE
TYPED OR PRINTED NAME AND TITLE
DATE REPORT SUBMITTED
TELEPHONE (Area Cooti.
Number. Extension)
THIS SPACE FOR AGENCY USE
HSN 754O-01-O16-M34
272-101
STANDARD FORM 272 (flf* 7.97)
PrexeMM «r OMB Circulars A-IO2 md »-l 10
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EXHIBIT D -CONTINUED
SF272 INSTRUCTIONS
PURPOSE ^^C^nsadtons Report ,s used to routmely monitor cash management on
1 . Federal sponsoring agency should be U.S Environmental Protection Agency.
2. Your organization name and address
3. Your Employer Identification Number.
4 If i reporting on a single grant, indicate grant number If recip,ent has multiple grants an SF -372 A
should be prepared and this block marked "see attached"
records that c°inc^ with the
6 EPA assigned EFT number
7 Las t payment request number used for period covered on this report.
8 Number of requests that were credited to your account.
9 Number of Treasury checks received, if applicable
10. This is the period covered by this report; should be Jan 01 . thru Jun 30. OR July 01 thru Dec 31
1 1 a Cash on hand at the beginning of the period should be the same as 1 1 j on previous
re ort SUbmitted °r am°unt of unsPent EPA funds in bank at beginning of period if first
b. Enter total amount of EFT withdrawals for the period.
c. Amount of treasury checks received
d Sum of lines 11b and 11c
e Sum of lines 11a and 1ld.
f Total amount funds disbursed by your organization in the period covered by this report.
g. Enter amount of any earned income on federal funds during the semi-annual period.
h. Line 1lf minus line 11g
i Use this block to make any adjustments/corrections to any reports previously .sent
j Line 1 1d minus line 1 1h plus or minus line 1 1i If the result is a positive number Block
12 must be completed. '
12. Enter amount of days cash on hand at the end of the period
1 3 Enter amount of any interest earned on federal funds.
14. Enter amount of any advances given to subgrantees and subcontractors.
1 5 Enter any comments or explanations for any adjustments/corrections to this report
1 6 Signature of certifying official and date
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EXHIBIT E-CONTINUED
FEDERAL CASH TRANSACTION'S REPORT - CONTINUATION (SF272A)
FEDERAL CASH TRANSACTIONS REPORT
CONTINUATION
fjh,s form ,s completed and aaaehua to Standard Form 273 on,y whan reportm
mo'e tnan "rig ffranf 01 assistance agreement)
TO (month. day. year)
IDENTIFICATION NUMBER
(Sttow a subdivision by otliei
identifying numbers it required ly ttie
Federal Sponsoring Agency-)
(a)
FEDERAL SHARE OF NET DISBURSEMENTS
NET DISBURSEMENTS (Crols
disbursements less program income
received) FOR REPORTING PERIOD
OR OTHER
IDENTIFYING NUMBER
CUMULATIVE
NET DISBURSEMENTS
TOTALS (Sliould correspond with amounts shown on SF 272 as follows
column (c) the same as line / 1h; column (d) the sum of lines tlhandll,
of lie SF -272 and cumulative disbursements shown on lasi report. Attach
explanation of any differences )
PU&I.C reponing burden lor in.s coUecl.on of .nlormaton s eshmated to average 120 mmules per response mcluri-nn 11 r
ex-s.^.a^urces.ga.henngand™^^^
esnmateor any other aspec! ol lh» co..ec.«no( mformaUon. .ndod-ng suggesfons hr^to te^STS £^ , ^ndcon"nentsre9a«""9the bu^cr
Rcductton ProKJcl (0348-0003). Washington. DC 20503. 93*-»°ns wr reouang this burden, lo Ihe Office ol Managemenland Budget. Pauerwort
PLEASE DO NOT RETURN YOUR COMPLETED .FORM TO THE OFFICE OF MANAGEMENT AND BlinrPT
SEND tT TO THE ADDRESS PROVIDED BY THE SPONSORING AGENCY. MANAGEMENT AND BUDGET-
AUTHORIZED FOR LOCAL REPRODUCTION
Previous Edition Usable
272-203
STANDARD FORM 272A (Rev. 7-97)
Prescribed by OMB Circulars A-102 and A-110
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EXHIBIT E - CONTINUED
SF272A INSTRUCTIONS
The SF-272A is to be completed and attached to the SF-272 when reporting on more than one EPA
Assistance Agreement (grant)
Column A is to show the EPA Assistance Agreement number for each agreement for which there were
disbursements and/or adjustments made during the reporting period
Column B is for the recipient organization's use in listing their account, reference, or other identifying
numbers for each EPA Assistance agreement
Column C and D are to show the net disbursements and the cumulative net disbursement for only those
agreements for which there were disbursements and/or adjustments made dunng the reporting period.
-------
U.S. EPA PAYMENT REQUEST
Recipient Name:
Fax#:
EFT#
Assistance Agreement
Contact Person:
Phone #:
Email address:
Request #
Account No/Activity Code
(Superfund Site Specific)
Cash on Hand: $
$ Amount
TOTAL AMOUNT REQUESTED $
Mark
(X)lf
Credit
For EPA Internal Use Only
certify that to the best of my knowledge and belief the data above are correct
and that all outlays were made in accordance with the grant conditions or other
agreement and that payment is due and has not been previously requested.
APPROVALS:
Recipient Approving Official's Signat'no
Date Approved
EPA Certifying OfiicT Anproval
Date Approved
EPA API '".OVED AMOUNT
For >.: A Use Only
-------
FEDERAL CASH TRANSACTIONS REPORT
(See instructions oil the back. If report is tor moic than one grant or
assistance agreement, attacti completed Standard Fomi 272A.)
2. RECIPIENT ORGANIZATION
Name'
Number
and Street-
City, State
and ZIP Code:
3. FEDERAL EMPLOYER
IDENTIFICATION NO.
11. STATUS OF
FEDERAL
CASH
(See specific
instructions
on the back)
12. THE AMOUNT SHOWN
ON UNE 11j, ABOVE.
REPRESENTS CASH RE-
QUIREMENTS FOR THE
ENSUING
Days
OMB APPROVAL NO. 0348-0003
t Federal sponsoring agency and organizational element 10 «t«cft (his rcpon
ts submitted
rumour
C Lcnei at credit number
b nraumfsi account mimtxM o>
idontifymq nunioui
7 Last payment voucher numbri
Give total number for this period
8 Payment Vouchers credited to
your account
9 Treasury checks received (whether
or ml demoted)
10. PERIOD COVERED BY THIS REPORT
FROM (month, djy, year)
a. Cash on hand beginning of reporting period
b. Letter of credit withdrawls
c. Treasury check payments
d. Total receipts (Sum ol lines b and c)
e. Total cash available (Sum ot lines a and d)
f. Gross disbursements
g. Federal share of program income
h. Net disbursements (Line t minus line g)
I. Adjustments of prior periods
). Cash on hand end of period
TO fmonlh. dj/. year)
s
$
13. OTHER INFORMATION
a. Interest income
b. Advances to subgrantees or subcontractors
s
$
14. REMARKS (Attach additional sheets of plain paper, if more space is required)
15.
CERIFICATION
I certify to the best of my
knowledge and belief that this
report is true in all respects and
that aO disbursements have
been made for the purpose and
conditions of the grant or
3QrGCfTlB lit.
AUTHORIZED
CERTIFYING
OFFICIAL
SIGNATURE
TYPED OR PRINTED NAME AND TITLE
DATE REPORT SUBMITTED
TELEPHONE (Area Code.
Number. Extension)
THIS SPACE FOR AGENCY USE
NSN 7S40-O1-O1B-54M
272-103
STANDARD FORM Z72 (Hoy. 747)
Prescribed by OMB Circulars A-102 >nd A-110
-------
SF272 INSTRUCTIONS
PURPOSE: The Federal Cash Transactions Report is used to routinely monitor cash management on
a semi-annual basis.
1. Federal sponsoring agency should be U.S. Environmental Protection Agency.
2. Your organization name and address
3. Your Employer Identification Number.
4. If reporting on a single grant, indicate grant number. If recipient has multiple grants, an SF 272 A
should be prepared and this block marked "see attached".
5 Complete if your organization is using a different number for internal records that coincide with the
EPA assigned number.
6. EPA assigned EFT number
7. Las t payment request number used for period covered on this report.
8. Number of requests that were credited to your account.
9. Number of Treasury checks received, if applicable
10. This is the period covered by this report; should be Jan 01, thru Jun 30, OR July 01 thru Dec 31,
11 a Cash on hand at the beginning of the period should be the same as 11 j on previous
SF272 submitted or amount of unspent EPA funds in bank at beginning of period if fieri
report.
b. Enter total amount of EFT withdrawals for the period
c Amount of treasury checks received.
d. Sum of lines 11 b and 11 c.
e Sum of lines 11a and 11d.
f. Total amount funds disbursed by your organization in the period covered by this reoc"t
g. Enter amount of any earned income on federal funds during the semi-annual penod.
h. Line 11 f minus line 11 g
i Use this bloc!: to make any adjustments/corrections to any reports prev/: ..s i -. ••
j. Line 11d minus line 11h plus or minus line 11i. If the result is a positive ,•„ ._•...-. i :-..
12 must be completed.
12. Enter amount of days cash on hand at the end of the penod.
13. Enter amount of any interest earned on federal funds.
14. Enter amount of any advances given to subgrantees and subcontractors.
15. Enter any comments or explanations for any adjustments/corrections to this report.
16. Signature of certifying official and date.
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Competition - Policy for Competition in Assistance Agreements: 5700.5
Page 1 of 17
Policy for Competition in Assistance
Agreements: 5700.5
Competition Advocate
Home
The Competition Path
Open Competition
Managed Competition
Simplified Competition
Current RFAs/RFIPs
Approved Exemptions
due to Urgency. Security,
or Public Interest
Competition Guides
References
Classification No.: 5700.5
Approval Date: 09/12/2002
1. PURPOSE.
GAD Intranet
Home
This Order establishes Environmental Protection
Agency (EPA) policy for competition in the award of
EPA assistance agreements.
2. AUTHORITY.
The authority for this Order is the Federal Grant and
Cooperative Agreement Act of 1977, as amended,
31 U.S.C. 6301(3).
1 3. EFFECTIVE DATE.
This Order is effective for new assistance
agreements and monetary amendments awarded
after September 30, 2002.
4. POLICY.
It is EPA policy to promote competition in the award
of assistance agreements to the maximum extent
practicable. When assistance agreements are
awarded competitively, it is EPA policy that the
competitive process be fair and open and that no
applicant receive an unfair competitive advantage.
5. DEFINITIONS.
a. For purposes of this policy, the term "assistance
program" means a group of two or more assistance
agreements developed by a Headquarters or
Regional Program Office to address common
environmental objectives. Examples which illustrate
the meaning of the term "common environmental
objectives" include air pollution control modeling or
monitoring; non-point source water pollution studies;
and hazardous waste control surveys or evaluations.
http://intranet.epa.gov/ogd/compet/order.htm
7/10/2003
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Competition - Policy for Competition in Assistance Agreements: 5700.5 Page 2 of 17
b. The term funds available for award(s)" refers to
the total amount of money that a Program Office has
allocated to carry out: (1) an assistance program; or
(2) an individual project that is not part of an
assistance program. If a project is incrementally
funded, "funds available for award" refers to the total
amount for which the award is approved.
c. The term "Requests for Applications" (RFA) „
means an announcement that informs the public or
appropriate potential applicants of an assistance
agreement competition and invites the submission of
applications by either a set date or on an ongoing
basis.
d. The term "Requests for Initial Proposals" (RFIP)
means an announcement that informs the public or
appropriate potential applicants of an assistance
agreement competition consisting of: (1) the
submission of brief initial proposals; (2) selection by
the Agency of applicants whose initial proposals
merit further consideration; (3) submission of
detailed final proposals by the selected applicants;
and (4) final selection of applicants to receive
awards.
e. The term "Competition Threshold" means the
dollar level above which competition is required. For
FY 2003 and 2004 the competition threshold is
$75.000. Based on an assessment of the impact of
this Order on the Agency, the Assistant
Administrator for Administration and Resources
Management (OARM) will determine the competition
threshold for subsequent fiscal years. When the
funds available for award are less than the
competition threshold, competition is encouraged.
but not required (see Section 10.b.)
f. The term "Lead Agency Program Official" means
the Assistant Administrator, Regional Administrator.
or for purposes of the Office of the Administrator, the
Deputy Chief of Staff, responsible for an assistance
program or individual award.
g. The term "Grants Competition Advocate" means
the official responsible for overseeing
implementation of and compliance with the
requirements of this Order (see section 13.)
h. The term "Notice of Availability" means an
announcement summarizing an RFA or RFIP and
explaining to prospective applicants where or how to
obtain a complete RFA or RFIP.
6. APPLICABILITY.
a. Except as provided in paragraph b., the
competition requirements of this Order apply to all
http://intranet.epa.gov/ogd/compet/OFder.htan 7/10/2003
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Competition - Policy for Competition in Assistance Agreements: 5700.5 Page 3 of 17
EPA assistance programs and each assistance
agreement where the funds available for award(s)
exceed the competition threshold. This includes
awards for the following activities:
(1) Surveys;
(2) Studies;
(3) Investigations;
(4) Demonstrations;
(5) Research;
(6) Training;
(7) Fellowships;
(8) Environmental Education;
(9) Special Projects;
(10) Technical Assistance; and
(11) Environmental Programs.
b. The competition requirements of this Order do not
apply to:
(1) Assistance awards to State,
interstate, and local agencies and, if
applicable, Tribes and Intertribal
consortia under the following
programs: Programs subject to 40 CFR
Part 35. including direct assistance
awards from the State Revolving
Funds for the District of Columbia, the
Territories, excluding Puerto Rico;
Wastewater Operator Training grants
under section 104(g)(1). Chesapeake
Bay Agreement management
mechanism implementation and
ecosystem monitoring under section
117(e), and BEACH grants under
Section 406 of the Clean Water Act;
Expense Reimbursement grants under
Section 300g-8 (d) of the Safe Drinking
Water Act; Leaking Underground
Storage Tank Trust Fund Cooperative
Agreements; Oil Spill Trust Fund
grants; Clean Air Act Section 103
Grants for PM2.5 Monitoring Network
grants, National Air Toxins Monitoring
Pilots, and Regional Haze Programs;
Interstate Commission grants under
Section 106 of the Clean Air Act; and
http://intranet.epa.gov/ogbVconipet/order.htm 7/10/2003
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Competition - Policy for Competition in Assistance Agreements: 5700.5 Page 4 of 17
State and Tribal response program
grants under Section 128(a) of the
Comprehensive Environmental
Response, Compensation, and Liability
Act.
(2) Other programs available only to
Indian Tribes and Intertribal Consortia.
(3) Technical Assistance Grants under
40 CFR Part 35, Subpart M, and any
other programs that have standards
and procedures for competition
established by regulation or rule.
(4) Congressional earmarks to
identified recipients (assistance
agreements awarded in response to an
action from Congress or a
Congressional Committee as reflected
in appropriation or authorizing
legislation or applicable legislative
history).
(5) Senior Environmental Employment
Program Cooperative Agreements.
(6) Assistance awards to Foreign
Governments and to United Nations
agencies and similar International
Organizations, such as the
Organization of American States and
Organization for Economic
Cooperation and Development
(OECD).
(7) Other assistance programs, if
approved by the Assistant
Administrator for OARM. The Lead
Agency Program Official must submit
the request for an exemption in writing
to the Grants Competition Advocate
who will forward a recommended
decision to the Assistant Administrator
for OARM. Final decisions of the
Assistant Administrator for OARM will
be in writing and the Grants
Competition Advocate will post them
on the grant competition web site.
c. If a Headquarters or Regional Program Office
conducts competitions for programs that are exempt
under paragraph b., it must do so in a manner
consistent with this Order.
7. NON-COMPETITIVE JUSTIFICATION FOR ASSISTANCE
PROGRAMS.
http://intranet.epa.gov/ogd/compet/order.htm 7/10/2003
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Competition - Policy for Competition in Assistance Agreements: 5700.5 Page 5 of 17
a. A Headquarters or Regional Program Office may
request that an assistance program otherwise
covered by this Order be exempted on one or more
of the following grounds:
(1) unusual and compelling urgency;
(2) the interests of national security: or
(3) competition is not in the public
interest.
b. The Lead Agency Program Official must submit
the request in writing to the Grants Competition
Advocate, who will forward a recommended decision
to the Assistant Administrator for OARM. The Grants
Competition Advocate will post final decisions by the
AA for OARM on the grants competition web site.
Approved exemptions must be referenced in the
decision memoranda for all awards under the
program.
8. MON-COMPETITIVE JUSTIFICATION FOR INDIVIDUAL
AWARDS.
a. For an individual award that is not part of an
assistance program (see section 5.a.), a
Headquarters or Regional Program Office may
award an assistance agreement non-competitively
only if one or more of the following criteria are met:
(1) The EPA funds available for the
award are less than or equal to the
competition threshold and the scope of
work for the project can be completed
with the amount of funds awarded. This
exception may not be used to justify
two or more non-competitive awards of
less than or equal to the competition
threshold to the same applicant to
carry out activities that are part of the
same or a larger project.
(2) The Program Office has determined
through research, contacting
organizations, pre-solicitation
conferences, meetings or notices, or
similar means, that there is only one
responsible source that can adequately
perform the work to fulfill project
objectives. This determination must be
approved by the Program Office
director, or equivalent, and this
approval may not be redelegated.
(3) The award cannot be delayed due
to unusual and compelling urgency or
the interests of national security.
http://intranet.epa.gov/ogd/compet/order.htm 7/10/2003
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Competition - Policy for Competition in Assistance Agreements: 5700.5 Page 6 of 17
(4) The award is required by a Federal
statute, executive order, or
international agreement to identified
recipients.
(5) The award is to an organization that
represents the interests of co-
regulators or co-implementors (State,
Tribal or Local governments) in the
execution of national environmental
programs. (The membership of such
organizations is generally composed of
officials of the co-regulator or co-
implementor entities, e.g., State or
Tribal program directors or
commissioners.)
(6) The award is to fund an unsolicited
proposal that is unique or innovative
and does not resemble the substance
of a pending or contemplated
competitive solicitation. No EPA
employee may take action to directly or
indirectly encourage the submission of
unsolicited proposals in order to avoid
competition under this policy.
(7) The Lead Agency Program Official,
with the concurrence of the Grants
Competition Advocate, determines that
competition is not in the public interest.
b. If a Headquarters or Regional Program Office
determines It is appropriate to award an assistance
agreement non-competitively based on the criteria in
paragraph a., it must provide a detailed justification
in the award decision memorandum explaining why
competition is inappropriate.
9. AMENDMENTS.
a. General. Headquarters or Regional Program
Offices may not use funding amendments to avoid
compliance with this policy.
b. Incremental funding amendments. Headquarters
or Regional Program Offices may award incremental
funding amendments to incrementally-funded
assistance agreements without competition,
provided the original assistance agreement was
awarded competitively or qualified for one or more
competition exemptions under sections 8.a.(2)
through (7) of this Order. An incremental amendment
adds funds to an award when the original application
request was partially funded. The amendment must
not increase the scope of the project as described in
the original award.
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Competition - Policy for Competition in Assistance Agreements: 5700.5 Page 7 of 17
c. Initial funding amendments of less than or equal to
the competition threshold to competitive awards.
Headquarters or Regional Program Offices may
award a single non-competitive funding amendment
of less than or equal to the competition threshold (for
other than incremental-funding) to an award if the
recipient was selected through a competition
process consistent with this policy, provided the
amendment is for activities consistent with the
original scope of work.
d. Other funding amendments. Appendix A
summarizes requirements for all funding
amendments.
10. ANNOUNCEMENT OF FUNDING OPPORTUNITIES ANP
REQ"Fyre FOR APP' I^ATIQMS AMD REQUESTS FOR
INITIAL PROPOSALS.
a. EPA's funding opportunities for assistance
agreements are identified for the public in the
Catalog of Federal Domestic Assistance (CFDA).
Each year, EPA Program Offices work with the
Grants Administration Division to update existing
CFDA descriptions and provide descriptions for new
programs. CFDA descriptions include a list of eligible
applicants, an explanation of the activities that may
be funded, a list of annual funding priorities, an
estimate of fiscal year funding availability, an
average range of funding for each award, and an
estimated number of awards to be made for each
fiscal year.
b. Simplified Competition. Headquarters or Regional
Program Offices are encouraged to use a
competitive process when funds available for award
(s) are less than or equal to the competition
threshold. If a Program Offices decides to do so, it
may:
(1) Informally solicit applications or
initial proposals from eligible
organizations that can adequately
perform the work to fulfill the program
or project objectives.
A. Such organizations
can be contacted through
written correspondence
or e-mails that describe
the nature of the project
(s) that EPA is interested
in supporting, the amount
of funds available for
each award, the factors
that the Agency will use
in evaluating applications
or initial and final
proposals, and the due
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Competition - Policy for Competition in Assistance Agreements: 5700.5 Page 8 of 17
date for applications or
initial proposals.
B. Generally, for one
award, the Program
Office should contact at
least three eligible
organizations. For
multiple awards, the
Program Office should
contact twice as many
organizations as are
expected to receive
awards.
(2) As an alternative to simplified
competition, the Program Office may
chose to follow the formal procedures
described in paragraph c. of this
Section.
c. Open Competition. When funds available for
award(s) exceed the competition threshold and
except as provided in paragraph d. of this section,
the Headquarters or Regional Program Office must
publish in the Federal Register or on an EPA web-
site, a RFA; a RFIP; or a notice of availability of the
RFA or RFIP, generally at least 60 days before the
application deadline. The office must also notify the
Grants Competition Advocate of the location of the
RFA or RFIP (see Section 13.b.). In addition,
Program Offices may supplement Federal Register
or web-site publication through:
(1) Posting RFAs or RFIPs at
www.FedBizOpps.gov/. (Posting at
FedBizOps.gov may be required by
OMB in the future as the primary
method of solicitation. If so, the
Competition Advocate will issue
implementing guidance.)
(2) Publishing RFAs or RFIPs in
newsletters, trade journals, general
circulation newspapers, or other written
media or by mass mailing.
(3) Providing RFAs or RFIPs using
electronic means other than web sites
such as through list servers or
facsimile mailing lists that are
periodically updated. Updates should
be made through a process that allows
new potential applicants, upon request,
to be added to the lists.
(4) Mailing copies of RFAs or RFIPs to
eligible organizations on EPA mailing
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lists that are periodically updated.
Updates should be made through a
process that allows new potential
applicants, upon request, to be added
to the lists.
(5) Using other methods as approved
by the Grants Competition Advocate
that are reasonably calculated to
ensure that likely interested parties will
be notified.
d. Managed Competition. In cases where a
Headquarters or Regional Program Office, with the
approval of the Senior Resource Official or higher
Agency official and the concurrence of the Grants
Competition Advocate, determines that the methods
in paragraph (c) are not practicable, the Program
Office may provide RFAs or RFIPs directly, through
electronic or written media, to a subset of the
potential applicants which have demonstrated
expertise in the subject matter area. Generally, for
one award, Program Offices should notify at least
five potential applicants, and for more than one
award, at least three times as many potential
applicants as the number of expected awards. In
conducting managed competitions. Program Offices
should vary the subset of organizations that are
contacted. The SRO approval and Grants
Competition Advocate concurrence must be
documented in the award decision memorandum.
11 CONTENTS OF REQUESTS FOR APPLICATIONS OR
REQUESTS FOR INITIAL PROPOSALS.
a. RFAs and RFIPs must, as applicable, include the
information required in paragraphs a.(1) through (27)
of this section. (If OMB establishes government-wide
requirements for solicitations, the Competition
Advocate will issue implementing guidance.)
(1) The Catalog of Federal Domestic
Assistance (CFDA) number and title for
the program or project to be funded,
where available. (If the request for
assignment of a CFDA number is
pending, the announcement should
indicate this.)
(2) An estimate of: the amount of
Federal funds that may be available for
award; the number of individual
awards; the amounts or range of
individual awards; the amount of
funding per award; and the project
periods for the awards. Whether
applications for supplemental awards
of existing projects are eligible to
compete with applications for new
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awards should be addressed as well.
(3) Applicant eligibility requirements.
(4) Background information on the
types of projects the Agency is
interested in supporting, including any
limitations on the scope of the statutory
authority for the planned award. The
Agency's funding priorities or the
technical or focus areas in which the
Agency intends to provide assistance
must be described.
(5) Matching or cost sharing
requirements, if any.
(6) Subjects that the applicant must
address in the application, or initial
proposal including related content and
forms and formats. (The list or
description of subjects must be
consistent with the evaluation factors.)
(7) Process, procedures, due dates,
and local time for submitting
applications or initial proposals.
(8) The availability of pre-application
assistance, if any, to ensure that all
applicants have the same opportunity
to obtain assistance.
(9) Whether a grant or cooperative
agreement will be used, if known, and
for a cooperative agreement
competition, the anticipated substantial
involvement between the Federal
government and the recipient.
(10) Any threshold "pass/fail* criteria
that an applicant must meet to be
considered for an award, such as the
need for certain legal authorities to
carry out a project.
(11) The evaluation criteria that will be
applied to the review of applications or
initial and final proposals and the
relative importance of each criterion.
(12) Other factors that will be
considered in making award decisions
after applications are initially evaluated,
such as the geographic distribution of
funds.
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(13) The process that will be used to
evaluate applications or initial and final
proposals.
(14) The dispute resolution process in
accordance with 40 CFR 30.63 and
Part31,subpartF.
(15) Applicable regulations and cost
principles, and other administrative
requirements.
(16) A statement that applicants should
clearly mark information they consider
confidential, and that EPA will make
final confidentiality decisions in
accordance with Agency regulations at
40 CFR. Part 2, SubpartB.
(17) A statement indicating the
applicability of Executive Order 12372,
Intergovernmental Review of Federal
Programs.
(18) A statement that EPA reserves the
right to reject all proposals or
applications and make no awards.
(19) For RFIPs, a clear explanation
that EPA will invite only applicants
whose initial proposals are selected to
submit detailed final proposals.
(20) Title of RFA or RFIP if different
from CFDA title.
(21) RFA or RFIP number or other
information which identifies the
announcement, if available.
(22) The Program Office name and
mailing address with zip code.
(23) The name of the Program Office
contacts including telephone number, if
appropriate, fax number, and e-mail
address.
(24) The address to request application
forms (Standard Form 424) and related
information or Internet address where
materials are accessible. For RFIPs,
application forms (SF 424) generally .
are required only with final proposals.
(26) Information regarding funding
restrictions in order to allow the
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applicant to develop an application and
budget consistent with program
requirements (e.g., allowable activities,
limitations on direct costs such as
foreign travel or equipment purchases,
and limitations on indirect costs).
(27) Other information which may be
required in guidance issued by the
Competition Advocate.
b. If a Headquarters or Regional Program Office
changes the requirements of a RFA or RFIP before
the application deadline, it must notify potential
applicants in the same manner that it publicized the
original announcement.
c. Generally, to be considered timely, applications
and initial proposals must be postmarked by the U.S.
Postal Service, hand-delivered, or electronically
delivered to the Agency, or include official delivery
service documentation indicating EPA acceptance
from a delivery service, on or before the deadline
date published in the RFA or RFIP.
d. Headquarters or Regional Program Offices may
authorize an application deadline extension when
justified by appropriate circumstances. The Program
Office must notify potential applicants of the
extension, in the same manner that it publicized the
original notice, or such other manner as to assure all
potential applicants are notified.
12. REVIEW. EVALUATION AND APPROVAL PROCEDURES.
a. When funds available for award exceed the
competition threshold, Headquarters or Regional
Program Offices must establish, through formal
written procedures and in accordance with guidance
issued by the Grants Competition Advocate, an
objective and unbiased process for reviewing and
evaluating applications or initial or final proposals
based on the RFA or RFIP published evaluation
criteria. Funding decisions may not be made on the
basis of undisclosed threshold or evaluation criteria.
The process must ensure that individual reviewers
do not have a conflict of interest with regard to a
particular applicant, application or initial or final
proposals. While non-federal personnel may
participate in the review process, final decisions on
the relevance of a proposal to program needs and
the selection of recipients must be made by EPA
personnel. At a minimum, the process should
provide that:
(1) For RFIPs, the Headquarters or
Regional Program Office may establish
a panel to review and select initial
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proposals of applicants which will be
invited to submit final proposals and to
review and rank or list final proposals.
An approval official must determine,
from the qualified final applications,
which to approve.
(2) If a Headquarters or Regional
Program Office issues an RFA, a panel
may review and rank or list qualified
applications. An approval official must
review the ranked list or list of qualified
applications and determine which to
approve.
b. Headquarters or Regional Program Offices may
evaluate applications or initial and final proposals
based on: points; low, medium and high rating
systems; narrative systems; or similar methods.
c. Headquarters or Regional Program Offices may
structure the review and evaluation process to lead
to rankings of applications or initial and final
proposals or to a list of qualified applications. The
ranking or final list will be forwarded to the approval
official who will select the applications or final
proposals which will be funded. If the approval
official disagrees with the recommendations of
reviewers and selects an application out of rank
order or a proposal that is not on the list of qualified
proposals, the approval official must document in the
decision memorandum the basis for that selection. A
departure from the recommendations of reviewers
cannot be based on undisclosed evaluation criteria.
d. Headquarters or Regional Program Offices must
maintain complete records on the process used to
select recipients, including the names of reviewers,
score sheets, ranked lists or lists of qualified
applications or initial and final proposals, written
evaluations, and funding recommendations and
decisions.
e. Headquarters or Regional Program Offices must
notify unsuccessful applicants in writing, generally
within 60 days of selection, that they will not be
receiving awards. If requested by the applicant, the
Program Office must provide a written explanation
as to why the applicant did not receive an award,
including a summary of the strengths and
weaknesses of the application or initial proposal or
final proposal.
f.. Headquarters or Regional Program Offices that
solicit applications for awards of less than or equal to
the competition threshold as provided in paragraph
10.b.(1) may establish an informal process for
reviewing and selecting applications, provided the
process is unbiased, objective, does not rely on
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undisclosed evaluation criteria, and reflects guidance
issued by the Grants Competition Advocate
13 GRANTS COMPETITION ADVOCATE.
Located in the Office of Grants and Debarment, the
Grants Competition Advocate will be responsible for
overseeing the implementation of this Order. The
Grants Competition Advocate will:
a. Develop guidance concerning implementation of
this Order, including guidance on exemptions under
this Order, solicitation procedures, post award public
disclosure, and evaluation and review procedures.
b. Carry out the specific responsibilities identified in
this Order, including those under: sections 6.b.(7);
7.b.; 8.a.(7); 10.c., c.(1) and c.(5); 10.d.; 11.a. and a.
(27); 12.a. and f.; 14.a. and b.; and 15.c.
c. Coordinate the development and presentation of
training, as necessary, to assure effective
implementation of this Order.
d. Evaluate the effectiveness of this Order toward
providing effective grants competition based on
relevant performance measures and reports.
e. Conduct the study required in section 5.e. and
recommend to Assistant Administrator for OARM
what the competition threshold should be for fiscal
years after 2004.
14. PROGRAM OFFICE PROCEDURES.
a. Headquarters Program Offices may develop
program-specific procedures to implement this
Order. These procedures must be approved by the
Grants Competition Advocate who will assure they
are posted on the GAD or other web-site, as
appropriate.
b. Regional Program Offices may, in consultation
with the relevant Regional Grants Management
Office, develop program-specific procedures to
implement this Order. These procedures must be
approved by the Grants Competition Advocate who
will assure they are posted on a GAD or other web
site, as appropriate.
c. In developing program-specific procedures,
headquarters and Regional Program Offices may
propose innovative competition processes that better
fit the needs and objectives of their particular
programs.
15. RESPONSIBILITIES.
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a. Headquarters or Regional Program Offices must
promote competition and conduct competitions in
accordance with this Order. Decision memoranda
must document the actions taken to comply with this
Order. Further, decision memoranda must provide, if
required, the documentation specified in sections 7.
8,10. and 12 and Appendix A.
b. The Grants Competition Advocate will perform the
activities listed in section 13 of this Order.
c. Grants Management Offices (GMO) must review
funding packages to ensure that the decision
memorandum requirements of this Order are
satisfied. If the GMO and the Program Office
disagree concerning compliance with the Order, the
matter will be resolved by the Grants Competition
Advocate.
d. The Office of General Counsel and Office of
Regional Counsel will provide legal advice to
Headquarters and Regional Program offices
conducting competitions.
f. Lead Agency Program Officials must carry out the
responsibilities under under sections 6.b.(7) and 7.b.
Lead Agency Program Officials, with the
concurrence of the Grants Competition Advocate.
must also carry out the responsibility under section
8.a.(7).
g. Senior Resource Officials, with the concurrence of
the Grants Competition Advocate, must carry out the
responsibilities under Section 10.d.
h. The Assistant Administrator for OARM determines
the competition threshold for fiscal years after 2004
(see section 5.e.) and carries out responsibilities
under sections 6.b.(7) and 7.b of the Order.
APPENDIX A . FUNDING AMENDMENTS
A. INCREMENTAL AMENDMENTS:
An incremental amendment adds funds to an award when the
original application request was partially funded. The amendment
must not increase the scope of the project as described in the
original award.
(1) Competition is not
required.
COMPETITION THRESHOLD TO COMPETITIVE AWARDS:
(1) Competition is not
required, provided the
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additional activities are
consistent with the scope
of work.
C. INITIAL AMENDMENT EXCEEDING THE COMPETITION
THRESHOLD TO COMPETITIVE AWARDS:
(1) If the Program Office demonstrates in the decision
memorandum that the need for additional funding is based on
unusual circumstances that could not have been anticipated at the
time of the original award, it may award a non-competitive
amendment. Funding can be added for discrete activities
necessary to enhance the results or complete the project Funding
cannot be added to expand the original scope of work.
(2) A non-competitive amendment can also be awarded if the
Program Office demonstrates in the decision memorandum that
the award of additional funding meets one or more of the
exception criteria in Section 8.a.(2) through (7) of the Order.
(3) Otherwise, the work must be competed in accordance with the
requirements of the Order.
D. SUBSEQUENT AMENDMENTS OF LESS THAN OR EQUAL
TO THE COMPETITION THRESHOLD TO COMPETITIVE
AWARDS:
(1) Follow the
requirements of
Paragraph C.
E SUBSEQUENT AMENDMENTS EXCEEDING THE
COMPETITION THRESHOLD TO COMPETfTIVE AWARDS:
(1) Follow the
requirements of
Paragraph C.(2) and (3).
F. INITIAL AMENDMENTS OF LESS THAN OR EQUAL TO THE
(1) Follow the
requirements of
Paragraph C.
G INITIAL AMENDMENTS EXCEEDING THE COMPETITION
THRESHOLD TO NON-COMPETITIVE AWARDS:
(1) Follow the
requirements of
Paragraph C.(2) and (3).
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(1) Follow the
requirements of
Paragraph C.(2) and (3).
I. SUBSEQUENT AMENDMENTS EXCEEDING THE
CQMPETmON THRESHOLD TO NON-COMPETITIVE
AWARDS:
(1) Follow the
requirements of
Paragraph C.(2) and (3).
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•deof Federal Regulations Search Results http^«fr.access.Epo.gov/otcgi/cfWotf...v,ew^UBSET^SlJBSET&FROM-I&SIZE=10&ITEM'
Electronic Code of Federal Regulations
— e-CWt
TM
THIS DATA CURRENT AS OF THE FEDERAL REGISTER DATED JULY 25,2002
40CFR
Protection of Environment
CHAPTER I
ENVIRONMENTAL PROTECTION AGENCY
SUBCHAPTER B - GRANTS AND OTHER FEDERAL ASSISTANCE
PART 30 - UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND
AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER
NON-PROFIT ORGANIZATIONS
Subpart A — General
Sec.
30.1 Purpose.
30.2 Definitions.
30.3 Effect on other issuances.
30.4 Deviations.
30 5 Subawards.
306 Availability of OMB circulars.
Subpart B — Pre-Award Requirements
30.10 Purpose.
30 11 Pre-award policies.
30.12 Forms for applying for Federal assistance.
30 1? Debarment and suspension.
30.14 Special award conditions.
30.15 Metric system of measurement.
30.16 Resource Conservation and Recovery Act (RCRA).
30.17 Certifications and representations.
30 18 Hotel and motel fire safety.
Subpart C — Post-Award Requirements
FINANCIAL AND PROGRAM MANAGEMENT
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3020 Purpose of financial and program management.
30.21 Standards for financial management systems.
'022 Payment
"•2' Cost sharing or matching
.•I 124 Program income
jQ.25 Revision of budget and program plans.
30.26 Non-Federal audits
30.27 Allowable costs.
30.28 Period of availability of funds.
PROPERTY STANDARDS
30.30 Purpose of property standards.
30.31 Insurance coverage.
30.32 Real property.
30.33 Federally-owned and exempt property.
30.34 Equipment
30.35 Supplies and other expendable property.
30.36 Intangible property.
30.37 Property trust relationship.
PROCUREMENT STANDARDS
3040 Purpose of procurement standards.
30 41 Recipient responsibilities.
30.42 Codes of conduct
30.43 Competition.
30.44 Procurement procedures.
30.45 Cost and price analysis.
30.46 Procurement records.
30.47 Contract administration.
30.48 Contract provisions.
REPORTS AND RECORDS
30.50 Purpose of reports and records.
30.51 Monitoring and reporting program performance.
30.52 Financial reporting.
30.53 Retention and access requirements for records.
30.54 Quality assurance.
TERMINATION AND ENFORCEMENT
30.60 Purpose of termination and enforcement.
30.61 Termination.
30.62 Enforcement.
30.63 Disputes.
Subpart D — After-the-Award Requirements
30.70 Purpose.
30.71 Closeout procedures.
30.72 Subsequent adjustments and continuing responsibilities.
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leof Federal Regulations Sean* Results httpV/ecfr.,^.^^
30.73 Collection of amounts due.
Appendix to Part 30 - Contract Provisions
Authority 7 USC USctscq, 15 U.S.C. 2601 ct seq ; 33 U.S.C. 1251 etseq ;42 U.S.C.241, 242b. 24?. 246. ?00f. 300j-l.
300j-2. 300J-3. 1857 et seq. 6901 et seq . 7401 et seq. 9601 ct seq . OMB Circular A-l 10 (64 FR 54926. October R 1999)
Source: fa I FROU67. Feb. 15. 1996. unless otherwise noted
Subpart A - General
[TOPI
§30.1 Purpose.
This subpart establishes uniform administrative requirements for Federal grants and agreements awarded to
institutions of higher education, hospitals, and other non-profit organizations. The Environmental
Protection Agency (EPA) may not impose additional or inconsistent requirements, except as provided in
§§30 4, and 30.14 or unless specifically required by Federal statute or Executive Order. Non-profit
organizations that implement Federal programs for the States are also subject to State requirements.
[TOPI
§30.2 Definitions.
(a) Accrued expenditures means the charges incurred by the recipient during a given period requiring the
provision of funds for:
(1) Goods and other tangible property received;
(2) Services performed by employees, contractors, subrecipients, and other payees; and
(3) Other amounts becoming owed under programs for which no current services or performance is
required.
(b) Accrued income means the sum of:
(1) Earnings during a given period from;
(i) Services performed by the recipient; and
(ii) Goods and other tangible property delivered to purchasers; and
(2) Amounts becoming owed to the recipient for which no current services or performance is required by
the recipient.
(c) Acquisition cost of equipment means the net invoice price of the equipment, including the cost of
modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for
the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes,
duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in
accordance with the recipient's regular accounting practices.
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(d) Advance means a payment made by Treasury check or other appropriate payment mechanism to a
recipient upon its request either before outlays are made by the recipient or through the use of
predetermined payment schedules.
(e) Award means financial assistance that provides support or stimulation to accomplish a public purpose.
Awards include grants and other agreements in the form of money or propcm in lieu of money, by the
Federal Government to an eligible recipient. The term does not include, technical assistance, which
provides services instead of money, other assistance in the form of loans, loan guarantees, interest
subsidies, or insurarise; di*- • inents of any kind to individuals; and, contracts which are required to be
entered into and admin* • x. J x: procurement laws and regulations.
(f) Cash contribut .. j^ the recipient's cash outlay, including the outlay of money contributed to the
recipient by third pamss.
(g) Closeout means the process by which a Federal awarding agency determines that all applicable
administrative actions and all required work of the award have been completed by the recipient and Federal
awarding agency.
(h) Contract means a procurement contract under an award or subaward, and a procurement subcontract
under a recipient's or subrecipient's contract.
(i) Cost sharing or matching means that portion of project or program costs not bome by the Federal
Government.
(j) Date of completion means the date on which all work under an award is completed or the date on the
award document, or any supplement or amendment thereto, on which Federal sponsorship ends.
(k) Disallowed costs means those charges to an award that the Federal awarding agency determines to be
unallowable, in accordance with the applicable Federal cost principles or other terms and conditions
contained in the award.
(1) Equipment means tangible nonexpendable personal property including exempt property charged directly
to the award having a useful life of more than one year and an acquisition cost of $5000 or more per unit.
However, consistent with recipient policy, lower limits may be established.
(m) Excess property means property under the control of any Federal awarding agency that, as determined
by the head thereof, is no longer required for its needs or the discharge of its responsibilities.
(n) Exempt property means tangible personal property acquired in whole or in part with Federal funds,
where the Federal awarding agency has statutory authority to vest title in the recipient without further
obligation to the Federal Government. An example of exempt property authority is contained in the Federal
Grant and Cooperative Agreement Act (31 U.S.C. 6306), for property acquired under an award to conduct
basic or applied research by a non-profit institution of higher education or non-profit organization whose
principal purpose is conducting scientific research.
(o) Federal awarding agency means the Federal agency that provides an award to the recipient.
(p) Federal funds authorized means the total amount of Federal funds obligated by the Federal Government
for use by the recipient. This amount may include any authorized carryover of unobligated funds from prior
funding periods when permitted by agency regulations or agency implementing instructions.
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(q) Federal share of real property, equipment, or supplies means that percentage of the property's
acquisition costs and any improvement expenditures paid with Federal funds.
(r) Funding period means the period of time when Federal funding is available for obligation by the
recipient.
(s) Intangible property and debt instruments means, but is not limited to, trademarks, copyrights, patents
and patent applications and such property as loans, notes and other debt instruments, lease agreements,
stock and other instruments of property ownership, whether considered tangible or intangible.
(t) Obligations means the amounts of orders placed, contracts and grants awarded, services received and
similar transactions during a given period that require payment by the recipient during the same or a future
period.
(u) Outlays or expenditures means charges made to the project or program. They may be reported on a cash
or accrual basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements for direct
charges for goods and services, the amount of indirect expense charged, the value of third party in-kind
contributions applied and the amount of cash advances and payments made to subrecipients. For reports
prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and
services the amount of indirect expense incurred, the value of in-kind contributions applied, and the net
increase (or decrease) in the amounts owed by the recipient for goods and other property received, for
services performed by employees, contractors, subrecipients and other payees and other amounts becoming
owed under programs for which no current services or performance are required.
(v) Personal property means property of any kind except real property. It may be tangible, having physical
existence, or intangible, having no physical existence, such as copyrights, patents, or securities.
(w) Prior approval means written approval by an authorized official evidencing prior consent.
(x) Program income means gross income earned by the recipient that is directly generated by a supported
activity or earned as a result of the award (see exclusions in §30.24 (e) and (h)). Program income includes,
but is not limited to, income from fees for services performed, the use or rental of real or personal property
acquired under federally-funded projects, the sale of commodities or items fabricated under an award,
license fees and royalties on patents and copyrights, and interest on loans made with award funds. Interest
earned on advances of Federal funds is not program income. Except as otherwise provided in Federal
awarding agency regulations or the terms and conditions of the award, program income does not include
the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.
(y) Project costs means all allowable costs, as set forth in the applicable Federal cost principles, incurred by
a recipient and the value of the contributions made by third parties in accomplishing the objectives of the
award during the project period.
(z) Project period means the period established in the award document during which Federal sponsorship
begins and ends.
(aa) Property means, unless otherwise stated, real property, equipment, intangible property and debt
instruments.
(bb) Real property means land, including land improvements, structures and appurtenances thereto, but
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excludes movable machinery' and equipment.
(cc) Recipient means an organization receiving f: ncial assistance directly from Federal awarding
agencies to carry out a project or program. The term includes public and private institutions of higher
education, public and private hospitals, and other quasi-public and private non-profit organi/a: T.* >-ch a<.
but not limited to, community action agencies, research institutes, educational associations, and health
centers. The term may include commercial organizations, foreign or international organizations (such a.«.
agencies of the United Nations) which are recipients, subrecipients, or contractors or subcontractors of
-ecipients or subrecipients at the discretion of the Federal awarding agency. The term does not include
government-owned contractor-operated facilities or research centers providing continued support for
mission-oriented, large-scale programs that are government-owned or controlled, or are designated as
federally-funded research and development centers.
• (dd) Research and development ? sans all research activities, both basic and applied, and all development
activities that are supported at universities, college -ther non-profit institutions. "Research" is defined
as a systematic study directed toward fuller scientit, jwledge or understanding of the subject studied.
"Development" is the systematic use of knowledge and understanding gained from research directed
towar* " oroducti^ .: useful materials, devices, systems, or methods, including design and development
of pr .s and p- -esses. The term research also includes activities involving the training of individuals
in res echniques where such activities utilize the same facilities as other research and development
activit, A where such activities are not included in the instruction fur"-
(ee)Siru .ward me. "-ant or cooperative agreement not exceeding uie small purchase threshold fixed
at 41 U.S.C. 403(11) (currently $100,000).
(ff) Subaward means an award of financial assistance in the form of money," ^roperty in lieu of money,
made under an award by a recipient to an eligible subrecipient or by a subret ;;ient to a lower tier
subrecipient. The term includes financial assistance when provided by any legal agreement, even if the
agreement is called a contract, but does not include procurement of goods and services nor does it include
any form of assistance which is excluded from the definition of "award" in paragraph (e) of this sectio
(gg) Subrecipient means the legal entity to which a subaward is made and which is accountable to the
recipient for the use • the funds provided. The term may include foreign or international organizations
(such as agencies oi ine United Nations) at the discretion of the Federal awarding agency.
(hh) Supplies means all personal property excluding equipment, intangible property, and debt instruments
as defined in this section, and inventions of a contractor conceived or first actually reduced to practice in
the performance of work under a funding agreement ("subject inventions"), as defined in 37 CFR part 401,
"Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government
Brants, Contracts, and Cooperative Agreements."
(ii) Suspension means an action by a Federal awarding agency that temporarily withdraws Federal
sponsorship under an award, pending corrective action by the recipient or pending a decision to tei-unate
the award by the Federal awarding agency. Suspension of an award is a seps -3 action from suspi. iion
under Federal agency regulations implementing Executive Orders 12549 ana 12689, "Debarment and
Suspension."
(jj) Termination means the cancellation of Federal sponsorship, in whole or in part, under an agreement at
any time prior to the date of completion.
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(kk) Third party in-kind contributions means the value of non-cash contributions provided by non-Federal
third parties. Third party in-kind contributions may be in the form of real property, equipment, supplies and
other expendable property, and the value of goods and services directly benefiting and specifically
identifiable to the project or program.
(11) Unliquidated obligations, for financial reports prepared on a cash basis, means the amount of
obligations incurred by the recipient that have not been paid. For reports prepared on an accrued
expenditure basis, they represent the amount of obligations incurred by the recipient for which an outlay
has not been recorded.
(mm) Unobligated balance means the portion of the funds authorized by the Federal awarding agency that
has not been obligated by the recipient and is determined by deducting the cumulative obligations from the
cumulative funds authorized.
(nn) Unrecovered indirect cost means the difference between the amount awarded and the amount which
could have been awarded under the recipient's approved negotiated indirect cost rate.
(oo) Working capital advance means a procedure where by funds are advanced to the recipient to cover its
estimated disbursement needs for a given initial period.
[TOPI
§30.3 Effect on other issuances.
For awards subject to Circular A-l 10, all administrative requirements of codified program regulations,
program manuals, handbooks and other nonregulatory materials which are inconsistent with the
requirements of Circular A-l 10 shall be superseded, except to the extent they are required by statute, or
authorized in accordance with the deviations provision in §30.4.
[TOPI
§30.4 Deviations.
The Office of Management and Budget (OMB) may grant exceptions for classes of grants or recipients
subject to the requirements of Circular A-l 10 when exceptions are not prohibited by statute. However, in
the interest of maximum uniformity, exceptions from the requirements of Circular A-l 10 shall be
permitted only in unusual circumstances. EPA may apply more restrictive requirements to a class of
recipients when approved by OMB. EPA may apply less restrictive requirements when awarding small
awards, except for those requirements which are statutory. Exceptions on a case-by-case basis may also be
made by EPA.
[TOPI
§30.5 Subawards.
Unless sections of Circular A-l 10 specifically exclude subrecipients from coverage, the provisions of
Circular A-l 10 shall be applied to subrecipients performing work under awards if such subrecipients are
institutions of higher education, hospitals or other non-profit organizations. State and local government
subrecipients are subject to the provisions of regulations in 40 CFR part 31 implementing the grants
management common rule, "Uniform Administrative Requirements for Grants and Cooperative
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Agreements to State and Local Governments,".
[TOPI
§30.6 Availability of OMB circulars.
OMB circulars cited in this part are available from the Office of Management and Budget (OMB) by
writing to the Executive Office of the President, Publications Service, 725 17th Street, NW., Suite 200,
Washington, DC 20503.
- Pre-Award Requirements
[TOPI
§30.10 Purpose.
Sections 30.! 1 through 30.18 prescribe forms and instructions and other pre-award matters to be used in
applying for Federal awards.
[TOPI
§30.11 Pre-award policies.
(a) Use of grants and cooperative agreements, and contracts. In each instance, EPA shall decide on the
appropriate award instrument (i.e., grant, cooperative agreement, or contract). The Federal Grant and
Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of grants, cooperative agreements and
contracts. A grant or cooperative agreement shall be used only when the principal purpose of a transaction
is to accomplish a public purpose of support or stimulation authorized by Federal statute. The statutory
criterion for choosing oetween grants and cooperative agreements is that for the latter, "substantial
involvement is expected between the executive agency and the State, local government, or other recipient
when carrying out the activity contemplated in the agreement." Contracts shall be used when the principal
purpose is acquisition of property or services for the direct benefit or use of the Federal Government.
(b) Public notice and priority setting. EPA shall notify the public of its intended funding priorities for
discretionary grant programs, unless funding priorities are established by Federal statute.
(c) By submitting an application to EPA, the applicant grants EPA permission to share the applies ;on with
technical reviewers .both within and outside the Agency.
[TOPI
§30.12 Forms for applying for Federal assistance.
(a) EPA shall comply with the applicable report clearance requirements jf 5 CFR part 1320, "Controlling
Paperwork Burdens on the Public," with regard to all forms used by EPA in place of or as a supplement to
the Standard Form 424 (SF-424) series.
(b) Applicants shall use the SF-424 series or those forms and instructions prescribed by EPA.
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(c) For Federal programs covered by Executive Order 12372, "Intergovernmental Review of Federal
Programs," the applicant shall complete the appropriate sections of the SF-424 (Application for Federal
Assistance) indicating whether the application was subject to review by the State Single Point of Contact
(SPOC). The name and address of the SPOC for a particular State can be obtained from EPA or the
Catalog of Federal Domestic Assistance. The SPOC shall advise the applicant whether the program for
which application is made has been selected by that State for review.
(d) If the SF-424 form is not used EPA should indicate whether the application is subject to review by the
State under Executive Order 12372.
[TOPI
§30.13 Debarment and suspension.
EPA and recipients shall comply with the nonprocurement debarment and suspension regulations in 40
CFR part 32 implementing Executive Orders 12549 and 12689, "Debarment and Suspension." 40 CFR part
32 restricts subawards and contracts with certain parties that are debarred, suspended or otherwise excluded
from or ineligible for participation in Federal assistance programs or activities.
[TOPI
§30.14 Special award conditions.
If an applicant or recipient: has a history of poor performance, is not financially stable; has a management
system that does not meet the standards prescribed in Circular A-l 10; has not conformed to the terms and
conditions of a previous award; or is not otherwise responsible, EPA may impose additional requirements
as needed, provided that such applicant or recipient is notified in writing as to: the nature of the additional
requirements, the reason why the additional requirements are being imposed, the nature of the corrective
action needed, the time allowed for completing the corrective actions, and the method for requesting
reconsideration of the additional requirements imposed. Any special conditions shall be promptly removed
once the conditions that prompted them have been corrected.
[TOPI
§30.15 Metric system of measurement
The Metric Conversion Act, as amended by the Omnibus Trade and Competitiveness Act (15 U.S.C. 205),
declares that the metric system is the preferred measurement system for U.S. trade and commerce. The Act
requires each Federal agency to establish a date or dates in consultation with the Secretary of Commerce,
when the metric system of measurement will be used in the agency's procurements, grants, and other
business-related activities. Metric implementation may take longer where the use of the system is initially
impractical or likely to cause significant inefficiencies in the accomplishment of federally-funded activities.
EPA shall follow the provisions of Executive Order 12770, "Metric Usage in Federal Government
Programs."
[TOPI
§30.16 Resource Conservation and Recovery Act (RCRA).
Resource Conservation and Recovery Act (RCRA) (Public Law 94-580 codified at 42 U.S.C. 6962). Under
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the Act, any State agency or agency of a political subdivision of a State which is using appropriated Federal
Hinds must comply with Section 6002. Section 6002 requires that preference be given in procurement
programs to the purchase of specific products containing recycled materials identified in guidelines
developed by EPA (40 CFR parts 247 through 254). Accordingly, State and local institutions of higher
education, hospitals, and non-profit organizations that receive direct Federal awards or other Federal funds
shall give preference in their procurement programs funded with Federal funds to the purchase of recycled
products pursuant to EPA's guidelines. Further, pursuant to Executive Order 12873 (dated October 20,
1993) recipients are to print documents/reports prepared under an EPA award of assistance double sided on
recycled paper. This requirement does not apply to Standard Forms. These forms are printed on recycled
paper as available through the General Services Administration.
[TOPI
§30.17 Certifications and representations.
Unless prohibited by statute or codified regulation, EPA will allow recipients to submit certifications and
representations required by statute, Executive Order, or regulation on an annual basis, if the recipients have
ongoing and continuing relationships with the agency. Annual certifications and representations shall be
signed by responsible officials with the authority to ensure recipients' compliance with the pertinent
requirements.
[TOPI
§30.18 Hotel and motel fire safety.
The Hotel and Motel Fire Safety Act of 1990 (Public Law 101-391) establishes a number of fire safety
standards which must be met for hotels and motels. The law provides further that Federal funds may not be
used to sponsor a conference, meeting, or training seminar held in a hotel or motel which does not meet the
law's fire protection and control guidelines. If necessary, the head of the Federal agency may waive this
prohibition in the public interest.
Subpart C — Post-Award Requirements
Financial and Program Management
[TQP1
§30.20 Purpose of financial and program management
Sections 30.21 through 30.28 prescribe standards for financial management systems, methods for making
payments and rules for: satisfying cost sharing and matching requirements, accounting for program income,
budget revision approvals, making audits, determining allowabiliry of cost, and establishing fund
availability.
[TOPI
§30.21 Standards for financial management systems.
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(a) EPA shall require recipients to relate financial data to performance data and develop unit cost
information whenever practical.
(b) Recipients' financial management systems shall provide for the following.
(1) Accurate, current and complete disclosure of the financial results of each federally-sponsored project or
program in accordance with the reporting requirements set forth in §30.52. If EPA requires reporting on an
accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient shall
not be required to establish an accrual accounting system. These recipients may develop such accrual data
for its reports on the basis of an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of funds for federally-sponsored activities.
These records shall contain information pertaining to Federal awards, authorizations, obligations,
unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds, property and other assets. Recipients shall
adequately safeguard all such assets and assure they are used solely for authorized purposes.
(4) Comparison of outlays with budget amounts for each award. Whenever appropriate, financial
information should be related to performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the transfer of funds to the recipient from
the U.S. Treasury and the issuance or redemption of checks, warrants or payments by other means for
program purposes by the recipient. To the extent that the provisions of the Cash Management Improvement
Act (CMIA) (Pub. L. 101-453) govern, payment methods of State agencies, instrumentalities, and fiscal
agents shall be consistent with CMIA Treasury-State Agreements or the CMIA default procedures codified
at 31 CFR part 205, "Withdrawal of Cash from the Treasury for Advances under Federal Grant and Other
Programs."
(6) Written procedures for determining the reasonableness, allocability and allowability of costs in
accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the
award.
(7) Accounting records including cost accounting records that are supported by source documentation.
(c) Where the EPA guarantees or insures the repayment of money borrowed by the recipient. ±2 -ecipient
shall provide adequate bonding and insurance if the bonding and insurance requirements cftr.e rccr .„..:.
are not deemed adequate to protect the interest of the Federal Government.
(d) Recipients shall obtain adequate fidelity bond coverage where coverage to protect the Federal
Government's interest is insufficient.
(e) Where bonds are required in the situations described above, the bonds shall be obtained frcr.:
companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR pan 123,
"Surety Companies Doing Business with the United States."
[TOPI
§30.22 Payment
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(a) Payment methods shall minimize the time elapsing between the transfer of funds from the United States
Treasury and the issuance or redemption of checks, warrants, or payment by other means by the recipients.
Payment methods of State agencies or instrumentalities shall be consistent with Treasury-State CMIA
agreements or default procedures codified at 31 CFR part 205.
(b) Recipients are to be pas»i ^ «<• -ire, provided they maintain or demonstrate the willingness to
maintain: written proceed"* t/nize the time elapsing between the transfer of funds and
disbursement by the rec .OK, isncial management systems that meet the standards for fund control
and accountability as esidr.u^-x. u §30.21. Cash advances to a recipient organization shall be limited to
the minimum amounts needed and be timed to be in accordance with the actual, immediate cash
requirements of the recipient organization in carrying out the purpose of the approved program or project.
The timing and amount of cash advances shall be as close as is administratively feasible to the actual
disbursements by the recipient organization for direct program or project costs and the proportionate share
of any allowable indire.r;i costs.
(c) Whenever possible, advances shall be consolidated to cover anticipated cash needs for all awards made
by the EPA to the recipient.
(1) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds
transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients shall be authorized to submit requests for advances and reimbursemer.. it least monthly
when electronic fund transfers are not used.
(d) Requests for Treasury check advance payment shall be submitted on SF-270, "Request for Advance or
Reimbursement," or other forms as may be authorized by OMB. This form is not to be used when Treasury
check advance payments are made to the recipient automatically through the use of a predetermined
payment schedule or if precluded by special instructions for electronic funds transfer.
(e) Reimbursement is the preferred method when the requirements in paragraph (b) of this section cannot
be met. EPA may also use this method on any construction agreement, or if the major portion of the
construction project is accomplished through private market financing or Federal loans, and the Federal
assistance constitutes a minor portion of the project.
(1) When the reimbursement method is used, EPA shall make payment within 30 days after receipt of the
billing, unless the billing is improper.
(2) Recipients shall be authorized to submit request for reimbursement at least monthly when electronic
funds transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments and EPA has determined that
reimbursement is not feasible because the recipient lacks sufficient working capital, EPA may provide cash
on a working capital advance basis. Under this procedure, EPA shall advance cash to the recipient to cover
its estimated disbursement needs for an initial period generally geared to the awardee's disbursing cycle.
Thereafter, EPA shall reimburse the recipient for its actual cash disbursements. The working capital
advance method of payment shall not be used for recipients unwilling or unable to provide timely advances
to their subrecipient to meet the subrecipient's actual cash disbursements.
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(g) To the extent available, recipients shall disburse funds available from repayments to and interest earned
on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries and interest
earned on such funds before requesting additional cash payments.
(h) Unless otherwise required by statute, EPA shall not withhold payments for proper charges made by
recipients at any time during the project period unless paragraph (h) (1) or (2) of this section applies.
(1) A recipient has failed to comply with the project objectives, the terms and conditions of the award, or
Federal reporting requirements.
(2) The recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular
A-129, "Managing Federal Credit Programs." Under such conditions, EPA may, upon reasonable notice,
inform the recipient that payments shall not be made for obligations incurred after a specified date until the
conditions are corrected or the indebtedness to the Federal Government is liquidated.
(i) Standards governing the use of banks and other institutions as depositories of funds advanced under
awards are as follows.
(1) Except for situations described in paragraph (i)(2) of this section, EPA shall not require separate
depository accounts for funds provided to a recipient or establish any eligibility requirements for
depositories for funds provided to a recipient. However, recipients must be able to account for the receipt,
obligation and expenditure of funds.
(2) Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.
(j) Consistent with the national goal of expanding the opportunities for women-owned and minority-owned
business enterprises, recipients shall be encouraged to use women-owned and minority-owned banks (a
bank which is owned at least 50 percent by women or minority group members).
(k) Recipients shall maintain advances of Federal funds in interest bearing accounts, unless paragraph (k)
(1), (2) or (3) of this section applies.
(1) The recipient receives less than $120,000 in Federal awards per year.
(2) The best reasonably available interest bearing account would not be expected to earn interest in excess
of $250 per year on Federal cash balances.
(3) The depository would require an average or minimum balance so high that it would not be feasible
within the expected Federal and non-Federal cash resources.
(1) For those entities where CMIA and its implementing regulations do not apply, interest earned on Federal
advances deposited in interest bearing accounts shall be remitted annually to Department of Health and
Human Services, Payment Management System, P.O. Box 6021, Rockville, MD 20852. Interest amounts
up to $250 per year may be retained by the recipient for administrative expense. State universi..:?s r.r.d
hospitals shall comply with CMIA, as it pertains to interest. If an entity subject to CMIA uses iis own funds
to pay pre-award costs for discretionary awards without prior written approval from EPA, it waives its nght
to recover the interest under CMIA. In keeping with Electronic Funds Transfer rules, (31 CFR part 206),
interest should be remitted to the HHS Payment Management System through an electronic medium such
as the FEDW1RE Deposit system. Recipients which do not have this capability should use a check.
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(rrrt Except as noted elsewhere in Circular A-l 10, only the following forms shall be authorized for the
re -nients in requesting advances and reimbursements. EPA shall not require more than an original and two
copies of these forms.
(1) SF-270. Request for Advance or Reimbursement. EPA shall adopt the SF-270 as a standard form for all
nonconstruction programs when electronic funds transfer or predetermined advance methods are not used.
However, EPA has the option of using this form for construction programs in lieu of the SF-271, "Outlay
Report and Request for Reimbursement for Construction Programs."
(2) V-277, Outlay Report and Request for Reimbursement for Construction Programs. EPA shall adopt
th' -F-271 as the standard form to be used for requesting reimbursement for construction programs.
H. wever, the SF-270 may be substituted when EPA determines that it provides adequate information to
meet its needs.
FTOP1
§30.23 Cost sharing or matching.
EPA shall not require cost sharing or matching unless required by statute, regulation, Executive Order, or
official Agency policy.
(a) All contributions, including cash and third party in-kind, shall be accepted as part of the recipient's cost
sharing or matching when such contributions meet all of the following criteria.
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-assisted project or program.
(3) Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award, except where authorized by Federal
statute to be used for cost sharing or matching.
(6) Are identified in the approved budget.
(7) Conform to other provisions of Circular A-l 10, as applicable.
(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior
approval of the EPA Award Official.
(c) Values for recipient contributions of services and property shall be established in accordance with the
applicable cost principles. If, after consultation with Agency property management personnel, the EPA
Award Official authorizes recipients to donate buildings or land for construction or facilities acquisition
projects or long-term use, the value of the donated property for cost sharing or matching shall be the lesser
of paragraph (c) (1) or (2) of this section.
(1) The certified value of the remaining life of the property recorded in the recipient's accounting records at
the time of donation.
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(2) The current fair market value. However, when there is sufficient justification, the EPA Award Official
may approve the use of the current fair market value of the donated property, even if it exceeds the certified
value at the time of donation to the project.
(d) Volunteer services furnished by professional and technical personnel, consultants, and other skilled aid
unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part
of an approved project or program. Rates for volunteer services shall be consistent with those paid for
similaVwork in the recipient's organization. In those instances in which the required skills are not found in
the recipient organization, rates shall be consistent with those paid for similar work in the labor market in
which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are
reasonable, allowable, and allocable may be included in the valuation.
(e) When an employer other than the recipient furnishes the services of an employee, these services shall be
valued at the employee's regular rate of pay (plus an amount of fringe benefits that are reasonable,
allowable, and allocable, but exclusive of overhead costs), provided these services are in the same skill for
which the employee is normally paid.
(ft Donated supplies may include such items as expendable equipment, office supplies, laboratory supplies
or workshop and classroom supplies. Value assessed to donated supplies included in the cost sharing o:
matching share shall be reasonable and shall not exceed the fair market value of the property at the time o,
the donation.
(g) The method used for determining cost sharing or matching for donated equipment, buildings and land
for which title passes to the recipient may differ according to the purpose of the award, if paragraph (g) (1)
or (2) of this section applies.
(1) If the purpose of the award is to assist the recipient in the acquisition of equipment, buildings or land,
the total value of the donated property may be claimed as cost sharing or matching.
(2) If the purpose of me award is to support activities that require the use of equipment, buildings or land,
normally only depreciation or use charges for equipment and buildings may be made. However, the full
value of equipment or other capital assets and fair rental charges for land may be allowed, provided that the
EPA technical program office, after consultation with EPA property management personnel, has approved
the charges.
(h) The value of donated property shall be determined in accordance with the usual accounting policiss z :
the recipient, with the following qualifications.
(1) The value of donated land and buildings shall not exceed its fair market value at the time of donation ;o
the recipient as established by an independent appraiser (e.g., certified real property appraiser or General
Services Administration representative) and certified by a responsible official of the recipient.
(2) The value of donated equipment shall not exceed the fair market value of equipment of the same age
and condition at the time of donation.
(3) The value of donated space shall not exceed the fair rental value of comparable space as established by
an independent appraisal of comparable space and facilities in a privately-owned building in the same
locality.
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(4) The value of loaned equipment s>.-/. not exceed its fair rental value.
(5) The following requirements pertain to the recipient's supporting records for in-kind contributions from
third parties.
(i) Volunteer services shall be documented and, to the extent feasible, supported by the same methods used
by the recipient for its own employees.
(ii) The basis for determining the valuation for personal service, material, equipment, buildings and land
shall be documented.
[TOPI
§30.24 Program income.
(a) EPA shall apply the standards set forth in this section in requiring recipient organizations to account for
program income related to projects financed in whole or in part with Federal funds.
(b) Except as provided in paragraph (h) of this section, program income earned during the project period
^hall be retained by the recipient and, in accordance with EPA regulations or the terms and conditions of
t!:e award, shall be used in one or more of the ways listed in the following.
(1) Added to funds committed to the project by EPA and rec- lent and used to further eligible project or
program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in determining the net allowable costs on
which the Federal share of costs is based.
(c) When EPA authorizes the disposition of program income as described in paragraphs (b)(l) or (2) of this
section, program income in excess of any limits stipulated shall be used in accordance with paragraph
(b)(3) of this section.
(d) In the event that the EPA does not specify in its regulations or the terms and conditions of the award
how program income is to be used, paragraph (b)(3) of this section shall apply automatically to all projects
or programs except research. For awards that support research, paragraph (b)(l) of this section shall apply
automatically unless EPA indicates in the terms and conditions another alternative on the award or the
recipient is subject to special award conditions, as indicated in §30.14.
(e) Unless EPA regulations or the terms and conditions of the award provide otherwise, recipients shall
have no obligation to the Federal Government regarding program income earned after the end of the project
period.
(f) If authorized by EPA regulations or the terms and conditions of the award, costs incident to the
generation of program income may be deducted from gross income to determine program income, provided
these costs have not been charged to the award.
(g) Proceeds from the sale of property shall be handled in accordance with the requirements of the Property
Standards (See §§30.30 through 30.37).
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(h) Unless EPA regulations or the terms and condition of the award provide otherwise, recipients shall have
no obligation to the Federal Government with respect to program income earned from license fees and
royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under
an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply to inventions made under an
experimental, developmental, or research award.
[TOPI
§30.25 Revision of budget and program plans.
(a) The budget plan is the financial expression of the project or program as approved during the award
process. The budget shall include both the Federal and non-Federal share. It shall be related to performance
for program evaluation purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and program plans, and request prior approvals
for budget and program plan revisions, in accordance with this section.
(c) For nonconstruction awards, unless EPA regulations provide otherwise, recipients shall request prior
written approvals from:
(1) The EPA Award Official for the following:
(i) Change in the scope or the objective of the project or program (even if there is no associated budget
revision requiring prior written approval).
(ii) The need for additional Federal funding.
(iii) The inclusion of costs that require prior approval in accordance with OMB Circular A-21, "Cost
Principles for Institutions of Higher Education," OMB Circular A-122, "Cost Principles for Non-Profit
Organizations," or 45 CFR part 74 appendix E, "Principles for Determining Costs Applicable to Research
and Development under Grants and Contracts with Hospitals," or 48 CFR part 31, "Contract Cost
Principles and Procedures," as applicable.
(2) The technical program office for the following:
(i) Change in a key person specified in the application or award document.
(ii) The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the
approved project director or principal investigator.
(iii) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa.
(iv) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of
expense.
(v) Unless described in the application and funded in the approved award, the subaward, transfer or
contracting out of any work under an award. This provision does not apply to the purchase of supplies,
material, equipment or general support services.
t -t rtf\
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(d) No other prior approval requirements for specific items may be imposed unless a deviation has been
approved by OMB.
(e) Except for requirements listed in paragraphs (c)(l)(i) and (ii) of this section, the EPA Award Official
may wai\ e cost-related and administrative prior written approvals required by this pan and OMB cost
principles. For awards that support research, these prior approval requirements are automatically waived
unless:
(1) EPA provides otherwise in the award or agency regulation or
(2) One of the conditions in paragraph (f)(2)(i) of this section applies.
(f) Recipients are authorized without prior approval or a waiver to:
(1) jicur pre-a-.'-ard costs 90 calendar days prior to award.
(i) Pre-award costs incurred more than 90 calendar days prior to award require the prior approval of the
EPA Award Official.
(ii) The applicant must include all pre-award costs in its application.
(iii) The applicant incurs such costs at its own risk (i.e., EPA is under no obligation to reimburse such costs
if for any reason the recipient does not re ve an award or if the award is less than anticipated and
inadequate to cover such costs).
(iv) EPA will only allow pre-award costs without approval if there are sufficient programmatic reasons for
incurring the expenditures prior to the award (e.g., time constraints, weather factors, etc.), they are in
conformance with the appropriate cost principles, and any procurement complies with the requirements of
this rule.
(2) Extend the expiration date of the award one time for up to 12 months.
(i) A one-time extension may not be initiated if:
(A) The terms and conditions of the award prohibit the extension;
(B) The extension requires additional Federal funds; or
(C) The extension involves any change in the approved objectives or scope of the project.
(ii) For one-time extensions, the recipient must notify the EPA Award O.ft>.ial in writing with the
supporting reasons and revised expiration date at least 10 days before the ucpiration date specified in the
award.
(iii) This one-time extension may not be exercised merely for the purpose of using unobligated balances.
(3) Cany forward unobligated balances to subsequent funding periods providing the recipient notifies the
EPA Award Official by means of the Financial Status Report.
(g) The EPA technical program office may, at its option, restrict the transfer of funds among direct cost
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categories or programs, functions and activities for awards in which the Federal share of the project
exceeds 5100,000 and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent
of the total budget as last approved by EPA. Except as provided for at paragraph (c) of this section, for
awards in which the Federal share is less than $100,000 there are no restrictions on transfers of funds
amonn direct cost categories. EPA shall not permit a transfer that would cause any Federal appropriation or
part thereof to be used for purposes other than those consistent with the original intent of the appropriation.
(h) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this
section, do not require prior approval.
(i) For construction awards, recipients shall request prior written approval promptly from EPA for budget
revisions whenever paragraph (h)(l), (2) or (3) of this section applies.
(1) The revision results from changes in the scope or the objective of the project or program.
(2) The need arises for additional Federal funds to complete the project.
(3) A revision is desired which involves specific costs for which prior written approval requirements may
be imposed consistent with applicable OMB cost principles listed in §30.27.
(j) No other prior approval requirements for specific items may be imposed unless a deviation has been
approved by OMB.
(k) When EPA makes an award that provides support for both construction and nonconstruction work, EPA
may require the recipient to request prior approval before making any fund or budget transfers between the
two types of work supported.
0) For both construction and nonconstruction awards, EPA shall require recipients to notify the agency in
writing promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the
recipient for the project period by more than $5000 or five percent of the Federal award, whichever is
greater. This notification shall not be required if an application for additional funding is submitted for a
continuation award.
(m) When requesting approval for budget revisions, recipients shall use the budget forms that were used in
the application unless the EPA indicates that a letter clearly describing the details of the request will
suffice.
(n) Within 30 calendar days from the date of receipt of the request for budget revisions, EPA shall review
the request and notify the recipient whether the budget revisions have been approved. If the revision is stili
under consideration at the end of 30 calendar days, EPA shall inform the recipient in writing of the date
when the recipient may expect the decision.
[TOPI
§30.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher education or other non-profit organizations
(including hospitals) shall be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, "Audits of States, Local
Governments, and Non-Profit Organizations."
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[TOPI
§30.30 Pu rpose of property standards.
Sec:.on* ?'• ?1 through 30.37 set forth uniform standards governing management and disposition of
propem furnished by the Federal Government whose cost was charged to a project supported by a Federal
award. EPA shall require recipients to observe these standards under awards and shall not impose
additional requirements, unless specifically required by Federal statute. The recipient may use its own
property management standards and procedures provided it observes the provisions of §§30.31 through
30.37.
[TOPI
§30.31 Insurance coverage.
Recipients shall, at a minimum, provide the equivalent insurance coverage for real property and equipment
acquired with Federal funds as provided to property owned by the recipient. Federally-owned property need
not be insured unless required by the terms and conditions of the award.
[TOPI
§30.32 Real property.
EPA shall prescribe requirements for recipients concerning the use and disposition of real property
acquired in whole or in part under awards. Unless otherwise provided by statute, such requirements, at a
minimum, shall contain the following.
(a) Title to real property shall vest in the recipient subject to the condition that the recipient shall use the
real property for the authorized purpose of the project as long as it is needed and shall not encumber the
property without approval of EPA.
(b) The recipient shall obtain written approval by EPA for the use of real property in other
federally-sponsored projects when the recipient determines that the property is no longer needed for the
purpose of the original project. Use in other projects shall be limited to those under federally-sponsored
projects (i.e., awards) or programs that have purposes consistent with those authorized for support by EPA.
(c) When the real property is no longer needed as provided in paragraphs (a) and (b) of this section, the
recipient shall request disposition instructions from EPA or its successor Federal awarding agency. EPA
shall observe one or more of the following disposition instructions.
(1) The recipient may be permitted to retain title without further obligation to the Federal Government after
it compensates the Federal Government for that percentage of the current fair market value of the property
attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under guidelines provided by EPA and pay the
Federal Government for that percentage of the current fair market value of the property attributable to the
Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if
any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales
procedures shall be established that provide for competition to the extent practicable and result in the
highest possible return.
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(3) The recipient may be directed to transfer title to the property to the Federal Government or to an
eligible third party provided that, in such cases, the recipient shall be entitled to compensation for its
attributable percentage of the current fair market value of the property.
TTOPI
§30.33 Federally-owned and exempt property.
(a) Federally-owned property. (1) Title to federally-owned property remains vested in the Federal
Government. Recipients shall submit annually an inventory listing of federally-owned property in their
custody to EPA's property management staff. Upon completion of the award or when the property is no
longer needed, the recipient shall report the property to EPA's property management staff for further
utilization.
(2) If EPA has no further need for the property, it shall be declared excess and reported to the General
Services Administration, unless EPA has statutory authority to dispose of the property by alternative
methods (e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710 (I)) to
donate research equipment to educational and non-profit organizations in accordance with Executive Order
12821, "Improving Mathematics and Science Education in Support of the National Education Goals.")
Appropriate instructions shall be issued to the recipient by EPA's property management staff.
(b) Exempt property. When statute-y authority exists, EPA has the option to vest title to property acquired
with Federal funds in the recipient without further obligation to the Federal Government and under
conditions EPA considers appropriate. Such property is "exempt property." Should EPA not establish
conditions, title to exempt property upon acquisition shall vest in the recipient without further obligation to
the Federal Government.
FTOP1
§30.34 Equipment
(a) Title to equipment acquired by a recipient with Federal funds shall vest in the recipient, subject to
conditions of this section.
(b) The recipient shall not u<- ipment acquired with Federal funds to provide services to non-Federal
outside organizations for a fee mat is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the
equipment.
(c) The recipient shall use the equipment in the project or program for which it was acquired as long as
needed, whether or not the project or program continues to be supported by Federal funds and shall not
encumber the property without approval of EPA. When no longer needed for the original project or
program, the recipient shall use the equipment in connection with its other federally-sponsored activities, in
the following order of prior . Activities sponsored by EPA, then activities sponsored by other Federal
awarding agencies.
(d) During the time that equipment is used on the project or program for which it was acquired, the
recipient shall make it available for use on other projects or programs if such other use will not interfere
with the work on the project or program for which the equipment was originally Acquired. First preference
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for such other use shall be given to other projects or programs sponsored by EPA; second preference shall
be given to projects or programs sponsored by other Federal awarding agencies. If the equipment is owned
by the Federal Government, use on other activities not sponsored by the Federal Government shall be
permissible if authorized by EPA. User charges shall be treated as program income.
(e) When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in
or sell the equipment and use the proceeds to offset the costs of the replacement equipment subject to the
approval of EPA.
(f) The recipient's property management standards for equipment acquired with Federal funds and
federally-owned equipment shall include all of the following. " ~ "~
(1) Equipment records shall be maintained accurately and shall include the following information.
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock number, national stock number, or other
identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the equipment was furnished by the Federal Government) and
cost.
(vi) Information from which one can calculate the percentage of Federal participation in the cost of the
equipment (not applicable to equipment furnished by the Federal Government).
(vii) Location and condition of the equipment and the date the information was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data, including date of disposal and sales price or the method used to determine
current fair market value where a recipient compensates EPA for its share.
(2) Equipment owned by the Federal Government shall be identified to indicate Federal ownership.
(3) A physical inventory of equipment shall be taken and the results reconciled with the equipment records
at least once every two years. Any differences between quantities determined by the physical inspection
and those shown in the accounting records shall be investigated to determine the causes of the difference.
The recipient shall, in connection with the inventory, verify the existence, current utilization, and continued
need for the equipment.
(4) A control system shall be in effect to insure adequate safeguards to prevent loss, damage, or theft of the
equipment. Any loss, damage, or theft of equipment shall be investigated and fully documented; if the
equipment was owned by the Federal Government, the recipient shall promptly notify EPA.
(5) Adequate maintenance procedures shall be implemented to keep the equipment in good condition.
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(6) Where the recipient is authorized or required to sell the equipment, proper sales procedures shall be
established which provide for competition to the extent practicable and result in the highest possible return.
(g) When the recipient no longer needs the equipment, the equipment may be used for other activities in
accordance with the following standards. For equipment with a currcn: per unit fair market value of S5000
or more, the recipient may retain the equipment for other uses provided that compensation is made to the
original Federal awarding agency or its successor. The amount of compensation shall be computed by
applying the percentage of Federal participation in the cost of the original project or program to the current
fair market value of the equipment. If the recipient has no need for the equipment, the recipient shall
request disposition instructions from EPA. EPA shall determine whether the equipment can be used to
meet the agency s requirements. If no requirement exists within that agency, the availability of the
equipment shall be reported to the General Services Administration by EPA to determine whether a
requirement for the equipment exists in other Federal agencies. EPA shall issue instructions to the recipient
no later than 120 calendar days after the recipient's request and the following procedures shall govern.
(1) If so instructed or if disposition instructions are not issued within 120 calendar days after the recipient's
request, the recipient shall sell the equipment and reimburse EPA an amount computed by applying to the
sales proceeds the percentage of Federal participation in the cost of the original project or program.
However, the recipient shall be permitted to deduct and retain from the Federal share $500 or ten percent of
the proceeds, whichever is less, for the recipient's selling and handling expenses.
(2) If the recipient is instructed to ship the equipment elsewhere, the recipient shall be reimbursed by the
Federal Government by an amount which is computed by applying the percentage of the recipient's
participation in the cost of the original project or program to the current fair market value of the equipment,
plus any reasonable shipping or interim storage costs incurred.
(3) If the recipient is instructed to otherwise dispose of the equipment, the recipient shall be reimbursed by
EPA for such costs incurred in its disposition.
(4) EPA may reserve the right to transfer the title to the Federal Government or to a third party named by
the Federal Government when such third party is otherwise eligible under existing statutes. Such transfer
shall be subject to the following standards.
(i) The equipment shall be appropriately identified in the award or otherwise made known to the recipient
in writing.
(ii) EPA shall issue disposition instructions within 120 calendar days after receipt of a final inventor/. The
final inventory shall list all equipment acquired with grant funds and federally-owned-equipment. If EPA
fails to issue disposition instructions within the 120 calendar day period, the recipient shall apply ihe
standards of this section, as appropriate.
(iii) When EPA exercises its right to take title, the equipment shall be subject to the provisions for
federally-owned equipment.
[TOPI
§30.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property shall vest ir *he recipient upon acquisition. If there is a
residual inventory of unused supplies exceeding $5000 in tot*. Aggregate value upon termination or
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completion of.the project or program and the supplies are not needed for any other federally-sponsored
project or program, the recipient shall retain the supplies for use on non-Federal sponsored activities or sell
them, but shall, in either case, compensate the Federal Government for its share. The amount of
compensation shall be computed in the same manner as for equipment.
(b) The recipient shall not use supplies acquired with Federal funds to provide services to non-Federal
outside organizations for a fee that is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute as long as the Federal Government retains an interest in the
supplies.
[TOPI
§3036 Intangible property.
(a) The recipient may copyright any work that is subject to copyright and was developed, or for which
ownership was purchased, under an award. EPA reserves a royalty-free, nonexclusive and irrevocable right
to reproduce, publish, or otherwise use the work for Federal purposes, and to authorize others to do so.
(b) Recipients are subject to applicable regulations governing patents and inventions, including
government-wide regulations issued by the Department of Commerce at 37 CFR part 401, "Rights to
Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants,
Contracts and Cooperative Agreements."
(c) The Federal Government has the right to:
(1) Obtain, reproduce, publish or otherwise use the data first produced under an award; and
(2) Authorize others to receive, reproduce, publish, or otherwise use such data for Federal purposes.
(d)(l) In addition, in response to a Freedom of Information Act (FOIA) request for research data relating to
published research findings produced under an award that were used by the Federal Government in
developing an agency action that has the force and effect of law, the EPA shall request, and the recipient
shall provide, within a reasonable time, the research data so that they can be made available to the public
through the procedures established under the FOIA. If the EPA obtains the research data solely in response
to a FOIA request, the agency may charge the requester a reasonable fee equaling the full incremental cost
of obtaining the research data. This fee should reflect costs incurred by the agency, the recipient, and
applicable subrecipients. This fee is in addition to any fees the agency may assess under the FOIA (5
U.S.C. 552(a)(4)(A)).
(2) The following definitions apply for purposes of this paragraph (d):
(i) Research data is defined as the recorded factual material commonly accepted in the scientific
community as necessary to validate research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews, or communications with colleagues. This
"recorded" material excludes physical objects (e.g., laboratory samples). Research data also do not include:
(A) Trade secrets, commercial information, materials necessary to be held confidential by a researcher until
they are published, or similar information which is protected under law; and
(B) Personnel and medical information and similar information the disclosure of which would constitute a
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clearly unwarranted invasion of personal privacy, such as information that could be used to identify a
particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific or technical journal; or
(B) A Federal agency publicly and officially cites the research findings in support of an agency action that
has the force and effect of law.
(iii) Used by the Federal Government in developing an agency action that has the force and effect ofla\ .s
defined as when an agency publicly and officially cites the research findings in support of an agency action
that has the force and effect of law.
(e) Title to intangible property and debt instruments acquired under an award or subaward vests upon
acquisition in the recipient. The recipient shall use that property for the originally-authorized purpose, and
the recipient shall not encumber the property without approval of EPA. When no longer needed for the
originally authorized purpose, disposition of the intangible properly shall occur in accordance with the
provisions of §30.34(g).
[61 FR 6067, Feb. IS, 1996, as amended at 65 FR14407,14417, Mar. 16,2000]
[TOPI
§30.37 Property trust relationship.
Real property, equipment, intangible property and debt instruments that are acquired or improved with
Federal funds shall 'nr; held in trust by the recipient as trustee for the beneficiaries of the project or program
under which the pi nty was acquired or improved. Agencies may require recipients to record liens or
other appropriate nonces of record to indicate that personal or real property has been acquired or improved
with Federal funds and that use and disposition conditions apply to the property.
Procurement Standards
[TOPI
§30.40 Purpose of procurement standards.
Sections 30.41 through 30.48 set forth standards for use by recipients in establishing procedures for the
procurement of supplies and other expendable property, equipment, real property and other services with
Federal funds. These standards are furnished to ensure that such materials and services are obtained in an
effective manner and in compliance with the provisions of applicable Federal statutes and Executive
Orders. No additional procurement standards or requirements shall be imposed by EPA upon recipients,
unless specifically required by Federal statute or Executive Order or approved by OMB.
[TOPI
§30.41 Recipient responsibilities.
The standards contained in this part do not relieve the recipient of the contractual responsibilities arising
under its contract(s). The recipient is the responsible authority, without recourse to EPA, regarding the
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settlement and satisfaction of all contractual and administrative issues arising out of procurements entered
into in support of an award or other agreement. This includes disputes, claims, protests of award, source
evaluation or other matters of a contractual nature. Matters concerning violation of statute are to be referred
to such Federal, State or local authority as may have proper jurisdiction.
[TOPI
§30.42 Codes of conduct
The recipient shall maintain written standards of conduct governing the performance of its employees
engaged in the award and administration of contracts. No employee, officer, or agent shall participate in the
selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of
interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member
of his or her immediate family, his or her partner, or an organization which employs or is about to employ
any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The
officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or
anything of monetary value from contractors, or parties to subagreements. However, recipients may set
standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of
nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations
of such standards by officers, employees, or agents of the recipient.
[TOPI
§30.43 Competition.
All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical,
open and free competition. The recipient shall be alert to organizational conflicts of interest as well as
noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain
trade In order to ensure objective contractor performance and eliminate unfair competitive advantage,
contractors that develop or draft specifications, requirements, statements of work, invitations for bids
and/or requests for proposals shall be excluded from competing for such procurements. Awards shall be
made to the bidder or offerer whose bid or offer is responsive to the solicitation and is most advantageous
to the recipient, price, quality and other factors considered. Solicitations shall clearly set forth all
requirements that the bidder or offerer shall fulfill in order for the bid or offer to be evaluated by the
recipient. Any and all bids or offers may be rejected when it is in the recipient's interest to do so.
[TOPI
§30.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures. These procedures shall provide for, at a
minimum, that paragraphs (a) (1), (2) and (3) of this section apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is made of lease and purchase alternatives to determine which would be
the most economical and practical procurement for the Federal Government.
(3) Solicitations for goods and services provide for all of the following.
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(i) A clear and accurate description of the technical requirements for the material, product or service to be
procured. In competitive procurements, such a description shall not contain features which unduly restrict
competition.
(ii) Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or
proposals.
(iii) A description, whenever practicable, of technical requirements in terms of functions to be performed
or performance required, including the range of acceptable characteristics or minimum acceptable
standards.
(iv) The specific features of "brand name or equal" descriptions that bidders are required to meet when
such items are included in the solicitation.
(v) The acceptance, to the extent practicable and economically feasible, of products and services
dimensioned in the metric system of measurement.
(vi) Preference, to the extent practicable and economically feasible, for products and services that conserve
natural resources and protect the environment and are energy efficient.
(b) Positive efforts shall be made by recipients to utilize small businesses, minority-owned firms, and
women's business enterprises, whenever possible. Recipients of Federal awards shall take all of the
following steps to further ('••:'«? goal.
(1) Ensure that small businesses, minority-owned firms, and women's business enterprises are used to the
fullest extent practicable.
(2) Make information on forthcoming opportunities available and arrange time frames for purchases and
contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women's
business enterprises.
(3) Consider in the contract process whether firms competing for larger contracts intend to subcontract with
small businesses, minority-owned firms, and women's business enterprises.
(4) Encourage contracting with consortiums of small businesses, minority-owned firms and women's
business enterprises when a contract is too large for one of these firms to handle individually.
(5) Use the services and assistance, as appropriate, of such organizations as the Small Business
Administration and the Department of Commerce's Minority Business Development Agency in the
solicitation and utilization of small businesses, minority-owned firms and women's business enterprises.
(6) If the prime contractor awards subcontracts, requiring the contractor to take steps in paragraphs (b)(l)
through (5) of this section.
(c) The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts,
purchase orders, and incentive contracts) shall be determined by the recipient but shall be appropriate for
the particular procurement and for promoting the best interest of the program or project involved. The
"cost-plus-a-percentage-of-cost" or "percentage of construction cost" methods of contracting shall not be
used.
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(d) Contracts shall be made only with responsible contractors who possess the potential ability to perform
successfully under the "terms and conditions of the proposed procurement. Consideration shall be given to
such matters as contractor integrity, record of past performance, financial and technical resources or
accessibility to other necessary resources. In certain circumstances, contracts with certain parties are
restricted by agencies' implementator, of Executive Orders 12549 and 12689, "Debarment and
Suspension."
(e) Recipients shall, on request, make available for EPA, pre-award review and procurement documents,
such as request for proposals or invitations for bids, independent cost estimates, etc., when any of the
following conditions apply.
(1) A recipient's procurement procedures or operation foils to comply with the procurement standards in
EPA's implementation of Circular A-l 10.
(2) The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C. 403 (11)
(currently $100,000) and is to be awarded without competition or only one bid or offer is received in
response to a solicitation.
(3) The procurement, which is expected to exceed the small purchase threshold, specifies a "brand name"
product.
(4) The proposed award over the small purchase threshold is to be awarded to other than the apparent low
bidder under a sealed bid procurement.
(5) A proposed contract modification changes the scope of a contract or increases the contract amount by
more than the amount of the small purchase threshold.
[TOPI
§30.45 Cost and price analysis.
Some form of cost or price analysis shall be made and documented in the procurement files in connection
with every procurement action. Price analysis may be accomplished in various ways, including the
comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost
analysis is the review and evaluation of each element of cost to determine reasonableness, allocability and
allowability.
[TOPI
§30.46 Procurement records.
Procurement records and files for purchases in excess of the small purchase threshold shall include the
following at a minimum: Basis for contractor selection; justification for lack of competition when
competitive bids or offers are not obtained; and basis for award cost or price.
[TOPI
§30.47 Contract administration.
A system for contract administration shall be maintained to ensure contractor conformance with the terms,
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conditions and specifications of the contract and to ensure adequate and timely follow up of all purchases.
Recipients shall evaluate contractor performance and document, as appropriate, whether contractors have
met the terms, conditions and specifications of the contract.
[TOP]
§30.48 Contract provisions.
The recipient shall include, in addition to provisions to define a sound and complete agreement, the
following provisions in all contracts. The following provisions shall also be applied to subcontract
(a) Contracts in excess of the small purchase threshold shall contain contractual provisions or conditions
that allow for administrative, contractual, or legal remedies in instances in which a contractor violates or
breaches the contract terms, and provide for such remedial actions as may be appropriate.
(b) All contracts in excess of the small purchase threshold shall contain suitable provisions for termination
by the recipient, including the manner by which termination shall be effected and the basis for settlement.
In addition, such contracts shall describe conditions under which the contract may be terminated for default
as well as conditions where the contract may be terminated because of circumstances beyond the control of
the contractor.
(c) Except as otherwise required by statute, an award that requires the contracting (or subcontracting) for
construction or facility improvements shall provide for the recipient to follow its own requirements relating
to bid guarantees, performance bonds, and payment bonds unless the construction contract or subcontract
exceeds $100,000. Fc Jiose contracts or subcontracts exceeding $100,000, EPA may accept the bonding
policy and requirements of the recipient, provided EPA has made a determination that the Federal
Government's interest is adequately protected. If such a determination has 'teen made, the minimum
requirements shall be as follows.
(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The "bid guarantee" shall
consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder shall, upon acceptance of his bid, execute such contractual
documents as may be required within the time specified.
(2) A performance bond on the part of the contractor for 100 percent of the contract price. A "performance
bond" is one executed in connection with a contract to secure fulfillment of all the contractor's obligations
under such contract.
(3) A payment bond on the part of the contractor for 100 percent of the contract price. A "payment bond" is
one executed in connection with a contract to assure payment as required by statute of all persons
supplying labor and material in the execution of the work provided for in the contract.
(4) Where bonds are required in the situations described herein, the bonds shall be obtained from
companies holding certificates of authority as acceptable sureties pursuant to 31 CFR part 223, "Surety
Companies Doing Business with the United States."
(d) All negotiated contracts (except those for less than the small purchase threshold) awarded by recipients
shall include a provision to the effect that the recipient, EPA, the Comptroller General of the United States,
or any of their duly authorized representatives, shall have access to any books, documents, papers and
records of the contractor which are directly pertinent to a specific program for the purpose of making
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audits, examinations, excerpts and transcriptions.
(e) All contracts, including small purchases, awarded by recipients and their contractors shall contain the
procurement provisions of the appendix to Circular A-110, as applicable.
Reports and Records
[TOPI
§30.50 Purpose of reports and records.
Sections 30.51 through 30.53 set forth the procedures for monitoring and reporting on the recipient's
financial and program performance and the necessary standard reporting forms. They also set forth record
retention requirements.
[TOPI
§30.51 Monitoring and reporting program performance.
(a) Recipients are responsible for managing and monitoring each project, program, subaward, function or
activity supported by the award. Recipients shall monitor subawards to ensure subrecipients have met the
audit requirements as delineated in §30.26.
(b) EPA shall prescribe the frequency with which the performance reports shall be submitted. Except as
provided in paragraph (f) of this section, performance reports shall not be required more frequently than
quarterly or, less frequently than annually. Annual reports shall be due 90 calendar days after the grant
year; quarterly or semi-annual reports shall be due 30 days after the reporting period. EPA may require
annual reports before the anniversary dates of multiple year awards in lieu of these requirements. The final
performance reports are due 90 calendar days after the expiration or termination of the award.
(c) If inappropriate, a final technical or performance report shall not be required after completion of the
project.
(d) When required, performance reports shall generally contain, for each award, brief information on each
of the following.
(1) A comparison of actual accomplishments with the goals and objectives established for the period,- the
findings of the investigator, or both. Whenever appropriate and the output of programs or projects can bs
readily quantified, such quantitative data should be related to cost data for computation of unit costs.
(2) Reasons why established goals were not met, if appropriate.
(3) Other pertinent information including, when appropriate, analysis and explanation of cost overruns or
high unit costs.
(e) Recipients shall not be required to submit more than the original and two copies of performance reports.
(f) Recipients shall immediately notify EPA of developments that have a significant impact on the
award-supported activities. Also, notification shall be given in the case of problems, delays, or adverse
conditions which materially impair the ability to meet the objectives of the award. This notification shall
include a statement of the action taken or contemplated, and any assistance needed to resolve the situation.
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(g) EPA may make site visits, as needed.
(h) EPA shall comply with clearance requirements of 5 CFR part 1320 when requesting performance data
from recipients.
[TOP]
§30.52 Financial reporting.
(a) The following forms or such other forms as may be approved by OMB are authorized for obtaining
financial information from recipients.
(1) SF-269 or SF-269A, Financial Status Report, (i) EPA shall require recipients to use the SF-269 or
SF-269A to report the status of funds for all nonconstruction projects or programs. However, EPA has the
option of not requiring the SF-269 or SF-269A when the SF-270, Request for Advance or Reimbursement,
or SF-272, Report of Federal Cash Transactions, is determined to provide adequate information to meet its
needs, except that a final SF-269 or SF-269A shall be required at the completion of the project when the
SF-270 is used only for advances.
(ii) EPA shall prescribe whether the report shall be on a cash or accrual basis. If EPA requires accrual
information and the recipient's accounting records are not normally kept on the accrual basis, the recipient
shall not be required to convert its accounting system, but shall develop such accrual information through
best estimates based on an analysis of the documentation on hand.
(iii) EPA shall determine the frequency of the Financial Status Report for each project or program,
considering the ^e and complexity of the particular project or program. However, the report shall not be
r_ ,uired more frequently than quarterly or less frequently than annually. A final report shall be required at
the completion of the agreement.
(iv) EPA shall require recipients to submit the SF-269 or SF-269A (an original and no more than two
copies) no later than 30 days after the end of each specified reporting period for quarterly and semi-annual
reports, and 90 calendar days for annual and final reports. Extensions of reporting due dates may be
approved by EPA upon request of the recipient.
(2) SF-272, Report of Federal Cash Transactions, (i) When funds are advanced to recipients EPA shall
require each recipient to submit the SF-272 and, when necessary, its continuation sheet, SF-272A. EPA
shall use this report to monitor cash advanced to recipients and to obtain disbursement information for each
agreement with the recipients.
(ii) EPA may require forecasts of Federal cash requirements in the "Remarks" section of the report.
(iii) When practical and deemed necessary, EPA may require recipients to report in the "Remarks" section
the amount of cash advances received in excess of three days. Recipients shall provide short narrative
explanations of actions taken to reduce the excess balances.
(iv) Recipients shall be required to submit not more than the original and two copies of the SF-272 15
calendar days following the end of each quarter. EPA may require a monthly report from those recipients
receiving advances totaling SI million or more per year.
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(v) EPA may waive the requirement for submission of the SF-272 for any one of the following reasons:
(A) When monthly advances do not exceed $25,000 per recipient, provided that such advances are
monitored through other forms contained in this section:
(B) If, in EPA's opinion, the recipient's accounting controls are adequate to minimize excessive Federal
advances; or
(C) When the electronic payment mechanisms provide adequate data.
(b) When EPA needs additional information or more frequent reports, the following shall be observed.
(1) When additional information is needed to comply with legislative requirements, EPA shall issue
instructions to require recipients to submit such information under the "Remarks" section of the reports.
(2) When EPA determines that a recipient's accounting system does not meet the standards in §30.21,
additional pertinent information to further monitor awards may be obtained upon written notice to the
recipient until such time as the system is brought up to standard. EPA, in obtaining this information, shall
comply with report clearance requirements of 5 CFR part 1320.
(3) EPA may shade out any line item on any report if not necessary.
(4) EPA may accept the identical information from the recipients in machine readable format or computer
printouts or electronic outputs in lieu of prescribed formats.
(5) EPA may provide computer or electronic outputs to recipients when such expedites or contributes to the
accuracy of reporting.
[TOPI
§30.53 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and access to records for awards to recipients.
EPA shall not impose any other record retention or access requirements upon recipients.
(b) Financial records, supporting documents, statistical records, and all other records pertinent to an award
shall be retained for a period of three years from the date of submission of the final expenditure report or,
for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or
annual financial report, as authorized by EPA. The only exceptions are the following.
(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be
retained until all litigation, claims or audit findings involving the records have been resolved and final
action taken.
(2) Records for real property and equipment acquired with Federal funds shall be retained for 3 years after
final disposition.
(3) When records are transferred to or maintained by EPA, the 3-year retention requirement is not
applicable to the recipient.
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(4) Indirect cost rate proposals, cost allocations plans, etc. as specified in paragraph (g) of this section.
(c) Copies of original records may be substituted for the original records if authorized by EPA.
(d) EPA shall request transfer of certain records to its custody from recipients when it determines that the
records possess long term retention value. However, in order to avoid duplicate recordkeeping, EPA may
make arrangements for recipients to retain any records that are continuously needed for joint use.
(e) EPA, the Inspector General, C -iptroller General of the United States, or any of their duly authorized
representatives, have the right of .ely and unrestricted access to any boo = 'icuments, papers, or other
records of recipients that are pertinent to the awards, in order to make aud . -ninations, excerpts,
transcripts and copies of such documents. This right also includes timely £ enable access to a
recipient's personnel for the purpose of interview and discussion related to sucu documents. The rights of
access in this paragraph are not limited to the required retention period, but shall last as long as records are
retained.
(f) Unless required by statute, EPA shall not place restrictions on recipients that limit public access to the
records of recipients that are pertinent to an award, except when it can be demonstrated that such records
shall be kept confidential anr' would have been exempted from disclosure pursuant to the Freedom of
Information Act (5 U.S.C. 552) if the records had belonged to EPA.
(g) Indirect cost rate proposals, cost allocations plans, etc. Paragraphs (g)(l) and (g)(2) of this sectiun apply
to the following types of documents, and their supporting records: indirect cost rate computations or
proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular
group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates).
(1) If 'submitted for negotiation. If the recipient submits to EPA or the subrecipient submits to the recipient
the proposal, plan, or other computation to form the basis for negotiation of the rate, then the 3-year
retention period for its supporting records starts on the date of such submissio-
(2) If not submitted for negotiation. If the recipient is not required to submit to £PA or the subrecip^nt is
not required to submit to the recipient the proposal, plan, or other computation for negotiation pu,\xises,
then the 3-year retention period for the proposal, plan, or other computation and its supporting recr.ids
starts at the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other
computation.
FTOPI
§30.54 Quality assurance.
If the project officer de> "nines that the grantee's project involves environmentally related measure™?nts
or data generation, the grantee shall develop and implement quality assurance practices consisting o.
policies, procedures, specifications, standards, and documentation sufficient t<~ nroduce data of quality
adequate to meet project objectives and to minimize loss of data due to out-oi-control conditions or
malfunctions. The quality system must comply with the requirements of ANSI/ASQC E4, "Specifications
and Guidelines for Quality Systems for Environmental Data Collection and Environmental Technology
Programs", which may be obtained from the National Technical Information Service (NTIS), 5885 Port
Royal Road, Springfield, VA 22161.
Termination and Enforcement
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for hearing, appeal, or other administrative proceeding to which the recipient is entitled under any statute or
regulation applicable to the action involved. EPA's Dispute Provisions found at 40 CFR part 31, subpart F,
Disputes, are applicable to assistance awarded under the provisions of this part.
(el Etifcis oi suspension and termination. Costs of a recipient resulting from obligations incurred by the
recipient during a suspension or after termination of an award are not allowable unless EPA expressly
authorizes them in the notice of suspension or termination or subsequently. Other recipient costs during
suspension or after termination which are necessary and not reasonably avoidable are allowable if
paragraphs (c)(l) and (2) of this section apply.
(1) The costs result from obligations which were properly incurred by the recipient before the effective date
of suspension or termination, are not in anticipation of it, and in the case of a termination, are
noncancellable.
(2) The costs would be allowable if the award were not suspended or expired normally at the end of the
funding period in which the termination takes effect.
(d) Relationship to debarment and suspension. The enforcement remedies identified in this section,
including suspension and termination, do not preclude a recipient from being subject to debarment and
suspension under Executive Orders 12549 and 12689 and EPA's implementing regulations (see §30.13).
[TOP]
§30.63 Disputes.
(a) Disagreements should be resolved at the lowest possible level.
(b) If an agreement cannot be reached, the EPA disputes decision official will provide a written final
decision. The EPA disputes decision official is the individual designated by the award official to resolve
disputes concerning assistance agreements. If the dispute cannot be resolved the procedures outlined at 40
CFR part 31, subpart F, should be followed.
Subpart D — After-the-Award Requirements
ITOP1
§30.70 Purpose.
Sections 30.71 through 30.73 contain closeout procedures and other procedures for subsequent
disallowances and adjustments.
[TOPI
§30.71 Closeout procedures.
(a) Recipients shall submit, within 90 calendar days after the date of completion of the award, all financial,
performance, and other reports as required by the terms and conditions of the award. EPA may approve
extensions when requested by the recipient.
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(b) Unless EPA authorizes an extension, a recipient shall liquidate all obligations inclined under the award
not later than 90 calendar days after the funding period or the date of completion as specified in the terms
and conditions of the award or in agency implementing instructions.
(c) EPA shall make prompt payments to a recipient for allowable reimbursable costs under the award being
closed out.
(d) The recipient shall promptly refund any balances of unobligated cash that EPA has advanced or paid
and that is not authorized to be retained by the recipient for use in other projects. OMB Circular A-129
governs unretumed amounts that become delinquent debts.
(e) When authorized by the terms and conditions of the award, EPA shall make a settlement for any
upward or downward adjustments to the Federal share of costs after closeout reports are received.
(f) The recipient shall account for any real and personal property acquired with Federal funds or received
from the Federal Government in accordance with §§30.31 through 30.37.
(g) In the event a final audit has not been performed prior to the closeout of an award, EPA shall retain the
right to recover an appropriate amount after fully considering the recommendations on disallowed costs
resulting from the final audit.
[TOPI
§30.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following.
(1) The right of EPA to disallow costs and recover funds on the basis of a later audit or other review.
(2) The obligation of the recipient to return any funds due as a result of later refunds, corrections, or other
transactions.
(3) Audit requirements in §30.26.
(4) Property management requirements in §§30.31 through 30.37.
(5) Records retention as required in §30.53.
(b) After closeout of an award, a relationship created under an award may be modified or ended in whole or
in part with the consent of EPA and the recipient, provided the responsibilities of the recipient referred to
in §30.73(a), including those for property management as applicable, are considered and provisions made
for continuing responsibilities of the recipient, as appropriate.
[TOPI
§30.73 Collection of amounts due.
(a) Any funds paid to a recipient in excess of the amount to which the recipient is finally determined to be
entitled under the terms and conditions of the award constitute a debt to the Federal Government. If not
paid within a reasonable period after the demand for payment, EPA may reduce the debt by paragraph (a)
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(1), (2) or (3) of this section.
(1) Making an administrative offset against other requests for reimbursements.
(2) Withholding advance payment otherwise due to the recipient.
(3) Taking other action permitted by statute.
(b) Except as otherwise provided by law, EPA shall charge interest on an overdue debt in accordance with
4 CFR chapter n, "Federal Claims Collection Standards."
Appendix to Part 30 - Contract Provisions
All contracts awarded by a recipient, including small purchases, shall contain the following provisions as applicable:
1. Equal Employment Opportunity - All contracts shall contain a provision requiring compliance with Executive Order 11246,
"Equal Employment Opportunity," as amended by Executive Order 11375, "Amending Executive Order 11246 Relating to Equal
Employment Opportunity," and as supplemented by regulations at 41 CFR part 60, "Office of Federal Contract Compliance
Programs, Equal Employment Opportunity, Department of Labor."
2. Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40 U.S.C. 276c) - All contracts and subgrants in excess of $100,000 for
construction or repair awarded by recipients and subrecipients shall include a provision for compliance with the Copeland
"Ann-Kickback" Act (18 U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR part 3, "Contractors and
Subcontractors on Public Building or Public Work Financed in Whole or in Pan by Loans or Grants from the United States").
The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in
the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled.
The recipient shall report all suspected or reported violations to EPA.
3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7) — When required by Federal program legislation, all construction
contracts awarded by the recipients and subrecipients of more than $2000 shall include a provision for compliance with the
Davis-Bacon Act (40 U.S.C. 276a to a-7) and as supplemented by Department of Labor regulations (29 CFR part S, "Labor
Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction"). Under this Act,
contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a
wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a
week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each
- solicitation and the award of a contract shall be conditioned upon die acceptance of the wage determination. The recipient shall
report all suspected or reported violations to EPA.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333) - Where applicable, all contracts awarded by recipients
in excess of $100,000 for construction contracts and in excess of $2500 for other contracts that involve the employment of
mechanics or laborers shall include a provision for compliance with sections 102 and 107 of me Contract Work Hours and Safety
Standards Act (40 U.S.C. 327-333), as supplemented by Department of Labor regulations (29 CFR part 5). Under section 102 of
the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work
week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of
not less than 1/2 times the basic rate of pay for all hours worked in excess of 40 hours in the work week. Section 107 of the Act
is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under
working conditions which are unsanitary, hazardous 01 dangerous. These requirements do not apply to the purchases o pphes
or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.
5. Rights to Inventions Made Under a Contract or Agreement — Contracts or agreements for the performance of experimental,
developmental, or research work shall provide for the rights of the Federal Government and the recipient in any resulting
invention in accordance with 37 CFR part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business
Firms Under Government Grants, Contracts and Cooperative Agreements," and any implementing regulations issued b> 'A.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), as amended -
Contracts and subgrants of amounts in excess of SI 00,000 shall contain a provision that requires the recipient to agree to comply
with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal
Water Pollution Control Act as amended (33 U.S.C. 1251 etseq.). Violations shall be reported to the Regional Office of the
Environmental Protection Agency (EPA).
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7 Bviti Ann-Lobbying Amendment (31 U.S.C. 1352) - Contractors who apply or bid for an award of more than $100,000 shall
file die required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated ftinds to
oav anv person or organization for influencing or attempting to influence an officer or employee of any agency, a member of
Congress officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal
contracTOTnt or any other award covered by 31 U.S.C. 1352. Each tier shall also diwlos: «> lobbying with non-Federal funds
that take's place in connection with obtaining any Federal award. Such disclosures are Ibr^drdtrd trom ucr 10 tier up to the
recipient.
8 Debannent and Suspension (Executive Orders 12549 and 12689) - No contract shall be made to parties listed on the General
Services Administration's List of Parties Excluded from Federal Procurement or Nonprocurement Programs in accordance with
Executive Orders 12549 and 12689, "Debannent and Suspension." This list contains the names of parties debarred, suspended,
or otherwise excluded by agencies, and contractors declared ineligible under statutory or regulatory authority other man -
Executive Order 12549. Contractors with awards mat exceed me small purchase threshold shall provide the required certification
regarding its exclusion status and mat of its principal employees.
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OFFICE OF MANAGEMENT AND BUDGET
Cost Principles for Non-Profit Organizations
AGENCY: Office of Management and Budget
ACTION: Final revision of OMB Circular A-122, "Cost Principles for Non-Profit Organizations"
SUMMARY: The Office of Management and Budget (OMB) revises OMB Circular A-122 by
amending the definition for equipment; requiring the breakout of indirect costs into two categories
(facilities and'administration) for certain non-profit organizations; modifying the multiple allocation
basis; and, clarifying the treatment of certain cost items.
DATES: The revision is effective on June 1, 1998.
FOR FURTHER INFORMATION CONTACT: Federal agencies should contact Gilbert Tran, Office
of Federal Financial Management, Office of Management and Budget, (202) 395-3993. Non-Federal
organizations should contact the organization's Federal cognizant agency.
SUPPLEMENTARY INFORMATION:
A. Background
On October 6, 1995, the Office of Management and Budget (OMB) issued a final revision to OMB
Circular A-122 "Cost Principles for Non-Profit Organizations," in the Federal Register (60 FR 52516)
regarding interest aUowability. The revision was made in a continuing effort to increase consistency
across OMB's cost principles circulars A-122, A-21, "Cost Principles for Educational Institutions, and
A 87 "Cost Principles for State, Local and Indian Tribal Governments." To further the goals of
consistency OMB proposed on the same date (60 FR 52522) to revise the definition of equipment, to
clarify the treatment of certain types of costs, to modify the multiple allocation base method for
computing indirect cost rate(s), and to place an upper-limit on payments of administrative expenses for
certain non-profit organizations.
With this final revision, Circular A-122 consists of the Circular as issuedin 1980 (45 FR 46022; July ff,
1980) « amended in 1984 (49 FR 18260; April 27,1984), in 1987 (52 FR 19788; May 27,1987), in
995(60 FR 52516; October 6, 1995), in 1997 (62 FR 45934; August 29,1997), and in this nonce. A
recompilarion of the entire Circular A-122, with all its amendments, accompanies the nouce and is
available in electronic form on the OMB Home Page at http://www.wtotehouse.gov/WH/EOP/omb.
B. Current Revisions
Circular A-122 is revised in this notice to:
1 Amend the definition of equipment by increasing the capitalization threshold to the lesser amount
used for financial statement purposes or $5,000 (see paragraph 15).
2 Reouire major non-profit organizations (those receiving more than $10 million in direct Federal
funding) to report indirect cost rates by two major component categories: facilities and administration
(see paragraph D, Attachment A).
3 Modify the multiple allocation base method (MAB) to be consistent with OMB Circular A-21 (see
paragraph D 3). However, major non-profit organizations are not required to use the multiple allocation
basemethod. MAB remains one of the three available methodologies for computing indirect costs.
4 Clarify the treatment of the following cost items to provide consistency across OMB's cost principles
circulars (A-21 and A-87) and the Federal Acquisition Regulations, where applicable:
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Alcoholic beverages
Advertising and public relations costs
Organization-furnished automobiles
Defense and prosecution of criminal and civil proceedings, claims, appeals and patent
infringements
Housing and living expenses
Insurance
Memberships
Selling or marketing of goods and services
Severance pay for foreign nationals
OMB is not implementing the proposed restrictions on trustees' travel expenses at non-profit
organizations. In line with this decision, and to further consistency between cost circulars OMB will be
amending Circular A-21 to allow trustees' travel expenses.
OMB defers considering an upper-limit on payment of administrative expenses until better data on
indirect costs at non-profit organizations are collected. ^^
C. Comments and Responses
OMB received about 185 comments from non-profit organizations, Federal agencies professional
organizations and accounting firms. A summary of comments and OMB's responses are included in this
nonce. Several comments resulted in modifications to OMB's original proposal.
The comments and OMB's responses are summarized by section as follow.
Equipment Definition
Comment: Clarification is needed on the treatment of depreciation of those assets which had costs
between the old $500 threshold and the new $5,000.
Response: In order to clarify the accounting for the undepreciated portion of any equipment costs as a
result of a change in capitalization levels, paragraph 15 has been added to explain that the undepreciated
amount may be recovered by continuing to claim otherwise allowable use allowances or depreciation on
the equipment, or by amortizing the amount to be written off over a period of years as neeotiated with
the Federal cognizant agency. *«^uua«wwiui
Comment: Clarification is needed on whether equipment under the $5,000 threshold, as established by
the non-profit organizations' policy, requires Federal approval prior to acquisition.
Response: Equipment under the $5,000 threshold, as established by the non-profit organization's policy
can be directly charged to sponsored agreements (subparagraph 15.b) without prior Federal approval.
Comment: Current subparagraph 13.b requires prior approval for special purpose equipment as direct
«S™n » a "P cost $1'°°° or more- Taj8 requirement is not consistent with the higher threshold of
$5,000 allowed in the proposed revision. This requirement should be revised to be consistent witf th*
proposed revision.
Response: OMB agrees. The Circular is revised to require prior Federal approval only for special
purpose equipment with a unit cost of $5,000 or more.
Unallowable Cost Items
These ten revised cost items are already unallowable under OMB Circulars A-21, "Cost Principles for
Educational Insntutions," and A-87, "Cost Principles for State, Local and Indian Tribal Government "
and/or the Federal Acquisition Regulations. OMB addressed the issue of trustees' travel in response to
the comments received. For the other items, consistency across Federal cost regulations was a more
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significant issue than most of the commenters' concerns. Comments related to specific cost items are
presented below, followed by OMB's responses.
Advertising and Public Relations Costs
Comment: Current paragraph 37, Public information service costs, should be combined with the
"Advertising" paragraph to be consistent with other OMB cost principles in Circulars A-21 and A-87.
Response- The commenter is correct. The treatment of public information service costs is now addressed
in revised paragraph I, Advertising and public relations costs. Current paragraph 37 is deleted.
Comment: Clarify the types of activities that are allowable as public relations costs. Public relations
costs to carry out certain functions, such as legitimate program outreach, that are required under
sponsored programs and contracts should be allowable.
Response: The Circular is revised to clarify that certain public relations costs for the purpose of
communicating specific activities related to the sponsored programs to the public or the press are
allowable costs. When they are necessary for program outreach effort as required by sponsored
programs, public relations costs are allowable. Costs of advertising and public relations incurred solely
to promote the organization are unallowable.
Comment: Clarify whether advertising media costs such as radio and television are allowable.
Response: As long as the public relations costs are specifically required by the sponsored programs or
are related to the promotion of sponsored programs, any reasonable advertising media, including
magazines, newspapers, radio, television, direct mail, exhibits, and the like, can be used and its costs are
allowable. See paragraph l.a.
Comment: Community relation costs should be allowable as pan of program outreach effort for Federal
sponsored programs.
Response: Community relations are defined in subparagraph l.b as "those activities dedicated to
maintain the image of the organization or promoting understanding and favorable relations with the
community or public at large or any segment of the public." Costs related to community relations are
allowable when the costs are required or necessary to the performance of the sponsored programs.
Organization-furnished automobiles for personal use
Comment: For security and economic reasons, non-profit organizations often furnish automobiles and
housing for its personnel working on Federal projects (e.g., overseas projects sponsored by the U.S.
Agency for International Development or the U.S. State Department). These costs should be allowable
as direct costs.
Response: The Circular is revised to allow these costs when they are necessary to perform the Federal
projects particularly the overseas sponsored projects with prior approval by the Federal awarding
agency. These costs are allowable only as direct costs to the Federal projects, and not as fringe benefit
or indirect costs.
Comment: The Circular should specify which types of automobiles are allowable or unallowable (e.g.,
cars, vans, trucks and buses).
Response- The types of automobiles are irrelevant for the purpose of determining the allowability of
automobile costs Rather, the determinant factors should be whether the automobile costs are reasonable
and necessary for the performance of the Federal projects and authorized by the Federal awarding
agency.
Defense and prosecution of criminal and civil proceedings, claims, appeals and patent
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infringements
Comment: Current paragraph 35.d, Professional service costs, should be combined with new paragraph
Response: OMB agrees. Current paragraph 35.d is deleted. Professional service costs related to defense
of antitrust suits, prosecution of claims against the Federal Government and patent infringement
litigation are discussed in new paragraph 10. Professional service costs incurred for organization and
reorganization are discussed in paragraph 31, Organization costs.
Comment: Clarification is needed as to when legal costs related to claims, appeals or proceeding
become unallowable. Commenters noted that Federal agencies are inconsistent in the determination of
the alienability of legal costs as one agency would allow legal costs up to the point where the case goes
out of the Federal agency appeal process and to the courts, whereas other agencies would only allow
legal costs through the first phase of appeals within the Federal agency.
Response: The policy makes unallowable legal and related costs for either defending against claims
made by the Federal Government or prosecuting claims against the Government As such, once a final
management decision letter is issued by the agency (for example, a disallowance letter), all legal and
related costs are unallowable from that point forward. Unallowable costs would include claims and
defenses pursued through agencies' formal appeal procedures such as administrative law judges and
agency appeal boards. Note that legal and related costs may be allowable if the non-profit organization's
position is sustained by the administrative appeal process or an agreement is reached between the
organization and the Federal Government (see subparagraghs lO.b, lO.c, lO.d and lO.e). This revision is
4»M«»M«M+^W** ••••*!• *1*M 1 *»• ^» • m •i • - -* Z__ ^^fc ^T* f** 1 A ^« Ul^* . W^ • • • t* «• • • _
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consistent with the language contained in OMB Circular A-21, "Cost Principles for Educational
Institutions."
Comment: Some commenters objected to the proposed 80 percent limitation on reimbursement when
the institution is found innocent.
Response: The proposed revision was retained because it provides consistency with procurement
contracts. This limitation is based on the statutory language of Public Law 100-700, Major Fraud Act of
1988, November 19,1988 (41 U.S.C., 256 (k)(5)), which only allows recovery of 80 percent of the
legal costs.
Comment: Legal expenses to defend against lawsuits brought by a foreign government for violation of
that country's law should be allowable.
Response: The Circular is revised in subparagraph lO.d to authorize Federal agencies to allow legal
expenses to defend against lawsuits brought by a foreign government for violation of its law when such
costs were necessary or were direct results of the performance of Federal sponsored programs. The same
authorizations apply for legal costs for defense against lawsuits brought by state or local governments.
Comment: Legal fees to defend against lawsuits filed by former employees for termination or by
subrecipients should be allowable.
Response: Legal fees incurred in defense of lawsuits not brought by a Federal, State, local or foreign
government, except when the suits are brought by former employees under Section 2 of the Major Fraud
Act of 1988 (Pub. L. 100-700), are allowable.
Housing and living expenses
Comment: For security and economic reasons, non-profit organizations often furnish automobiles and
housing for its personnel working on overseas Federal projects (e.g., overseas projects sponsored by the
U.S. Agency for International Development). These costs should be allowable as direct costs.
Response: As previously noted (in the discussion of automobiles), the Circular is revised to allow these
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costs when they are necessary to perform die Federal projects and when they are approved by the
Federal awarding agency. These costs are allowable only as direct costs to the Federal projects, and not
as fringe benefit or indirect costs.
Insurance
Comment: General and casualty liability insurance costs for organization's directors and administrators
should be allowable.
Response: General and casualty liability insurance costs for organization's directors and administrators
are allowable, subject to limitations, as described in subparagraph 22.a.(2). New subparagraph
22.a.(2).f, Insurance against defects, prohibits the reimbursement of costs against Federally sponsored
awards for product (or services) liability insurance costs.
Comment: Medical liability insurance costs for participants in Federal training programs should be
allowable.
Response: Medical liability insurance costs associated with participants in Federal training programs are
allowable to Federal programs as direct costs.
Comment: Malpractice insurance costs for physicians should be direct charged to Federal programs
while malpractice insurance costs for nurses or laboratory assistants, which are immaterial in most
cases, should be charged as indirect costs.
Response: Subparagraph B.2 of Attachment A provides that when a direct cost is of minor amounts, it
may be treated as an indirect cost for reasons of practicality and efficiency, provided that the accounting
treatment for such cost is consistently applied to all final cost objectives. Therefore, when malpractice
insurance costs for nurses or lab technicians are immaterial in relation to its effect on the overall indirect
cost rates of the organization, they may be treated as indirect costs.
Memberships
Comment: Membership costs in civic and community organizations should be allowable.
Response: Membership costs are allowable for business and professional organizations. The Circular is
further revised to allow membership costs in civic and community organizations when associations with
these organizations are essential to the performance of the Federal programs (as an outreach function).
These membership costs must be approved by the Federal cognizant agency.
Comment: Costs of membership in organizations that lobby should be unallowable.
Response: Paragraph 25 of the Circular disallows lobbying costs. Membership dues to lobbying
organizations are rnerefore unallowable. The unallowable portion of membership dues is determined by
the percentage of lobbying activities versus other allowable activities of the lobbying organization.
Selling or Marketing of Goods and Services
Comment: Clarification is needed for what types of activities are considered to be the selling or
; of goods and services.
Response: Selling or marketing of goods and services generally include an organization's efforts to
market the organization's products or services such as through advertising, organizational image
enhancement, market planning and direct selling. Direct selling efforts are those acts or actions used to
induce particular customers to purchase particular products or services of the organization. The
allowability provisions for advertising costs are described in paragraph 1.
Comment: The guidelines for selling or marketing of goods and services should be consistent with those
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inFAR31.205.38(c)(l).
Response: FAR 31.205 38(c)(l) allow direct selling costs at commercial contractors if thev are
reasonable in amount. By contrast to the commercial contract context, direct selling Tcoste aTe^
not considered to be necessary costs for the performance of Federal
organizations In those cases where they are essential for certain FedeVal sponsored
"1 """ " * *" tpand - '* «
Comment: Given that the Bayh-Dole Act encouraged technology transfer, selling or marketing costs o
SfnJSSSS^ COSBi At ** minimum' *•* costs ^^^ 3o33f iSS
^SSS5 2,lS^ * "^^ «° ^T ""mg or marketing costs as direct costs to some Federal
sponsored programs when approved by the Federal awarding agency. "euenu
Severance Pay
Comment: Early retirement benefits should be allowable costs.
Response: Early retirement benefit costs are allowable costs, subject to limitations, and are discussed in
subparagraph 6.f, Fnnge Benefits, along with other forms of fringe benefits. Paragraph 49 Severance
Pa deals onl with seve ' oeverance
., , enets. aragrap
Pay, deals only with severance policy, i.e., dismissal, and the reimbursement of ite costs.
Comment: Guidelines for costs of severance pay to foreign nationals in excess of customary or
oTl994ff ASA)"* a*0818"9" wth section 2151 of the Federal Acquisition Streamlining Act
Response: OMB agrees. The Circular is revised to be consistent with FASA guidelines for severance
pay to foreign nationals in excess of customary or prevailing practices. As a result, the Federal^afdine
agency may allow these costs when they are necessary forAe performance of the Fe^raUpons^ed 8
rora r^
programs.
Trustees' Travel
Comment: Several commenters opposed the proposal to disallow trustees' travel costs citing the
difficulty of retaining or obtaining members to serve voluntarily on the Board of TrusteeTfor Directors)
of a non-profit organization, if Board members have to pay for their own travel expenses to attend
Board meetings. The commenters added that since serving on a non-profit organization's Board is often
not as prestigious and desirable as serving on a University's Board (where trStees' travel cos? are
unallowable under Circular A-2 1 ), non-reimbursement of the travel costs would inhibit the recruitment
or Board members.
Response: OMB concurs that disallowing the reimbursement of trustees' travel costs could inhibit the
recruitment of qualified Board members (particularly at smaller non-profit organizations) thercbv
hampering the operations of a non-profit organization. OMB also recognizes that trustees' travel cos'
are reasonable and necessary business costs. As a result, trustees' travel costs remain allowable.
Comment: Trustees' travel costs should be allowable if they are reasonable. Some suggested tests for
reasonableness of trustees' travel costs are: limit number of allowed trips per year, refuiciion of trips 10
organization s principal place of business or reasonable surroundings, distinction between schedui • <
Board meeongs and emergency Board meetings, and disallowance of first-class airfare travels.
Response: All costs charged to Federal projects must satisfy a reasonableness test. Although some tf the
suggested reasonableness tests appear to be good, OMB does not believe it is necessary afthi< tinn ^
impose specific restrictions on trustees' travel expenses. The reasonableness of a particular travel '
expense remains at the judgement of Federal negotiators.
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Comment: At Head Stan organizations, some Trustee members are first sent for training in the
operations of a Head Start program. These travel costs related to training should be allowable.
Response: Travel costs related to training and education are allowable, subject to limitations, and are
addressed in paragraph 53 of the Circular, Training and education costs.
Comment: At Head Start organizations, there often are several advisory boards in addition to the Board
of Trustees (or Directors). These advisory boards are involved in day-to-day operations of the
organizations and often incur travel costs. Are these costs subject to the same restrictions as trustees'
travel?
Response: Travel costs for members of advisory groups are allowable, subject to the limitations in
paragraph 55, Travel costs.
Multiple Allocation Basis (MAB)
Comment: The multiple allocation method for calculating indirect costs rates is much more complicated
and burdensome than the simplified method and it will cost non-profit organizations much more to
prepare the indirect cost proposal. Several commenters recommended the flexibility of using one of the
three different allocation methods as they are currently described in the Circular. Tne multiple allocation
basis (MAB) should remain an optional allocation methodology rather than a required methodology for
certain organizations.
Response: The use of MAB for major non-profit organizations promotes consistency in the calculation
and the reporting of indirect costs. It would facilitate the accumulation of indirect cost data by cost
components (i.e., facilities and administration) and provide comparable rates between major research
non-profit organizations and universities. However, OMB recognizes that a conversion to MAB may
require some substantial changes in the organization's accounting system and that MAB is not practical
for single-function organizations. Therefore, the Circular continues to allow non-profit organizations to
use any of the current three allocation methodologies.
Comment: Several commenters suggested raising the threshold for the requirement to $25 million in
direct Federal funding. Several commenters also suggested an exemption from this requirement for
single-function organizations regardless of Federal funding levels.
Response: The Circular is revised to allow the use of the current three allocation methodologies for all
non-profit organizations. For organizations that receive more than $10 million in direct Federal funding,
a breakout of indirect costs into two components, facilities and actainistration, is required regardless of
the selected allocation methodology.
Comment: The allocation methodology for general administration under MAB on the basis of modified
total direct costs conflicts with the required methodology under Cost Accounting Standard (CAS) 410
applicable to contracts using the salaries and wages basis. One commenter suggested that a fully
CAS-covered non-profit organization be exempted from the MAB requirement.
Response: MAB is not a requirement for non-profit organizations and remains one of the three available
methodologies in the Circular for computing indirect costs. In addition, CAS-covered non-profit
organizations should continue to follow CAS with respect to the measurement, assignment and
allocation of costs.
Comment: The revision should clarify that the modified total direct cost base should only include the
first $25,000 of a subcontract regardless of the period during which the project is started (consistent
with OMB Circular A-21).
Response: The modified total direct cost base, described in subparagraph D.3.f of the Circular, includes
the first $25,000 of each subgrant or subcontract regardless of the period covered by the subgrant or
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subcontract. Subgrant or subcontract costs above $25,000 shall be excluded from the modified total
direct cost base. For example, for a $300,000 subgrant that lasts three years, only the first $25 000
incurred on the award should be included in the modified total direct cost base. '
Administrative Cap of 26 percent
Comment: Most commenters strongly opposed the 26 percent administrative cap stating that such
limitation on cost reimbursement is arbitrary, capricious, and unnecessary. Some argued that a cap
would be financially disastrous to non-profit organizations because they receive most of their funding
from Federal sources (unlike universities). A detailed analysis is urged to determine the average^
administrative costs applicable to non-profit organizations, if an administrative cap is to be imDlemented
at non-profit organizations. H«=m«ucu
Response: Based on the comments against the implementation of an administrative cap at non-profit
organizations, OMB defers the consideration of establishing any administrative cap until better data on
indirect costs at non-profit organizations can be collected. If OMB believes mat an administrative cap
should be implemented, it would be proposed in a subsequent notice.
Other
Comment: Attachment C of the Circular should be updated since a few listed organizations no longer
exist.
Response: OMB agrees. Attachment C is updated to delete those organizations that no longer exist or
are no longer exempted from OMB Circular A-122.
Franklin D. Raines
Director
Attachments A, B and C of Circular A-122 are revised as follows:
A. Attachment A
1. Add subparagraph 3 to paragraph C ("Indirect Costs").
3. mdirect costs shall be classified within two broad categories: "Facilities" and "Administration."
"Facilities" is defined as depreciation and use allowances on buildings, equipment and capital
improvement, interest on debt associated with certain buildings, equipment and capital improvements
and operations and maintenance expenses. "Administration" is defined as general administration and '
general expenses such as the director's office, accounting, personnel, library expenses and all other types
of expenditures not listed specifically under one of the subcategories of "Facilities" (including cross
allocations from other pools, where applicable). See indirect cost rate reporting requirements in
subparagraphs D.2.e and D.3.g.
2. Add subparagraph 2.e to paragraph D.
e. For an organization that receives more than $10 million in Federal funding of direct costs in a fiscal
year, a breakout of the indirect cost component into two broad categories, Facilities and Administration
as defined in subparagraph C.3, is required. The rate in each case shall be stated as the percentage which
the amount of the particular indirect cost category (i.e., Facilities or Administration) is of the
distribution base identified with that category.
3. Replace subparagraph D.3 with the following:
3. Multiple allocation base method.
a. General. Where an organization's indirect costs benefit its major functions in varying degrees, indirect
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costs shall be accumulated into separate cost groupings, as described in subparagraph b. Each grouping
shall then be allocated individually to benefitting functions by means of a base which best measures the
relative benefits. The default allocation bases by cost pool are described in subparagraph c.
b. Identification of indirect costs Cost groupings shall be established so as to permit the allocation of
each grouping on the basis of benefits provided to the major functions. Each grouping shall constitute a
pool of expenses that are of like character in terms of functions they benefit and in terms of the
allocation base which best measures the relative benefits provided to each function. The groupings are
classified within the two broad categories: "Facilities" and "Administration," as described in
subparagraph C.3. The indirect cost pools are defined as follows:
( 1 ) Depreciation and use allowances. The expenses under this heading are the portion of the costs of the
organization's buildings, capital improvements to land and buildings, and equipment which are
computed in accordance with paragraph 1 1 of Attachment B ("Depreciation and use allowances").
(2) Interest. Interest on debt associated with certain buildings, equipment and capital improvements are
computed in accordance with paragraph 23 of Attachment B ("Interest, fund raising, and investment
ag^mfpt COSts").
(3) Operation and maintenance expenses. The expenses under this heading are those that have been
incurred for the administration, operation, maintenance, preservation, and protection of the
organization's physical plant. They include expenses normally incurred for such items as: janitorial and
utility services; repairs and ordinary or normal alterations of buildings, furniture and equipment; care of
grounds; maintenance and operation of buildings and other plant facilities; security; earthquake and
disaster preparedness; environmental safety; hazardous waste disposal; property, liability and other
insurance relating to property; space and capital leasing; facility planning and management; and, central
receiving. The operation and maintenance expenses category shall also include its allocable share of
fringe benefit costs, depreciation and use allowances, and interest costs.
(4) General administration and general expenses. The expenses under this heading are those that have
been incurred for the overall general executive and administrative offices of the organization and other
expenses of a general nature which do not relate solely to any major function of the organization. This
category shall also include its allocable share of fringe benefit costs, operation and maintenance
expense, depreciation and use allowances, and interest costs. Examples of this category include central
offices, such as the director's office, the office of finance, business services, budget and planning,
personnel, safety and risk management, general counsel, management information systems, and library
costs.
In developing this cost pool, special care should be exercised to ensure that costs incurred for the same
purpose in like circumstances are treated consistently as either direct or indirect costs. For example,
salaries of technical staff, project supplies, project publication, telephone toll charges, computer costs,
travel costs, and specialized services costs shall be treated as direct costs wherever identifiable to a
particular program. The salaries and wages of administrative and pooled clerical staff should normally
be treated as indirect costs. Direct charging of these costs may be appropriate where a major project or
activity explicitly requires and budgets for administrative or clerical services and other individuals
involved can be identified with the program or activity. Items such as office supplies, postage, local
telephone costs, periodicals and memberships should normally be treated as indirect costs.
c. Allocation bases. Actual conditions shall be taken into account in selecting the base to be used in
allocating the expenses in each grouping to benefitting functions. The essential consideration in
selecting a method or a base is that it is the one best suited for assigning the pool of costs to cost
objectives in accordance with benefits derived; a traceable cause and effect relationship; or logic and
reason, where neither the cause nor the effect of the relationship is determinable. When an allocation
can be'made by assignment of a cost grouping directly to the function benefited, the allocation shall be
made in that manner. When the expenses in a cost grouping are more general in nature, the allocation
shall be made through the use of a selected base which produces results mat are equitable to both the
Federal Government and the organization. The distribution shall be made in accordance with the bases
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described herein unless£ can be demonstrated that the use of a different base would result in a more
equitable allocation of the costs, or that a more readily available base would not increase the costs
charged to sponsored awards. The results of special cost studies (such as an engineering utility study)
shall not be used to determine and allocate the indirect costs to sponsored awards.
(1) Depreciation and use allowances. Depreciation and use allowances expenses shall be allocated in th«>
following manner:
(a) Depreciation or use allowances on buildings used exclusively in the conduct of a single function, and
on capital improvements and equipment used in such buildings, shall be assigned to that function.
(b) Depreciation or use allowances on buildings used for more than one function, and on capital
improvements and equipment used in such buildings, shall be allocated to the individual functions
formed in each building on the basis of usable square feet of space, excluding common areas such as
lumv* p+amvrAll* MI«! i^nnt * «•»»*» cu
lallways, stairwells, and restrooms.
(c) Depreciation or use allowances on buildings, capital improvements and equipment related space
(e.g., individual rooms, and laboratories) used jointly by more than one function (as detenninedbythe
users of the space) shall be treated as follows. The cost of each jointly used unit of space shall be
allocated to the benefitting functions on the basis of:
(i) the employees and other users on a full-time equivalent (FTE) basis or salaries and wages of those
individual functions benefitting from the use of that space; or
(ii) organization-wide employee FTEs or salaries and wages applicable to the benefitting functions of
the organization.
(d) Depreciation or use allowances on certain capital improvements to land, such as paved parking
areas, fences, sidewalks, and the like, not included in the cost of buildings, shall be allocated to user
categories on a FTE basis and distributed to major functions in proportion to the salaries and waees of
all employees applicable to the functions.
(2) Interest. Interest costs shall be allocated in the same manner as the depreciation or use allowances on
the buildings, equipment and capital equipments to which the interest relates.
(3) Operation and maintenance expenses. Operation and maintenance expenses shall be allocated in the
same manner as the depreciation and use allowances.
(4) General administration and general expenses. General administration and general expenses shall be
allocated to benefitting functions based on modified total direct costs (MTDC), as described in
subparagraph D.S.f. The expenses included in this category could be grouped first according to major
functions of the organization to which they render services or provide benefits. The aggregate expenses
of each group shall then be allocated to benefitting functions based on MTDC.
d. Order of distribution.
(1) Indirect cost categories consisting of depreciation and use allowances, interest, operation and
maintenance, and general administration and general expenses shall be allocated in that order to the
remaining indirect cost categories as well as to the major functions of the organization. Other cost
categories could be allocated in the order determined to be most appropriate by the organization. When
cross allocation of costs is made as provided in subparagraph (2), this order of allocation does not apply.
(2) Normally, an indirect cost category will be considered closed once it has been allocated to other cost
objectives, and costs shall not be subsequently allocated to it. However, a cross allocation of costs
between two or more indirect costs categories could be used if such allocation will result in a more
equitable allocation of costs. If a cross allocation is used, an appropriate modification to the composition
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of the indirect cost categories is required.
e. Application of indirect cost rate or rates. Except where a special indirect cost rate(s) is required in
accordance with subparagraph D.5, the separate groupings of indirect costs allocated to each major
function shall be aggregated and treated as a common pool for that function. The costs in the common
pool shall then be distributed to individual awards included in that function by use of a single indirect
cost rate.
f. Distribution basis. Indirect costs shall be distributed to applicable sponsored awards and other
benefitting activities within each major function on the basis of MTDC. MTDC consists of all salaries
and wages, fringe benefits, materials and supplies, services, travel, and subgrants and subcontracts up to
the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or
subcontract). Equipment, capital expenditures, charges for patient care, rental costs and the portion in
excess of $25,000 shall be excluded from MTDC. Participant support costs shall generally be excluded
from MTDC. Other items may only be excluded when the Federal cost cognizant agency determines
that an exclusion is necessary to avoid a serious inequity in the distribution of indirect costs.
g. Individual Rate Components. An indirect cost rate shall be determined for each separate indirect cost
pool developed. The rate in each case shall be stated as the percentage which the amount of the
particular indirect cost pool is of the distribution base identified with that pool. Each indirect cost rate
negotiation or determination agreement shall include development of the rate for each indirect cost pool
as well as the overall indirect cost rate. The indirect cost pools shall be classified within two broad
categories: "Facilities" and "Administration," as described in subparagraph C.3.
B. Attachment B
Revise the following cost items in Attachment B to Circular A-122 ("Selected Items of Cost").
1. Revise the Table of Contents for Attachment B to read:
1. Advertising and public relations costs
2. Alcoholic beverages
3. Bad debts
4. Bid and proposal costs (reserved)
5. Bonding costs
6. Communication costs
7. Compensation for personal services
8. Contingency provisions
9. Contributions _
10. Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringement
11. Depreciation and use allowances
12. Donations
13. Employee morale, health, and welfare costs and credits
14. Entertainment costs
15. Equipment and other capital expenditures
16. Fines and penalties
17. Fringe benefits
18. Goods or services for personal use
19. Housing and personal living expenses
20. Idle facilities and idle capacity
21. Independent research and development (reserved)
22. Insurance and indemnification
23. Interest, fund raising, and investment management costs
24. Labor relations costs
25. Lobbying costs
26. Losses on other awards
27. Maintenance and repair costs
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OMB Circular A-122 ^://www.wfaitebouse.govAVH/EOP/OMB^itml/ciiriil«rt;/ai2?/al2;j
28. Materials and supplies
29. Meetings and conferences
30. Memberships, subscriptions, and professional activity costs
31. QrKflDizflEt&oii costs
32. Overtime, extra-pay shift, and multi-shift premiums
33. Page charges in professional journals
34. Participant support costs
35. Patent costs
36. Pension plans
37. Plant security costs
38. Pre-award costs
39. Professional service costs
40. Profits and losses on disposition of depreciable property or other capital assets
41. Publication and printing costs
42. Rearrangement and alteration costs
43. Reconversion costs
44. Recruiting costs
45. Relocation costs
46. Rental costs
47. Royalties and other costs for use of patents and copyrights
48. Selling *"d inanVpting
49. Severance pay
50. Specialized service facilities
51. Taxes
52. Termination costs
53. Training and education costs
54. Transportation costs
55. Travel costs
56. Trustees
2. Revise and retitle paragraph 1 to read:
1. Advertising and public relations costs.
a. The term advertising costs means the costs of advertising media and corollary administrative costs.
Advertising media include magazines, newspapers, radio and television programs, direct mail exhibits
and the like.
b. The term public relations includes community relations and means those activities dedicated to
maintaining the image of the organization or maintaining or promoting understanding and favorable
relations with the community or public at large or any segment of the public.
c. The only allowable advertising costs are those which are solely for:
(1) The recruitment of personnel required for the performance by the organization of oblistaticn.i an-> ;
under a sponsored award, when considered in conjunction with all otherrecruirmeat ccsts~ as sc: fcnh ic
paragraph 44 ("Recruiting costs");
(2) The procurement of goods and services for the performance of a sponsored award;
(3) The disposal of scrap or surplus materials acquired in the performance of a sponsored av/arc except
when organizations are reimbursed for disposal costs at a predetermined amount in accordant wlrh
OMB Circular A-l 10, Sec. .34, "Equipment"; or
(4) Other specific purposes necessary to meet the requirements of the sponsored awaid.
d. The only allowable public relations costs are:
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(1) Costs specifically required by sponsored awards;
(2) Costs of communicating with the public and press pertaining to specific activities or
accomplishments which result from performance of sponsored awards (these costs are considered
necessary as pan of the outreach effort for the sponsored awards); or
(3) Costs of conducting general liaison with news media and government public relations officers, to the
extent that such activities are limited to communication and liaison necessary to keep the public
informed on matters of public concern, such as notices of contract/grant awards, financial matters, etc.
e Costs identified in subparagraphs c and d if incurred for more than one sponsored award or for both
sponsored work and other work of the organization, are allowable to the extent that the principles in
paragraphs B ("Direct Costs") and C ("Indirect Costs") of Attachment A are observed
f. Unallowable advertising and public relations costs include the following:
(1) All advertising and public relations costs other than as specified in subparagraphs c, d, and e;
(2) Costs of meetings or other events related to fund raising or other organizational activities including:
(i) Costs of displays, demonstrations, and exhibits;
(ii) Costs of meeting rooms, hospitality suites, and other special facilities used in conjunction with
shows and other special events; and
(iii) Salaries and wages of employees or cost of services engaged in setting up and displaying exhibits,
making demonstrations, and providing briefings;
(3) Costs of promotional items and memorabilia, including models, gifts, and souvenirs;
(4) Costs of advertising and public relations designed solely to promote the organization.
3. Renumber current paragraphs 2 through 8 as paragraphs 3 through 9, respectively.
4. Add the following new paragraph 2:
2. Alcoholic beverages. Costs of alcoholic beverages are unallowable.
5. In paragraph 7 ("Compensation for personal services"), as renumbered above in item 3, rename the
current subparagraph g ("Pension costs"), as subparagraph h. Add a new subparagraph g:
o Organization-furnished automobiles. That portion of the cost of organization-furnished automobiles
that relates to personal use by employees (including transportation to and from work) is unallowable as
fringe benefit or indirect costs regardless of whether the cost is reported as taxable income to the
employees. These costs are allowable as direct costs to sponsored award when necessary for the
performance of the sponsored award and approved by awarding agencies.
6. Renumber current paragraphs 9 through 15 as paragraphs 11 through 17, respectively.
7. Add new paragraph 10:
10. Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringement.
a. Definitions.
(1) Conviction, as used herein, means a judgment or a conviction of a criminal offense by any court of
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a
a plea
but are not limited to, administrative and clerical expenses; the cost of legal services
d by m-house or private counsel; and the costs of the^ervicW of accounS '
icrs retained by the organization to assist it; costs of employees, officers and trustees
'stsmcumri before, durmg, and aft* commencmentof^
proceeding that bears a direct relationship to the proceedings. J admimstranve
(3) Fraud, as used herein, means (i) acts of fraud corruption or attempts to defraud the Federal
2SW ™ ^JS»,&« ^ «-^ •—e foTdebannent c *****
(4) Penalty does not include restitution, reimbursement, or compensatory damages.
(5) Proceeding includes an investigation.
* °*2?1C j!"?*"1 h«]rin' <*** named in connection with any criminal civil or
oceeding (mcluding filing of a false certification) commenced
t«M»* *• OA^A t i f • —*vm*j W^^B»III««II%^^A vy Uiw ^CQCTBl
lent, or a State, local or foreign government, are not allowable if the proceeding- m relates to a
. of, or failure to comply with, a Federal, State, local or foragn statu^^S^l^Sf
organization (including its agents and employees), and (2) results in any ofthe Teaaatim *" **
(a) to a oiminal proceeding, a conviction.
'similar
(c) In the case of any civil or administrative proceeding, the imposition of a monetary penalty.
(d) A final decision by an appropriate Federal official to debar or suspend the organization to
dT C°mpromise' if ^ «*» could *** ««*«» » ^ of the dispositions
Siiri^iiiir °iSe ^oceeding ^L01^ ** same ^eged misconduct, the costs of all such proceedings
shall be unallowable if any one of them results in one of the dispositions shown in subararnT
t0 to s.ubParaSraph b is commenced by the Federal Government and is
T11111116 PUrSUa? ^° m a8reement ^te"^ "to by the organization and the
then the OMB incurred by the organization in connection with such procSngs
iE^^Lf^ l? J11 ^DPfragrapn b is commenced by a State, local or foreign government,
the authorized Federal official may allow the costs incurred by the organization for suchl JocSau if
*1
authorized official determines that the costs were incurred as a rsult of (1)
" directi011 of an authoed of
e. Costs incurred in connection with proceedings described in subparagraph b but which are
unallowable by that subparagraph, may be allowed by the FederalSSnent
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(1) The costs are reasonable in relation to the activities required to deal with the proceeding and the
underlying cause of action;
(2) Payment of the costs incurred, as allowable and allocable costs, is not prohibited by any other
provision(s) of the sponsored award:
(3) The costs are not otherwise recovered from the Federal Government or a third party, either directly
as a result of the proceeding or otherwise; and,
(4) The percentage of costs allowed does not exceed the percentage determined by an authorized Federal
official to be appropriate, considering the complexity of the litigation, generally accepted principles
governing the award of legal fees in civil actions involving the United States as a party, and such other
factors as may be appropriate. Such percentage shall not exceed 80 percent. However, if an agreement
reached under subparagraph c has explicitly considered this 80 percent limitation and permitted a higher
percentage, then the full amount of costs resulting from that agreement shall be allowable.
f Costs incurred by the organization in connection with the defense of suits brought by its employees or
ex-employees under section 2 of the Major Fraud Act of 1988 (Pub. L. 100-700), including the cost of
all relief necessary to make such employee whole, where the organization was found liable or settled,
are unallowable.
g Costs of legal, accounting, and consultant services, and related costs, incurred in connection with
defense against Federal Government claims or appeals, antitrust suits, or the prosecution of claims or
appeals against the Federal Government, are unallowable.
h Costs of legal, accounting, and consultant services, and related costs, incurred in connection with
patent infringement litigation, are unallowable unless otherwise provided for in the sponsored awards.
i Costs which may be unallowable under this paragraph, including directly associated costs, shall be
segregated and accounted for by the organization separately. During the pendency of any proceeding
covered by subparagraphs b and f, the Federal Government shall generally withhold payment of such
costs. However, if in the best interests of the Federal Government, the Federal Government may provide
for conditional payment upon provision of adequate security, or other adequate assurance, and
agreements by the organization to repay all unallowable costs, plus interest, if the costs are subsequently
determined to be unallowable.
8. In paragraph 15 ("Equipment and other capital expenditures"), as renumbered in item 6 above,
replace subparagraphs 15.a.(l)and 15.b.(2) to read:
15 a.(l) "Equipment" means an article of nonexpendable, tangible personal property having a useful life
of more than one year and an acquisition cost which equals or exceeds the lesser of (a) the capitalization
level established by the organization for the financial statement purposes, or (b) $5000. The
unamortized portion of any equipment written off as a result of a change in capitalization levels may be
recovered by continuing to claim the otherwise allowable use allowances or depreciation on the
equipment, or by amortizing the amount to be written off over a period of years as negotiated with the
Federal cognizant agency.
15.b.(2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that
items with a unit cost of $5000 or more have the prior approval of awarding agency.
9. Renumber current paragraphs 16 through 36 as paragraphs 20 through 40, respectively.
10. Add new paragraph 18:
1 g Goods or services for personal use. Costs of goods or services for personal use of the organization's
employees are unallowable regardless of whether the cost is reported as taxable income to the
employees.
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11. Add new paragraph 19:
19. Housing and personal living expenses.
a. Costs of housing (e.g., depreciation, maintenance, utilities, furnishings, rent, etc.), housina
allowances and personal living expenses for/of the organization's officers are unallowable as^fringe
benefit or indirect costs regardless of whether the cost is reported as taxable income to the employees
These costs are allowable as direct costs to sponsored awards when necessary for the performance of the
sponsored award and approved by awarding agencies.
b. The term "officers" includes current and past officers and employees.
12. Add to paragraph 22.a.(2) ("Insurance and indemnification"), as renumbered in item 9,
subparagraphs (f) and (g):
(f) Insurance against defects. Costs of insurance with respect to any costs incurred to correct defects in
the organization's materials or workmanship are unallowable.
(g) Medical liability (malpractice) insurance. Medical liability insurance is an allowable cost of Federal
research programs only to the extent that the Federal research programs involve human subjects or
training of participants in research techniques. Medical liability insurance costs shall be treated as a
direct cost and shall be assigned to individual projects based on the manner in which the insurer
allocates the risk to the population covered by the insurance.
13. Revise paragraph 30, as renumbered in item 9, to read:
30. Memberships, subscriptions and professional activity costs.
a. Costs of me organization's membership in business, technical, and professional organizations are
allowable.
b. Costs of the organization's subscriptions to business, professional, and technical periodicals are
allowable.
c. Costs of meetings and conferences, when the primary purpose is the dissemination of technical
information, are allowable. This includes costs of meals, transportation, rental of facilities, and other
items incidental to such meetings or conferences.
d. Costs of membership in any civic or community organization are allowable with prior approval by
Federal cognizant agency.
e. Costs of membership in any country club or social or dining club or organization are unallowable.
14. Delete subparagraph 39.d, as renumbered in item 9.
15. Delete current paragraph 37 ("Public service costs").
16. Renumber current paragraphs 38 through 44 as paragraphs 41 through 47, respectively.
17. Revise paragraph 44, as renumbered in item 16, to read:
44. Recruiting costs.
a. Subject to subparagraphs b, c, and d, and provided that the size of the staff recruited and m-JntsicccJ
is in keeping with workload requirements, costs of "help wanted" advertising, operating costs of an
employment office necessary to secure and maintain an adequate staff, costs of operating an aptitude
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and educational testing program, travel costs of employees while engaged in recruiting personnel, travel
costs of applicants for interviews for prospective employment, and relocation costs incurred incident to
recruitment of new employees, are allowable to the extent that such costs are incurred pursuant to a
well-managed recruitment program. Where the organization uses employment agencies, costs that are
not in excess of standard commercial rates for such services are allowable.
b. In publications, costs of help wanted advertising that includes color, includes advertising material for
other than recruitment purposes, or is excessive in size (taking into consideration recruitment purposes
for which intended and normal organizational practices in this respect), are unallowable.
c. Costs of help wanted advertising, special emoluments, fringe benefits, and salary allowances incurred
to attract professional personnel from other organizations that do not meet the test of reasonableness or
do not conform with the established practices of the organization, are unallowable.
d. Where relocation costs incurred incident to recruitment of a new employee have been allowed either
as an allocable direct or indirect cost, and die newly hired employee resigns for reasons within his
control within twelve months after being hired, the organization will be required to refund or credit such
relocation costs to the Federal Government.
18. Renumber current paragraphs 45 through 51 as paragraphs 49 through 55, respectively.
19. Add new paragraph 48:
48. Selling and marketing. Costs of selling and marketing any products or services of the organization
(unless allowed under paragraph 1 as allowable public relations costs) are unallowable. These costs,
however, are allowable as direct costs, with prior approval by awarding agencies, when they are
necessary for the performance of Federal programs.
20. Add new subparagraphs c, d and e to paragraph 49 ("Severance pay"), as renumbered in item 18, as
follow:
c. Costs incurred in certain severance pay packages (commonly known as "a golden parachute"
payment) which are in an amount in excess of the normal severance pay paid by the organization to an
employee upon termination of employment and are paid to the employee contingent upon a change in
management control over, or ownership of, die organization's assets are unallowable.
d. Severance payments to foreign nationals employed by the organization outside the United States, to
the extent that the amount exceeds the customary or prevailing practices for the organization in the
United States are unallowable, unless they are necessary for the performance of Federal programs and
• approved by awarding agencies.
e. Severance payments to foreign nationals employed by the organization outside die United States due
to the termination of the foreign national as a result of die closing of, or curtailment of activities by, the
organization in that country, are unallowable, unless they are necessary for die performance of Federal
programs and approved by awarding agencies.
21. Add new paragraph 56:
56. Trustees. Travel and subsistence costs of trustees (or directors) are allowable. The costs are subject
to restrictions regarding lodging, subsistence and air travel costs provided in paragraph 55.
C. Attachment C
1. Delete the following organizations from Attachment C. These organizations either no longer exist or
are no longer exempted from complying with Circular A-122.
• Associated Universities, Incorporated, Washington, D.C.
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ht^://www.w*itdiouse.gov/WH/EOP/OMB/hlml/circulai^al 22/al:
• Associated Universities for Research and Astronomy, Tucson, Arizona
Rcsearch Laboratory (CARL), (University of Tennessee), Oak Ridge,
Institute of Gas Technology, Chicago, Illinois
Montana Energy Research and Development Institute, Inc., (MERDI), Butte, Montana
Project Management Corporation, Oak Ridge, Tennessee
Sandia Corporation, Albuquerque, New Mexico
Universities Corporation for Atmospheric Research, Boulder, Colorado
sities Association, Chicago, Illinois to Argonne National Laboratory,
3. Change the location of the Institute for Defense Analysis in Virginia from Arlington to Alexandria.
» ***« Ci* M**"* » »— Renewable
D. A recompilation of the entire Circular A-122, with all its amendments, follows:
CIRCULAR NO. A-122
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Cost Principles for Non-Profit Organizations
1. Purpose. This Circular establishes principles for determining costs of grants, contracts and other
agreements v^i non-profit organizations. It does not apply to colleges and universities which are
fag??f?t -Ei Bud8« (OMB) Circular A-21, "Cost Principles for Educational
1 fdfederaUy-recogmzed Indian tribal governments which are covered by
ri y
OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments"- or hospiul-
The principles are designed to provide that the Federal Government bear its fair share of costs exceoi
wnere restricted 1 or prohibited by law. The principles do not attempt to prescribe the extent of cosi "
sharing ormatchmg on grants, contracts, or other agreements. However, such cost sharing or maichia»
shall not be accomplished through arbitrary limitations on individual cost elements by Federal agencies
irovision tor profit or other increment above cost is outside the scope of this Circular.
2. Supersession. This Circular supersedes cost principles issued by individual agencies for non-profit
orgamzanons. " ~
3. Applicability.
a. These principles shall be used by all Federal agencies in determining the costs of work performed by
non-profit organizations under grants, cooperative agreements, cost reimbursement contracts and other
contracts in which costs are used in pricing, administration, or settlement. All of these instruments are
hereafter referred to as awards. The principles do not apply to awards under which an organization is
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jOMB Circular A-122 hnpy/www.\»^iitdiouse.gov/WH/EOP/OMB/hlml/cirailars/al22/al22J^
not required to account to the Federal Government for actual costs incurred.
b. All cost reimbursement subawards (subgrants, subcontracts, etc.) are subject to those Federal cost
principles applicable to the particular organization concerned. Thus, if a subaward is to a non-profit
organization, this Circular shall apply: if a subaward is to a commercial organization, the cost principles
applicable to'commercial concerns shall apply; if a subaward is to a college or university, Circular A-21
shall apply; if a subaward is to a State, local, or federally-recognized Indian tribal government, Circular
A-87 shall apply.
4. Definitions.
a_ Non-profit orga™*aTion means any corporation, trust, association, cooperative, or other organization
which:
(1) is operated primarily for scientific, educational, service, charitable, or similar purposes in the public
interest;
(2) is not organized primarily for profit; and
(3) uses its net proceeds to maintain _ improve, and/or expand its operations. For this purpose, the term
"non-profit organization" excludes (i) colleges and universities; (ii) hospitals; (iii) State, local, and
federally-recognized Indian tribal governments; and (iv) those non-profit organizations which are
excluded from coverage of this Circular in accordance with paragraph 5.
b. Prior approval means securing die awarding agency's permission in advance to incur cost for those
items that areHesignated as requiring prior approval by the Circular. Generally this permission will be
in writing. Where an item of cost requiring prior approval is specified in the budget of an award,
approval of the budget constitutes approval of that cost.
5, Exclusion of some non-profit organizations. Some non-profit organizations, because of their size and
nature of operations, can be considered to be similar to commercial concerns for purpose of
applicability of cost principles. Such non-profit organizations shall operate under Federal cost principles
applicable to commercial concerns. A listing of these organizations is contained in Attachment C. Other
organizations may be added from time to time.
6. Responsibilities. Agencies responsible for administering programs that involve awards to non-profit
prganiyjitinns shall implement the provisions of this Circular. Upon request, implementing instruction
shall be furnished to OMB. Agencies shall designate a liaison official to serve as the agency
representative on matters relating to the implementation of this Circular. The name and title of such
representative shall be furnished to OMB within 30 days of the date of this Circular.
7. Attachments. The principles and related policy guides are set forth in the following Attachments:
Attachment A - General Principles
Attachment B - Selected Items of Cost
Attachment C - Non-Profit Organizations Not Subject To This Circular
g Requests for exceptions. OMB may grant exceptions to the requirements of this Circular when
permissible under Misting law. However, in die interest of achieving maximum uniformity, exceptions
will be permitted only in highly unusual circumstances.
9. Effective Date. The provisions of this Circular are effective immediately. Implementation shall be
phased in by incorpf>rat'nc the provisions into new awards made after the start of the organization's next
fiscal year. For existing awards, the new principles may be applied if an organization and the cognizant
Federal agency agree. Earlier implementation, or a delay in implementation of individual provisions, is
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also permitted by mutual agreement between an organization and the cognizant Federal agency.
10. Inquiries. Further information concerning this Circular may be obtained by contacting the Office of
Federal Financial Management, OMB, Washington, DC 20503, telephone (202) 395-3993.
Attachments
ATTACHMENT A
Circular No. A-122
GENERAL PRINCIPLES
Table of Contents
A_ Basic Considerations
1. Composition of total costs
2. Factors affecting allowability of costs
3. Reasonable costs
4. Allocable costs
5. Applicable credits
6. Advance
7. Conditional exemptions
B. Direct Costs
C. Indirect Costs
D. Allocation of Indirect Costs and Determination of Indirect Cost Rates
1. General
2. Simplified allocation method
3. Multiple allocation base method
4. Direct allocation method
5. Special indirect cost rates
E. Negotiation and Approval of Indirect Cost Rates
1 . Definitions
2. Negotiation and approval of rates
ATTACHMENT A ~ "
Circular No. A-122
GENERAL PRINCIPLES
A. Basic Considerations
1 . Composition of total costs. The total cost of an award is the sum of the allowable direct and allocable
indirect costs less any applicable credits.
2. Factors affecting allowability of costs. To be allowable under an award, costs must meet the
following general criteria:
a. Be reasonable for the performance of the award and be allocable thereto under these principles.
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b. Conform to any limitations or exclusions set forth in these principles or in the award as to types or
amount of cost items.
c. Be consistent vrith policies and procedures that apply uniformly to both federally-financed and other
activities of the organization.
d. Be accorded consistent treatment.
e. Be determined in accordance with generally accepted accounting principles (GAAP).
f Not be included as a cost or used to meet cost sharing or matching requirements of any other
federally-financed program in either the current or a prior period.
g. Be adequately documented.
3. Reasonable costs, A cost is reasonable if, in its nature or amount, it does not exceed that which would
be incurred by a prudent person under the circumstances prevailing at the time the decision was made to
incur the costs. The question of the reasonableness of specific costs must be scrutinized with particular
care in connection with organizations or separate divisions thereof which receive the preponderance of
their support from awards made by Federal agencies. In determining the reasonableness of a given cost,
consideration shall be given to:
a. Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the
organization or the performance of the award.
b. The restraints or requirements imposed by such factors as generally accepted sound business
practices, arms length bargaining, Federal and State laws and regulations, and terms and conditions of
the award.
c. Whether the individuals concerned acted with prudence in the circumstances, considering then-
responsibilities to the organization, its members, employees, and clients, the public at large, and the
Federal Government.
d Significant deviations from the established practices of the organization which may unjustifiably
increase the award costs.
4. Allocable costs.
a A cost is allocable to a particular cost objective, such as a grant, contract, project, service, or other
activity in accordance with the relative benefits received. A cost is allocable to a Federal award if it is
treated consistently with other costs incurred for the same purpose in like circumstances and if it:
(1) Is incurred specifically for the award.
(2) Benefits both the award and other work and can be distributed in reasonable proportion to the
benefits received, or
(3) Is necessary to the overall operation of the organization, although a direct relationship to any
particular cost objective cannot be shown.
b Any cost allocable to a particular award or other cost objective under these principles may not be
shifted to other Federal awards to overcome funding deficiencies, or to avoid restrictions imposed by
law or by the terms of the award.
5. Applicable credits.
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a. The term applicable credits refers to those receipts, or reduction of expenditures which
offset or reduce expense items that are allocable * awards as direct or SSSSi^
of such transactions are: purchase discounts, rebates or allowances, recS^oVmdenS
insurance refunds, and admsmients of overpayments or erroneous chanres. To SeSTh
credits accnung or received by the organization relate to allowable cos^ thev shall be oedited S , the
Federal Government either as a cost reduction or cash refund, as appropriate.
b. In some instances, the amounts received from the Federal Government to finance oreanizational
acnyities or service operations should be treated as applicable credits. Specific^ TSSSS of
netting such credit items against related expenditinWihould be applied b7toe^aniz^onT
determining tie rates or amounts to be charged to Federal awardTfor sendees remSwhrnever the
^^
c J°r "Jf ^JXS"8 VPSF01 mcome (^ SFO* m«™e earned from federally-supported activities) see
receive a preponderance of their support from Federal agencies. In order to avoid
disallowance or dispute based on unreasonableness or nonallocability, it is often d
1 *
W awaRfing
on •* element of -
7. Conditional exemptions.
a. OMB authorizes conditional exemption from OMB administrative requirements and cost
circulars for certain Federal programs with statutorily-authorized consSdated plarn^md
consohdated admuustrative funding, that are identified by a Federal agency and mraSJedbv the head of
the Executive department or establishment. A Federal agency shall cSsulfwith OMB dS te
consideration of whether to grant such an exemption.
b. To promote efficiency in State and local program administration, when Federal non-entitlement
001™ "8 hwe ?*?** statutorily-authorized consolidated planning and
and Where most of *" State aSency's resources come
noF c resources comeom
non-Federal sources, Federal agencies may exempt these covered State-administered, non-entitlement
pnt programs from certain OMB grants management requirements. The exemptions would be from all
but the allocabihty of costs provisions of OMB Circulars A-87 (Attachment A, suteectionC 3) «cSt
Pnnap es for State, Local, and Indian Tribal Governments," A-21 (Section cS
Principles forEducadonal Institutions," and A-122 (Attachment A, subsection A 4)
e reinrements
R!? TS1^!^ Grants "^ Agreements with Institutions of Hicb
Non-Profit Organizations," and the agencies' grants management
£ JI?60 at F5de? agenCy ^^ ^ fl5xibaity. « a prerequisite to a State's exercising this onion a
State must adopt ,tt own written fiscal and administrative requirements for expending and acc-darino
for all funds, which are consistent with the provisions of OMB Circular A-87, Wd^tend 1 suS M™^
o all subrecipien^ These fiscal and administrative requirements must be naaa£y%^F~w
that: funds are used in compliance with all applicable Federal statutory and regulatory r^visiors cc "
are reasonable and necessary for operating these programs, and fundsWe natKSSS ^5Sd " '
expenses required to carry out other responsibilities of a State or its subrecipients.
B. Direct Costs
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1. Direct costs are those that can be identified specifically with a particular final cost objective, i.e., a
particular award, project, service, or other direct activity of an organization. However, a cost may not be
assigned to an award as a direct cost if any other cost incurred for the same purpose, in like
circumstance, has been allocated to an award as an indirect cost. Costs identified specifically with
awards are direct costs of the awards and are to be assigned directly thereto. Costs identified specifically
with other final cost objectives of the organization are direct costs of those cost objectives and are not to
be assigned to other awards directly or indirectly.
2. Any direct cost of a minor amount may be treated as an indirect cost for reasons of practicality where
the acco™*"^ treatment for such cost is consistently applied to all final cost objectives.
3. The cost of certain activities are not allowable as charges to Federal awards (see, for example,
fundraising costs in paragraph 23 of Attachment B). However, even though these costs are
unallowable for purposes of computing charges to Federal awards, they nonetheless must be treated as
direct costs for purposes of determining indirect cost rates and be allocated their share of the
organization's indirect costs if they represent activities which (1) include the salaries of personnel, (2)
occupy space, and (3) benefit from the organization's indirect costs.
4 The costs of activities performed primarily as a service to members, clients, or the general'_
when significant and necessary to the organization's mission must be treated as direct costs whether or
not allowable and be allocated an equitable share of indirect costs. Some examples of these types of
activities include:
a. Maintenance of membership rolls, subscriptions, publications, and related functions.
b. Providing services and information to members, legislative or administrative bodies, or the public.
c. Promotion, lobbying, and other forms of public relations.
d. Meetings and conferences except those held to conduct the general administration of the organization.
e. Maintenance, protection, and investment of special funds not used in operation of the organization.
f. Administration of group benefits on behalf of members or clients, including life and hospital
insurance, annuity or retirement plans, financial aid, etc.
C. Indirect Costs
1 Indirect costs are those that have been incurred for common or joint objectives and cannot be readily
identified with a particular final cost objective. Direct cost of minor amounts may be treated as indirect
costs under the conditions described in subparagraph B.2. After direct costs have been determined and
assigned directly to awards or other work as appropriate, indirect costs are those remaining to be
allocated to benefiting cost objectives. A cost may not be allocated to an award as an indirect cost if any
other cost incurred for the same purpose, in like circumstances, has been assigned to an award as a
direct cost.
2 Because of the diverse characteristics and accounting practices of non-profit organizations, it is not
possible to specify the types of cost which may be classified as indirect cost in all situations. However,
typical examples of indirect cost for many non-profit organizations may include depreciation or use
allowances on buildings and equipment, the costs of operating and maintaining facilities, and general
administration and general expenses, such as the salaries and expenses of executive officers, personnel
administration, and accounting.
3. Indirect costs shall be classified within two broad categories: "Facilities" and "Administration."
"Facilities" is defined as depreciation and use allowances on buildings, equipment and capital
improvement, interest on debt associated with certain buildings, equipment and capital improvements,
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and operations and maintenance expenses. "Administration" is defined as general administration and
general expenses such as the director's office, accounting, personnel, library expenses and all other types
of expenditures not listed specifically under one of the subcategories of Tacilities" (including cross
allocations from other pools, where applicable). See indirect cost rate reporting requirements in
subparagraphs D.2.e and DJ.g.
D. Allocation of Indirect Costs and Determination of Indirect Cost Rates
1. General. .
a. Where a non-profit organization has only one major function, or where all its major functions benefit
from its indirect costs to approximately the same degree, the allocation of indirect costs and the
pnTYimitatirm AT on inrlJiirir I j»nef- MI+A «*icnr 1*^ A«w»4%«M«*1«MltA^9 «!»««• «_t» AI__I.:.CAJ _n „• .
—— -— -TT - •••••••^•^•y M*W OTMMW Mw^*wy H*%r WUWCMAWU U& UAUU CWi MJdlS aUU, UfC
computation of an indirect cost rate may be accomplished through simplified allocation nrocedures as
described in snbparagraph 2. '
b. Where an organization has several major functions which benefit from its indirect costs in varying
degrees, allocation of indirect costs may require the accumulation of such costs into separate cost
groupings which then are allocated individually to benefiting functions by means of a case which best
measures the relative degree of benefit. The indirect costs allocated to each function are then distributed
to individual awards and other activities included in mat function by mean; Of an indirect cost rate(s)
c. The determination of what constitutes an organization's major functions will depend on its purpose in
being; the types of services it renders to the public, its clients, and its members; and the amount of effort
it devotes to such activities as fundraising, public information and membership activities.
d. Specific methods for allocating indirect costs and computing indirect cost rates along with the
conditions under which each method should be used are described in snbparagraphs 2 through 5.
e. The base period for the allocation of indirect costs is the period in which such costs are incurred and
accumulated for allocation to work performed in that period. The base period normally should coincide
with the organization's fiscal year but, in any event, shall be so selected as to avoid inequities in the
allocation of the costs.
2. Simplified allocation method.
a. Where an organization's major functions benefit from its indirect costs to approximately the same
degree, the allocation of indirect costs may be accomplished by (i) separating the organisation's total
costs for the base period as either direct or indirect, and (ii) dividing the total allowable indirect costs
(net of applicable credits) by an equitable distribution base. The result of this process is an indirect cost
rate which is used to distribute indirect costs to individual awards. The rate should be expressed as the
percentage which the total amount of allowable indirect costs bears to the base selected. This method
should also be used where an organization has only one major function encompassing a number of
individual projects or activities, and may be used where the level of Federal awards to an organization i-
relatively small.
b. Both the direct costs and the indirect costs shall exclude capital expenditures and unallowable costs.
However, unallowable costs which represent activities must be included in the direct costs under the
conditions described in snbparagraph B J.
c. The distribution base may be total direct costs (excluding capital expenditures and other distorting
items, such as major subcontracts or subgrants), direct salaries and wages, or other base which results in
an equitable distribution. The distribution base shall generally exclude participant support costs as
defined in paragraph 34 of Attachment B.
d. Except where a special rate(s) is required in accordance with subparagraph 5, the indirect cost rate
developed under the above principles is applicable to all awards at the organization. If a special rate(s) is
required, appropriate modifications shall be made in order to develop the special rate(s).
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e. For an organization that receives more than S10 million in Federal funding of direct costs in a fiscal
year, a breakout of the indirect cost component into two broad categories, Facilities and Administration
as defined in snbparagraph C3. is required. The rate in each case shall be stated as the percentage
which the amount of the particular indirect cost category (i.e., Facilities or Administration) is of the
distribution base identified with that category.
3. Multiple allocation base method
a. General. Where an organization's indirect costs benefit its major functions in varying degrees, indirect
costs shall be accumulated into separate cost groupings, as described hi subparagraph b. Each
grouping shall then be allocated individually to benefitting functions by means of a base which best
measures the relative benefits. The default allocation bases by cost pool are described in snbparagraph
c.
b. Identification of indirect costs. Cost groupings shall be established so as to permit the allocation of
each grouping on the basis of benefits provided to the major functions. Each grouping shall constitute a
pool of expenses that are of like character in terms of functions they benefit and in terms of the
allocation base which best measures the relative benefits provided to each function. The groupings are
classified within the two broad categories: "Facilities" and "Administration," as described in
subparagraph C3. The indirect cost pools are defined as follows:
(1) Depreciation and use allowances. The expenses under this heading are the portion of the'costs.pf the-
organization's buildings, capital improvements to land and buildings, and equipment which are ~^'
computed in accordance with paragraph 11 of Attachment B ("Depreciation and use allowances").
(2) Interest. Interest on debt associated with certain buildings, equipment and capital improvements are
computed in accordance with paragraph 23 of Attachment B ("Interest, fundraising, and investment
management costs").
(3) Operation and maintenance expenses. The expenses under this heading are those that have been
incurred for the administration, operation, maintenance, preservation, and protection of the
organization's physical plant. They include expenses normally incurred for such items as: janitorial and
utility services; repairs and ordinary or normal alterations of buildings, furniture and equipment; care of
grounds; maintiitiimce and operation of buildings and other plant facilities; security; earthquake and
disaster preparedness; environmental safety; hazardous waste disposal; property, liability and other
insurance relating to property; space and capital leasing; facility planning and management; and, central
receiving. The operation and maintenance expenses category shall also include its allocable share of
fringe benefit costs, depreciation and use allowances, and interest costs.
(4) General administration and general expenses. The expenses under this heading are those that have
been incurred for the overall general executive and administrative offices of the organization and other
expenses of a general nature which do not relate solely to any major function of the organization. This
category shall also include its allocable share of fringe benefit costs, operation and maintenance
expense, depreciation and use allowances, and interest costs. Examples of this category include central
offices, such as the director's office, the office of finance, business services, budget and planning,
personnel, safety and risk management, general counsel, management information systems, and horary
a» «*••••
costs.
In developing this cost pool, special care should be exercised to ensure that costs incurred for the same
purpose in like circumstances are treated consistently as either direct or indirect costs. For example,
salaries of technical staff, project supplies, project publication, telephone toll charges, computer costs,
navel costs, and specialized services costs shall be treated as direct costs wherever identifiable to a
particular program. The salaries and wages of administrative and pooled clerical staff should normally
be treated as indirect costs. Direct charging of these costs may be appropriate where a major project or
activity explicitly requires and budgets for administrative or clerical services and other individuals
involved can be identified with the program or activity. Items such as office supplies, postage, local
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OMB Circular A- 122 u->«_ j.- .
bflp://www.wfaitd»us^^
costs.
telephone costs, periodicals and memberships should normally be treated as indirect
c. Allocation bases. Actual conditions shall be taken into account
allocating the expenses in each grouping to taSSSSS
selecting a method or a base is that it is the one best suited for ass
objectives in accordance with benefits derived; a traceable cause a
reason, where neither the cause nor the effecTof the rdaSoSn?
n^KaS^^
sMl l-mJS^fc^SEtf
FederalGovenimefli and the organization. The distribution shall bemade
(a) Depreciation or use allowances on buildings used exclusively in the conduct of a sinele fimrri™
on capital improvements and equipment used in such buildings, shall be *££S I to fffunaSS *
(b) Depreciation or use allowances on buildings used for more than one function, and on
shaU
as
(c) Depreciation or use allowances on buildings, capital improvements
(e.g., individual rooms, and laboratories) used jointly by more than oni
users of the space) shall be treated as follows. The cost of each jointly
allocated to the benefitting functions on the basis of
>i0ye<5S "i?? V808 on a fuU-tune equivalent (FTE) basis or salaries and waees of those
functions benefitting from the use of mat space; or «««"» ana wages ot those
space
me 6 10
to
(2) Interest. Interest costs shall be allocated in the same manner as the denreciati™ or nc» *ii«
the buildings, equipment and capital equipments to v^cHIe b£esf reSeT W:rt ':
(3) Operation and maintenance expenses. Operation and maintenance expenses shall be allocate^3 in IM
same manner as the depreciation and use allowances. auocatec n uie
(4) General administration and general expenses. General administration and general expenses -hal' ^
allocated to benefitting functions based on modified total direct costs (MTDC)lTdescribed^
subparagraph D.3.f. The expenses included in this categoiy could be grouped' fust according- -•;-,-
functions of the^organization to which they render services or provide benefits The a^eoate*.'" "'^ '
of each group shall then be allocated to benefitting functions based on &TTDC. a?gregate
d. Order of distribution.
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(1) Indirect cost categories consisting of depreciation and use allowances, interest, operation and
maintenance, and general administration and general expenses shall be allocated in that order to the
remaining indirect cost categories as well as to the major functions of the organization. Other cost
categories could be allocated in the order determined to be most appropriate by the organization. When
cross allocation of costs is made as provided in subparagraph (2). this order of allocation does not
apply.
(2) Normally, an indirect cost category will be considered closed once it has been allocated to other cost
objectives, and costs shall not be subsequently allocated to it. However, a cross allocation of costs
between two or more indirect costs categories could be used if such allocation will result in a more
equitable allocation of costs. If a cross allocation is used, an appropriate modification to the composition
of the indirect cost categories is required.
e. Application of indirect cost rate or rates. Except where a special indirect cost rate(s) is required in
accordance with subparagraph D.5, the separate groupings of indirect costs allocated to each major
function shall be aggregated and treated as a common pool for that function. The costs in the common
pool shall then be distributed to individual awards included in that function by use of a single indirect
cost rate.
f. Distribution basis. Indirect costs shall be distributed to applicable sponsored awards and other
benefitting activities within each major function on the basis of MTDC. MTDC consists of all salaries
and wages, fringe benefits, materials and supplies, services, navel, and subgrants and subcontracts up to
the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or
subcontract). Equipment, capital expenditures, charges for patient care, rental costs and the portion in
excess of $25,000 shall be excluded from MTDC. Participant support costs shall generally be excluded
from MTDC. Other items may only be excluded when the Federal cost cognizant agency determines
that an exclusion is necessary to avoid a serious inequity in the distribution of indirect costs.
g. Individual Rate Components. An indirect cost rate shall be determined for each separate indirect cost
pool developed. The rate in each case shall be stated as the percentage which the amount of the
particular indirect cost pool is of the distribution base identified with that pool. Each indirect cost rate
negotiation or determination agreement shall include development of the rate for each indirect cost pool
as well as the overall indirect cost rate. The indirect cost pools shall be classified within two broad
categories: "Facilities" and "Administration," as described in subparagraph C.3.
4. Direct allocation method.
a. Some non-profit organizations treat all costs as direct costs except general administration and general
expenses. These organizations generally separate their costs into three basic categories: (i) General
administration and general expenses, (ii) fundraising, and (iii) other direct functions (including projects
performed under Federal awards). Joint costs, such as depreciation, rental costs, operation and
maintenance of facilities, telephone expenses, and the like are prorated individually as direct costs to
each category and to each award or other activity using a base most appropriate to the particular cost
being prorated.
b. This method is acceptable, provided each joint cost is prorated using a base which accurately
measures the benefits provided to each award or other activity. The bases must be established in
accordance with reasonable criteria, and be supported by current data. This method is compatible with
the Standards of Accounting and Financial Reporting for Voluntary Health and Welfare Organisations
issued jointly by the National Health Council, Inc., the National Assembly of Voluntary Health and
Social Welfare Organizations, and the United Way of America.
c. Under this method, indirect costs consist exclusively of general administration and general expenses.
In all other respects, the organization's indirect cost rates shall be computed in the same manner as that
described in subparagraph 2.
5. Special indirect cost rates, hi some instances, a single indirect cost rate for all activities of an
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OMB Circular A-122 ta*://wwwwhitAoiisegov/W^
organization or for each major function of the organization may not be appropriate, since it would not
take into account those different factors which may substantially affect the indirect costs applicable to a
particular segment of work. For this purpose, a particular segment of work may be that perfonned under
asmgle award or it may consist of work under a group of awards performed in a conimra environment
These factors may include the physical location of the work, the level of administrative support
required, the nature of the facilities or other resources employed, the scientific disciplines ortechnical
skills involved, the organizational arrangements used, or any combination thereof. When a particular
segment of work is perfonned in an environment which appears to generate a significantly different
level of indirect costs,provisions should be made for a separate indirect cost pool applicable to such
work. The separate indirect cost pool should be developed during the course of the regular allocation
process, and the separate indirect cost rate resulting therefrom should be used, provided it is determined
that (i) the rate dlffes significantly from that which would have been obtained md^toanmSS^
3, and 4, and (ii) the volume of work to which the rate would apply is material. *"'
E. Negotiation and Approval of Indirect Cost Rates
1. Definitions. As used in this section, the following terms have the meanings set forth below:
a. Cognizant agency means the Federal agency responsible for negotiating and approving indirect cost
rates for a non-profit organization on behalf of all Federal agencies. «"«.IWIH
b. Predetermined rate means an indirect cost rate, applicable to a specified current or future period.
usuallythe orgamzSon's fiscal year. The rate is based on an estimate of the costs to be incut-H £•-- •
the period. A predetermined rate is not subject to adjustment.
c. Fixed rate means an indirect cost rate which has the same characteristics as a predetermined rax
except that the difference between the estimated costs and the actual costs of the period covered by the
rate is earned forward as an adjustment to the rate computation of a subsequent period.
d. Final rate means an indirect cost rate applicable to a specified past period which is based on the actual
costs of the period. A final rate is not subject to adjustment.
e. Provisional rate or billing rate means a temporary indirect cost rate applicable to a specified period
which is used for funding, interim reimbursement, and reporting indirect costs on awards pending the
establishment of a final rate for the period. t«-««u5 m*
f- Indirect cost proposal means the documentation prepared by an organization to substantiate its claim
for the reimbursement of indirect costs. This proposal provides the basis for the review and negotiation
leading to the establishment of an organization's indirect cost rate.
g. Cost objective means a function, organizational subdivision, conn-act, grant, or other work unit for
which cost dataare desired and for which provision is made to accumulate and measure the cost of
processes, projects, jobs and capitalized projects.
2. Negotiation and approval of rates.
a. Unless different arrangements are agreed to by the agencies concerned, the Federal agency with the
largest dollar value of awards with an organization will be designated as the cognizant agency for the
negotiation and approval of the indirect cost rates and, where necessary, other rates such as fringe
benefit and computer charge-out rates. Once an agency is assigned cognizance for a particular
non-profit organization, the assignment will not be changed unless mere is a major long-term shift in the
dollar volume of the Federal awards to the organization. All concerned Federal agencies shall be given
the opportunity to participate in the negotiation process but, after a rate has been agreed upon it will be
accepted by all Federal agencies. When a Federal agency has reason to believe that special operatm"
factors affecting its awards necessitate special indirect cost rates in accordance with subparagraph D.5
it will, prior to the time the rates are negotiated, notify the cognizant agency. '
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b. A non-profit organization which has not previously established an indirect cost rate with a Federal
agency shall submit its initial indirect cost proposal immAHiatrfy after the organization is advised that an
award will be made and, in no event, later than three months after the effective date of the award.
c. Organizations that have previously established indirect cost rates must submit a new indirect cost
proposal to the cognizant agency within six months after the close of each fiscal year.
d. A predetermined rate may be negotiated for use on awards where there is reasonable assurance, based
on past experience and reliable projection of the organization's costs, that the rate is not likely to exceed
a rate based on the organization's actual costs.
1 rates may be negotiated where predetermined rates are not considered appropriate. A fixed rate,
r, shall not be negotiated if (i) all or a substantial portion of the organization's awards are
e. Fixed:
however, „
expected to expire before the carry-forward adjustment can be made; (ii) the mix of Federal and
non-Federal work at the organization is too erratic to permit an equitable carry-forward adjustment; or
(iii) the organization's operations fluctuate significantly from year to year.
f. Provisional and final rates shall be negotiated where neither predetermined nor fixed rates are
appropriate.
g. The results of each negotiation shall be formalized in a written agreement between the cognizant
agency and the non-profit organization. The cognizant agency shall distribute copies of the agreement to
all concerned Federal agencies.
h. If a dispute arises in a negotiation of an indirect cost rate between the cognizant agency and the
non-profit organization, the dispute shall be resolved in accordance with the appeals procedures of the
cognizant agency.
i. To the extent that problems are encountered among the Federal agencies in connection with the
negotiation and approval process, OMB will lend assistance as required to resolve such problems in a
timely manner.
ATTACHMENT B
Circular No. A-122
SELECTED ITEMS OF COST
Table of Contents
1. Advertising and public relations costs
2. Alcoholic beverages
3. Bad debts
4. Bid and proposal costs (reserved)
5. Bonding costs
6 Communication costs
7. Compensation for personal services
8. Contingency provisions
9. Contributions
10. Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringement
11. Depreciation and use allowances
12. Donations
13. Employee morale, health, and welfare costs and credits
14. Entertainment costs
IS. Equipment and other capital expenditures
16. Fines and penalties
17. Fringe benefits
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OMB Circular A-122
tap://www.wfaitehouse.gov/W^
1 8. Goods or services for personal use
19. Housing and personal living expenses
20. Idle facilities and idle capacity
21. Independent research and development (reserved)
22. Insurance and indemnification
23. Interest, fund raising, and investment management costs
24. Labor relations costs
25. Lobbying
26. Losses on other awards
27. Maintenance and repair costs
28. Materials and supplies
29. Meetings and conferences
30. Memberships, subscriptions, and professional activity costs
31. t*rpflttiy^tion costs
32. Overtime, extra-pay shift, and multi-shift premium*!
33. Page charges in professional journals
34. Participant support costs
35. Patent costs
36. Pension plans
37. Plant security costs
38. Pre-award costs
39. Professional service costs
40. Profits and losses on disposition of depreciable property or other capital assets
41. Publication and printing costs
42. Rearrangement and alteration costs
43. Reconversion costs
44. Recruiting costs
45. Relocation costs
46. Rental costs
47. Royalties and other costs for use of patents and copyrights
48. Selling and marketing
49. Severance pay
50. Specialized service facilities
51. Taxes
52. Termination costs
53. Training and education costs
54. Transportation costs
55. Travel costs
56. Trustees
ATTACHMENT B
Circular No. A-122
SELECTED ITEMS OF COST
Paragraphs 1 through 56 provide principles to be applied in establishing the allowability of certain
items of cost. These principles apply whether a cost is treated as direct or indirect. Failure to mention a
particular item of cost is not intended to imply that it is unallowable; rather, determination as to
allowability in each case should be based on the treatment or principles provided for similar or related
items or cost.
1. Advertising and public relations costs.
a. The term advertising costs means the costs of advertising media and corollary administrative costs
AoVerusing media include magazines, newspapers, radio and television programs, direct mail exhibits,
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b. The tenn public relations includes community relations and means those activities dedicated to
maintaining the image of the organization or maintaining or promoting understanding and favorable
relations with the community or public at large or any segment of the public.
c. The only allowable advertising costs are those which are solely for:
(1) The recruitment of personnel required for the performance by the organization of obligations arising
under a sponsored award, when considered in conjunction with all other recruitment costs, as set forth in
paragraph 44 ("Recruiting costs");
(2) The procurement of goods and services for the performance of a sponsored award;
(3) The disposal of scrap or surplus materials acquired in the performance of a sponsored award except
when organizations are reimbursed for disposal costs at a predetermined amount in accordance with
OMB Circular A-l 10, Sec. .34, "Equipment"; or
(4) Other specific purposes necessary to meet the requirements of the sponsored award.
d. The only allowable public relations costs are:
(1) Costs specifically required by sponsored awards;
(2) Costs of communicating with the public and press pertaining to specific activities. OL^- , I.C.-L .- r
accomplishments which result from performance of sponsored awards (these costs areronsiderede
necessary as part of the outreach effort for the sponsored awards); or
(3) Costs of conducting general liaison with news media and government public relations officers, to the
extent that such activities are limited to communication and liaison necessary to keep the public
informed on matters of public concern, such as notices of contract/grant awards, financial matters, etc.
e. Costs identified in subparagraphs c and d if incurred for more than one sponsored award or for both
sponsored work and other work of the organization, are allowable to the extent that the principles in
paragraphs B ("Direct Costs") and C ("Indirect Costs") of Attachment A are observed.
f. Unallowable advertising and public relations costs include the following:
(1) All advertising and public relations costs other than as specified in subparagraphs c, d, and e;
(2) Costs of meetings or other events related to fund raising or other organizational activities including:
(i) Costs of displays, demonstrations, and exhibits;
(ii) Costs of meeting rooms, hospitality suites, and other special facilities used in conjunction with
shows and other special events; and
(iii) Salaries and wages of employees or cost of services engaged in setting up and displaying exhibits,
making demonstrations, and providing briefings;
(3) Costs of promotional items and memorabilia, including models, gifts, and souvenirs;
(4) Costs of advertising and public relations designed solely to promote the organization.
2. Alcoholic beverages. Costs of alcoholic beverages are unallowable.
3 Bad debts. Bad debts, including losses (whether actual or estimated) arising from uncollectible
accounts and other claims, related collection costs, and related legal costs, are unallowable.
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OMB Circular A-122
4. Bid and proposal costs, (reserved)
5. Bonding costs.
a Bonding costs anse when the Federal Government requires assurance against financial loss to itself or
others by reason of the act or default of the organization. They arise also iL instance! where Ac
organizanpn requires sinular assurance. Included are such bonds as bid, performance parent advance
payment, infringement, and fidelity bonds. *«*«»":, payment, advance
b. Costs of bonding required pursuant to the terms of the award are allowable.
c Costs of bonding required by the organization in the general conduct of its operations are
the extent that such bonding is in accordance with sound busiiu^inactiaaiidS^md
are reasonable under the circumstances. ^^^
6 .Conunumcarion costs. Costs incurred for telephone services, local and long distance teleohone calls
telegrams, radiograms, postage and the like are allowable. «*««* waepnone calls,
7. Compensation for personal services.
a. Definition. Compensation for personal services includes all compensation paid currendv or accrued
by the organization for services of employees rendered during the period of the award (excem as
otherwise provided in subparagraph h). It includes, but is not limited to, salaries, wages director's and
execute committee member's fees, incentive awards, fringe benefits, pension plants a^waras
for off-site pay, incentive pay, location allowances, hardship pay, and coTof living differentials
b. AHowability. Except as otherwise specifically provided in this paragraph, the costs of such
compensation are allowable to the extent that: »ww»uwi
(1) Total compensation to individual employees is reasonable for the services rendered and conforms to
the established policy of the organization consistently applied to both Federal and non-Federal 1 acSrities-
duo '
c. Reasonableness.
£1*™^ ** o*****"* is predominantly engaged in activities other than those sponsored by the
Federal Government, compensation for employees on federally-sponsored work will be considered
reasonable to the extent that it is consistent with that paid for similar work in the oreanization's othe-
activities.
for employees on federally-sponsored
activities, compensati
__ , _—r , • • — •«« —i^wjww wu *w«aujr-9|AMi»uieu wor& win DC consioercu reaso
the extent that it is comparable to that paid for similar work in the labor markers in which the
nrcanirntinn or\mnAtAc frvr *KA L4m«1 ^^ ^^.^1^..^^. : i j
•• • • ~~ ~^ ^ • ™^^»^w^«»«^» »«r KAAOAb • niii>a A^l ^AAJXAA^U WUAJ
organization competes for the kind of employees involved
d Speaal considerations m determining allowabilitv. Certain conditions require special coniio- • •
and possible Imitations in determining costs under Federal awards where amoum' 01 tvnes of
compensation appear unreasonable. Among such conditions are the foUoxvinc:
(1) Compensation to members of non-profit organizations, trustees, directors, associates oface- t ••• the
immediate families thereof. Determination should be made that such compensation is reasonable for the
actual personal services rendered rather than a distribution of earnings in excess of costs
«ofS6 ,„_
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MB Circular A-122 tap7Avvw.whJtebouse.gov/WH/EOP/OMB/html/ciroulars/al22/al22J^
(2) Any change in an organization's compensation policy resulting in a substantial increase in the
organization's level of compensation, particularly when it was concurrent with an increase in the ratio of
Federal awards to other activities of the organization or any change in the treatment of allowability of
specific types of compensation due to changes in Federal policy.
e. Unallowable costs. Costs which are unallowable under other paragraphs of this Attachment shall not
be allowable under this paragraph solely on the basis that they constitute personal compensation.
f. Fringe benefits.
(1) Fringe benefits in the form of regular compensation paid to employees during periods of authorized
absences from the job, such as vacation leave, sick leave, military leave, and the like, are allowable,
provided such costs are absorbed by all organization activities in proportion to the relative amount of
time or effort actually devoted to each.
(2) Fringe benefits in the form of employer contributions or expenses for social security, employee
insurance, workmen's compensation insurance, pension plan costs (see snbparagraph h), and the like,
are allowable, provided such benefits are granted in accordance with established written organization
policies. Such benefits whether treated as indirect costs or as direct costs, shall be distributed to
particular awards and other activities in a manner consistent with the pattern of benefits accruing to the
individuals or group of employees whose salaries and wages are chargeable to such awards and other
activities.
(3) (a) Provisions for a reserve under a self-insurance program for unemployment compensation or
workers' compensation are allowable to the extent that the provisions represent reasonable estimates of
the liabilities for such compensation, and the types of coverage, extent of coverage, and rates and
premiums would have been allowable had insurance been purchased to cover the risks. However,
provisions for self-insured liabilities which do not become payable for more than one year after die
provision is made shall not exceed the present value of the liability.
(b) Where an organization follows a consistent policy of expensing actual payments to, or on behalf of,
employees or former employees for unemployment compensation or workers' compensation, such
payments are allowable in the year of payment with the prior approval of the awarding agency, provided
they are allocated to all activities of the organization.
(4) Costs of insurance on the lives of trustees, officers, or other employees holding positions of similar
responsibility are allowable only to the extent that the insurance represents additional compensation.
The costs of such insurance when the organization is named as beneficiary are unallowable.
g OrgpniMn'on-furnished automobiles. That portion of the cost of organization-furnished automobiles
that relates to personal use by employees (including transportation to and from work) is unallowable as
fringe benefit or indirect costs regardless of whether the cost is reported as taxable income to the
employees. These costs are allowable as direct costs to sponsored award when necessary for the
performance of the sponsored award and approved by awarding agencies.
h. Pension plan costs.
CD Costs of the organization's pension plan which are incurred in accordance with the established
policies of the organization are allowable, provided:
(a) Such policies meet the test of reasonableness;
(b) The methods of cost allocation are not discriminatory;
(c) The cost assigned to each fiscal year is determined in accordance with generally accepted accounting
principles (GAAP), as prescribed in Accounting Principles Board Opinion No. 8 issued by the American
Institute of Certified Public Accountants; and
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foe end of that year. However .increases to normal and past service nensioiTcosts caused by aXviT
'
(2) Pension plan termination insurance premiums paid pursuant to the Employee Retirem
SA) °f 1974 ^ L" 93-4°6 "" aU°Wable- y
ent
unaltowabl**" °n accumulated *"<&« deficiencies and other penalties imposed under ERIS A are
i. Incentive compensation. Incentive compensation to employees based on cost
, or e
performance, suggestion awards, safety awards, etc., are alloable to the extent ebv^aU
compensation isdetemuned to be reasonable and such costs are paid or accrued pursuant to m
agreement entered into in good faith between the organization and the employees before the services
were rendered, or pursuant to an established plan Mowed by me c^aniritio^ cStentiylTto
imply, in effect, an agreement to make such payment. ^mmmxauy as m
j Overtime, extra-pay shift, and multi-shift premiums. See paragraph 32.
k. Severance pay. See paragraph 49.
1- Training and education costs. See paragraph 53.
m. Support of salaries and wages.
(1) Charges to awards for salaries and wages, whether treated as direct costs or indirect costs will be
based on documented payrolls approved by a responsible official(s) of the organization. The distribution
of salaries and wages to awards must be supported by personnel activity reports, as prescribed in
subparagraph (2), except when a substitute system has been approved in writing by the cognizant
agency. (See rabparagraph £.2 of Attachment A.) «=w,gm«nn
(2) Reports reflecting the distribution of activity of each employee must be maintained for all staff
members (professionals and nonprofessionals) whose compensation is charged, in whole or in uart
du-ectly to awards. In addition, in order to support the allocation of indirect costs, such reports kust also
be maintained for other employees whose work involves two or more functions or activities if a
distribution of their compensation between such functions or activities is needed in the determination of
the organization s indirect cost rate(s) (e.g., an employee engaged part-time in indirect cost activities and
part-time in a direct function). Reports maintained by non-profit organizations to satisfy these
requirements must meet the following standards:
(a) The reports must reflect an qfter-the-fact detennination of the actual activity of each employee
for d^S^awffot' eStmaleS detennined before to services are performed) do not qualify as support
(b) Each report must account for the total activity for which employees are compensated and which is
required in fulfillment of their obligations to the organisation
(c) The reports must be signed by the individual employee, or by a responsible supervisory official
having first hand knowledge of the activities performed by the employee, that the distribution of activity
represents a reasonable estimate of the actual work performed by the employee during the periods
covered by the reports. B *~""»
(d) The reports must be prepared at least monthly and must coincide with one or more pay periods.
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(3) Charges for the salaries and wages of nonprofessional employees, in addition to the supporting
documentation described in subparagraphs (1) and (2), must also be supported by records indicating
the total number of hours worked each day maintained in confonnance with Department of Labor
regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR Part 516). For this purpose,
the term "nonprofessional employee" shall have the same meaning as "nonexempt employee," under
FLSA.
(4) Salaries and wages of employees used in meeting cost sharing or matching requirements on awards
must be supported in the same manner as salaries and wages claimed for reimbursement from awarding
agencies.
g Co"rinpencv provisions. Contributions to a contingency reserve or any similar provision made for
events the occurrence ofwhich cannot be foretold with certainty as to time, intensity, or with an
assurance of their happening, are unallowable. The term "contingency reserve" excludes self-insurance
reserves (see subparagraphs 7.f (3) and 22.a(2)(d); pension funds (see subparagraph 7.h); and
reserves for normal severance pay (see subparagraph 49.b(l)).
9. Contributions. Contributions and donations by the organization to others are unallowable.
10. Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringement.
a. Definitions.
(1) Conviction, as used herein, means a judgment or a conviction of a criminal offense by any court of
competent jurisdiction, whether entered upon as a verdict or a plea, including a conviction due to a plea
of nolo contendere.
(2) Costs include, but are not limited to, administrative and clerical expenses; the cost of legal services,
whether performed by in-house or private counsel; and the costs of the services of accountants,
consultants, or others retained by the organization to assist it; costs of employees, officers and trustees,
and any similar costs incurred before, during, and after commencement of a judicial or administrative
proceeding that bears a direct relationship to the proceedings.
(3) Fraud, as used herein, means (i) acts of fraud corruption or attempts to defraud the Federal
Government or to corrupt its agents, (ii) acts that constitute a cause for debarment or suspension (as
specified in agency regulations), and (iii) acts which violate the False Claims Act, 31 U.S.C., sections
3729-3731, or the Anti-Kickback Act, 41 U.S.C., sections 51 and 54.
(4) Penalty does not include restitution, reimbursement, or compensatory damages.
(5) Proceeding includes an investigation.
b (1) Except as otherwise described herein, costs incurred in connection with any criminal, civil or
administrative proceeding (including filing of a false certification) commenced by the Federal
Government, or a State, local or foreign government, are not allowable if the proceeding: (1) relates to a
violation of, or failure to comply with, a Federal, State, local or foreign statute or regulation by the
organization (including its agents and employees), and (2) results in any of the following dispositions:
(a) In a criminal proceeding, a conviction.
(b) In a civil or administrative proceeding involving an allegation of fraud or similar misconduct, a
determination of organizatioi
(c) In the case of any civil or administrative proceeding, the imposition of a monetary penalty.
(d) A final decision by an appropriate Federal official to debar or suspend the organization, to rescind or
void an award, or to terminate an award for default by reason of a violation or failure to comply with a
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law or regulation.
y consent or compromise, if the action could have resulted in any of the dispositions
I), (c) or (d). r
v ,, u „ ' °.°,e Process involves the same alleged misconduct, the costs of all such
shall be unallowable if any one of them results in one of the dispositions shown in
c. If a proceeding referred to in subparagraph b is commenced by the Federal Government and is
T£^&2^°1^£(™* ^Sf ? assent entered into by the organization and the
Federal Government, then the costs incurred by the orgaxuzation m cxmnection wrm such iroceedines
that are otherwe ^
that are otherwise not allowable under subparagraph b may be allowed to the extent
provided in such agreement.
d. If a Proceeding, referred to in snbparagraph b is commenced by a State, local or foreign government
the authorized Federal official may allow the costs incurred by the organization for such S)leeoS tf
such authorized official determines that the costs were incurred as a result of (1) a specific term or '
condition of a federally-sponsored award, or (2) specific written direction of an authorized official of
the sponsoring agency. ^^ uuiwm 01
e. Costs incurred in connection with proceedings described in snbparagraph b. but whv* w n«* — -•
unallowable by that subparagraph, may be allowed by the Federal Government bi- •?' ,. -
thatr -»-*
(1) The costs are reasonable in relation to the activities required to deal with the proceedum aua tne
underlying cause of action; v ««ui6 ««* uic
(2) Payment of the costs incurred, as allowable and allocable costs, is not prohibited by anv other
provision(s) of me sponsored award; y
(3) The costs are not otherwise recovered from the Federal Government or a third party either directlv
as a result of the proceeding or otherwise; and, u^ecuy
W Tkf Percentage of costs allowed does not exceed the percentage determined by an authorized Federal
official to be appropriate, considering the complexity of the litigation, generally accepted principles
governing the award of legal fees in civil actions involving the United States as a party, and such other
factors as may be appropriate. Such percentage shall not exceed 80 percent. However, if an agreement
reached under snbparagraph c has explicitly considered this 80 percent limitation and permitted a
higher percentage, then the full amount of costs resulting from that agreement shall be allowable.
f. Costs incurred by the organization in connection with the defense of suits brought by its emolovees or
ex-employees under section 2 of the Major Fraud Act of 1988 (Pub. L. 100-700), includi^ the ri; Gf
aU relief necessary to make such employee whole, where the organization was found liable or sen lee
are unallowable. ' :
g. Costs of legal, accounting, and consultant services, and related costs, incurred in connection wirh
defense against Federal Government claims or appeals, antitrust suits, or the prosecution of claims or
appeals against the Federal Government are unallowable.
h. Costs of legal, accounting, and consultant services, and related costs, incurred in connection wit*
patent infringement litigation, are unallowable unless otherwise provided for in the sponsored awards.
i. Costs which may be unallowable under this paragraph, including directly associated costs, sha!] le
segregated and accounted for by the organization separately. During the pendency of any proceedii^
covered by subparagraphs b and f, the Federal Government shall generally withhold payment of such
costs. However, if in the best interests of the Federal Government, me Federal Government may provide
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for conditional payment upon provision of adgqi'*** security, or other adequate assurance, and
agreements by toe organization to repay all unallowable costs, plus interest, if the costs are subsequently
determined to be unallowable.
11. Depreciation and use allowances.
a. Compensation for the use of buildings, other capital improvements, and equipment on hand may be
made through use allowances or depreciation. However, except as provided in sobparagraph f, a
combination of the two methods may not be used in connection with a single class of fixed assets (e.g.,
buildings, office equipment, computer equipment, etc.).
b. The computation of use allowances or depreciation shall be based on the acquisition cost of the assets
involved. The acquisition cost of an asset donated to the organization by a third party shall be its fair
market value at the time of the donation.
c. The computation of use allowances or depreciation will exclude:
(1) The cost of land;
(2) Any portion of the cost of buildings and equipment borne by or donated by the Federal Government
irrespective of where title was originally vested or where it presently resides; and
(3) Any portion of the cost of buildings and equipment contributed by or for the organization in
satisfaction of a statutory matching requirement.
d. Where the use allowance method is followed, the use allowance for buildings and improvement
(including land improvements, such as paved parking areas, fences, and sidewalks) will be computed at
an annual rate not exceeding two percent of acquisition cost. The use allowance for equipment will be
computed at an annual rate not exceeding six and two-thirds percent of acquisition cost. When the use
allowance method is used for buildings, the entire building must be treated as a single asset; the
building's components (e.g., plumbing system, heating and air conditioning, etc.) cannot be segregated
from the building's shell. The two percent limitation, however, need not be applied to equipment which
is merely attached or fastened to the building but not permanently fixed to it and which is used as
furnishings or decorations or for specialized purposes (e.g., dentist chaos and dental treatment units,
counters, laboratory benches bolted to the floor, dishwashers, carpeting, etc.). Such equipment will be
considered as not being permanently fixed to the building if it can be removed without the need for
costly or extensive alterations or repairs to the building or the equipment. Equipment that meets these
criteria will be subject to the six and two-thirds percent equipment use allowance limitation.
e. Where depreciation method is followed, the period of useful service (useful life) established in each
case for usable capital assets must take into consideration such factors as type of construction, nature of
the equipment used, technological developments in the particular program area, and the renewal and
replacement policies followed for the individual items or classes of assets involved. The method of
depreciation used to assign the cost of an asset (or group of assets) to accounting periods shall reflect the
pattern of consumption of the asset during its useful life. In the absence of clear evidence indicating that
the expected consumption of the asset will be significantly greater or lesser in the early portions of its
useful life than in the later portions, the straight-line method shall be presumed to be the appropriate
method. Depreciation methods once used shall not be changed unless approved in advance by the
cognizant Federal agency. When the depreciation method is introduced for application to assets
previously subject to a use allowance, the combination of use allowances and depreciation applicable to
such assets must not exceed the total acquisition cost of the assets. When the depreciation method is
used for buildings, a building's shell may be segregated from each building component (e.g., plumbing
system heating and air conditioning system, etc.) and each item depreciated over its estimated useful
life; or'the entire building (i.e., the shell and all components) may be treated as a single asset and
depreciated over a single useful life.
f. When the depreciation method is used for a particular class of assets, no depreciation may be allowed
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on any such assets that, under subparagraph e, would be viewed as fully depreciated. However a
reasonable use allowance may be negotiated for such assets if warranted aftehatong into consSeAno
the amount of depreciation previously charged to the Federal Government, theesSated usefulSe
remaining at tune of negotiation, the effect of any increased maintenance charges or decreased
CUted6 10 age' 8ny Othei" faCt0rS pertinent to ±e uril»2arion of the asset for the purpose
g. Charges for use allowances or depreciation must be supported by adequate property records and
physical inventories must be taken at least once every two years (a statistical sWbuni basis is
acceptable) to ensure that assets exist and are usable and needed. When the depreciatiOT method is
aUo°be^al2Suned epreciatlon recofds mdicating me ^omi of depreciation taken each period must
12. Donations.
a. Services received.
(1) Donated or volunteer services may be furnished to an organization by professional and technical
personnel, consultants, and other skilled and unskilled labor. The value of these services is not
reimbursable earner as a direct or indirect cost.
(2) The value of donated services utilized in the performance of a direct cost activity shall be considered
in the determination of the organization's indirect cost rate(s) and, accordingly, shall be allocated a
proportionate share of applicable indirect costs when the following circumstances exist:
(a) The aggregate value of the services is material;
(b) The services are supported by a significant amount of the indirect costs incurred by the organization;
(c) The direct cost activity is not pursued primarily for the benefit of the Federal Government,
(3) In those instances where there is no basis for determining the fair market value of the services
rendered, the recipient and the cognizant agency shall negotiate an appropriate allocation of indirect cost
to tne services.
(4) Where donated services directly benefit a project supported by an award, the indirect costs allocated
to the services will be considered as a part of the total costs of the project. Such indirect costs may be
reimbursed under the award or used to meet cost sharing or matching requirements.
(5) The value of the donated services may be used to meet cost snaring or matching requirements under
conditions described in Sec 23 of Circular A-l 10. Where donated services anTtreated as indirect
costs, indirect cost rates will separate the value of the donations so that reimbursement will not be made.
(6) Fair market value of donated services shall be computed as follows:
(?) Rates for volunteer services. Rates for volunteers shall be consistent with those regular rates paid for
similar work in other activities of the organization. In cases where the kinds of skills involved arenot
found in other activities of the organization, the rates used shall be consistent with those paid for similar
work in the labor market in which the organization competes for such skills.
(J>) Services donated by other organizations. When an employer donates the services of an emplovee
these services snail be valued at the employee's regular rate of pay (exclusive of fringe benefit aid '
indirect costs), provided die services are in the same skill for which the employee is normally paid If
the services are not in die same skill for which die employee is normally paid, fair market value shall be
computed in accordance widi subparagraph (a).
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b. Goods and space.
(1) Donated goods; i.e., expendable personal property/supplies, and donated use of space may be
furnished to an organization. The value of the goods and space is not reimbursable either as a direct or
indirect cost.
(2) The value of the donations may be used to meet cost sharing or matching share requirements under
the conditions described in Sec._.23 of Circular A-110. The value of the donations shall be determined
in accordance with Sec. .23 of Circular A-l 10. Where donations are treated as indirect costs, indirect
cost rates will separate the value of the donations so that reimbursement will not be made.
13. Employee morale, health, and welfare costs and credits. The costs of house publications, health or
fir^t-aifTrlinies, and/or infirmaries, recreational activities, employees' counseling services, and other
expenses incurred in accordance with the organization's established practice or custom for the
improvement of working conditions, employer-employee relations, employee morale, and employee
performance are allowable. Such costs will be equitably apportioned to all activities of the organization.
Income generated from any of these activities will be credited to the cost thereof unless such income has
been irrevocably set over to employee welfare organizations.
14. Entertainment costs. Costs of amusement, diversion, social activities, ceremonials, and costs relating
thereto, such as mealsTlodging, rentals, transportation, and gratuities are unallowable (but see
paragraphs 13 and 30).
15. Equipment and other capital expenditures.
a. As used in this paragraph, the following terms have the meanings set forth below:
(1) "Equipment" means an article of nonexpendable, tangible personal property having a useful life of
more than one year and an acquisition cost which equals or exceeds the lesser of (a) the capitalization
level established by the organization for the financial statement purposes, or (b) $5000. The
unamortized portion of any equipment written off as a result of a change in capitalization levels may be
recovered by continuing to claim the otherwise allowable use allowances or depreciation on the
equipment, or by amortizing the amount to be written off over a period of years as negotiated with the
Federal cognizant agency.
/2) Acquisition cost means the net invoice unit price of an item of equipment, including the cost of any
modifications, attachments, accessories, or auxiliary apparatus necessary to make it usable for the
purpose for which it is acquired Ancillary charges, such as taxes, duty, protective in-transit insurance,
freight, and installation shall be included in or excluded from acquisition cost in accordance with the
organization's regular written accounting practices.
H) Special purpose equipment means equipment which is usable only for research, medical, scientific,
or t^-iinimi activities/Examples of special purpose equipment include microscopes, x-ray machines,
surgical instruments, and spectrometers.
/4\ General purpose equipment means equipment which is usable for other than research, medical,
scientific, or technical activities, whether or not special modifications are needed to make them suitable
for a particular purpose. Examples of general purpose equipment include office equipment and
furnishings, air conditioning equipment, reproduction and printing equipment, motor vehicles, and
automatic data processing equipment.
b. (1) Capital expenditures for general purpose equipment are unallowable as a direct cost except with
die prior approval of the awarding agency.
(2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items
with a unit cost of $5000 or more have the prior approval of awarding agency.
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c. Capital expenditures for land or buildings are unallowable as a direct cost except with the mior
approval of die awarding agency. H
d Cap**1 ^P60^1"1^ for improvements to land, buildings, or equipment which materially increase
their value or useful life are unallowable as a direct cost except with the prior approval of me adding
agency
e Rpiipment and other capital expenditures are unallowable as indirect costs. However, see parafiraDh
11 for allowability of use allowances or depreciation on buildings, capital improvements and
equipment. Also, see paragraph 46 for allowability of rental costs for land, buildings, and equipment.
16. Fines and penalties. Costs of fines and penalties resulting from violations of, or failure of the
organization to comply with Federal, State, and local laws and regulations are unallowable except when
mcunedas a result of compliance with specific provisions of an awarf or instnictions m writingfiom
the awarding agency. ^*
17. Fringe benefits. See rabparagraph 7.f.
18- Goods or services for personal use. Costs of goods or services for personal use of the organization's
employees are unallowable regarHIeF of whether the cost is leported as taxable income to the
employees.
19. Housing and personal living expenses.
a. Costs of housing (e.g., depreciation, maintenance, utilities, furnishings, rent, etc ) housing
allowances and personal living expenses for/of the organization's officers are unallowable as fringe
benefit or indirect costs regardless of whether the cost is reported as taxable income to the employees
These costs are allowable as direct costs to sponsored award when necessary for the performance of the
sponsored award and approved by awarding agencies.
b. The term "officers" includes current and past officers and employees.
20. Idle facilities and idle capacity.
a. As used in this paragraph, the following terms have the meanings set forth below:
(1) Facilities means land and buildings or any portion thereof, equipment individually or collectively or
any other tangible capital asset, wherever located, and whether owned or leased by the organization
(2) Idle facilities means completely unused facilities that are excess to the organization's current needs.
(3) Idle capacity means the unused capacity of partially used facilities. It is the difference between that
which a facility could achieve under 100 percent operating time on a one-shift basis less operating
interruptions resulting from time lost for repairs, setups, unsatisfactory materials, and other normal
delays, and the extent to which the facility was actually used to meet demands during the accounting
period. A multi-shift basis may be used if it can be shown that this amount of usage could normalJv be
expected for the type of facility involved. y
(4) Costs of idle facilities or idle capacity means costs such as maintenance, repair, housing rent, and
other related costs, e.g., property taxes, insurance, and depreciation or use allowances.
b. The costs of idle facilities are unallowable except to the extent that:
(1) They are necessary to meet fluctuations in workload; or
(2) Although not necessary to meet fluctuations in workload, they were necessary when acquired and
are now idle because of changes in program requirements, efforts to achieve more economical
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operations, reorganization, termination, or other causes which could not have been reasonably foreseen.
Under the exception stated in this subparagraph, costs of idle facilities are allowable for a reasonable
period of time, ordinarily not to exceed one year, depending upon the initiative taken to use, lease, or
dispose of such facilities (but see snbparagraphs 48.b and d).
c. The costs of idle capacity are normal costs of doing business and are a factor in the normal
fluctuations of usage or indirect cost rates from period to period. Such costs are allowable, provided the
capacity is reasonably anticipated to be necessary or was originally reasonable and is not subject to
reduction or elimination by subletting, renting, or sale, in accordance with sound business, economics,
or security practices. Widespread idle capacity throughout an entire facility or among a group of assets
having substantially the same function may be idle facilities.
21. Independent research and development. [Reserved]
22. Insurance and indemnification.
a. Insurance includes insurance which the organization is required to cany, or which is approved, under
the terms of the award and any other insurance which the organization maintains in connection with the
general conduct of its operations. This paragraph does not apply to insurance which represents fringe
benefits for employees (see subparagraphs 7.f and 7.h(2)).
(1) Costs of insurance required or approved, and maintained, pursuant to the award are allowable.
(2) Costs of other insurance maintained by the organization in connection with the general conduct of its
operations are allowable subject to the following limitations:
(a) Types and extent of coverage shall be in accordance with sound business practice and the rates and
premiums shall be reasonable under the circumstances.
(b) Costs allowed for business interruption or other similar insurance shall be limited to exclude
coverage of management fees.
(c) Costs of insurance or of any provisions for a reserve covering the risk of loss or damage to Federal
property are allowable only to the extent that the organization is liable for such loss or damage.
(d) Provisions for a reserve under a self-insurance program are allowable to the extent that types of
coverage, extent of coverage, rates, and premiums would have been allowed had insurance been
purchased to cover the risks. However, provision for known or reasonably estimated self-insured
liabilities, which do not become payable for more than one year after the provision is made, shall not
exceed the present value of the liability.
(e) Costs of insurance on the lives of trustees, officers, or other employees holding positions of similar
responsibilities are allowable only to the extent that the insurance represents additional compensation
(see subparagraph 7.f(4)). The cost of such insurance when the organization is identified as the
beneficiary is unallowable.
(f) Insurance against defects. Costs of insurance with respect to any costs incurred to correct defects in
the organization's materials or workmanship are unallowable.
(g) Medical liability (malpractice) insurance. Medical liability insurance is an allowable cost of Federal
research programs only to the extent that the Federal research programs involve human subjects or
training of participants in research techniques. Medical liability insurance costs shall be treated as a
direct cost and shall be assigned to individual projects based on the manner in which the insurer
allocates the risk to the population covered by the insurance.
(3) Actual losses which could have been covered by permissible insurance (through the purchase of
insurance or a self-insurance program) are unallowable unless expressly provided for in the award,
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except:
(a) Costs incurred because of losses not covered under nominal deductible insurance coverage provided
in keeping with sound business practice are allowable.
(b) Minor losses not covered by insurance, such as spoilage, breakage, and disappearance of supplies
which occur in the ordinary course of operations, are allowable. '
b. Indemnification includes securing the organization against liabilities to third persons and any other
loss or damage, not compensated by insurance or otherwise. The Federal Government is obligated to
indemnify the organization only to the extent expressly provided in the award.
23. Interest, fiindraising. and investment management costs.
a. Interest.
(1) Costs incurred for interest on borrowed capital or temporary use of endowment funds, however
represented, are unallowable. However, interest on debt incurred after the effective date of this revision
to acquire or replace capital assets (including renovations, alterations, equipment, land, and capital
assets acquired through capital leases), acquired after the effective date of this revision and used in
support of sponsored agreements is allowable, provided that:
(a) For facilities acquisitions (excluding renovations and alterations) costing over Sin r.' »TI ••*
Federal Government's reimbursement is expected to equal or exceed 40 percent of an L r • •
non-profit organization prepares, prior to the acquisition or replacement of the capital asi^
justification that demonstrates the need for the facility in the conduct of federally-sponsored activities
Upon request, die needs justification must be provided to the Federal agency with cost cognizance
authority as a prerequisite to the continued alienability of interest on debt and depreciation related to
the facility. The needs justification for the acquisition of a facility should include, at a minimi™ the
following:
A statement of purpose and justification for facility acquisition or replacement
A statement as to why current facilities are not adequate
A statement of planned future use of the facility
A description of the financing agreement to be arranged for the facility
A summary of the building contract with estimated cost information and statement of source and use of
funds
A schedule of planned occupancy dates
(b) For facilities costing over $500,000, the non-profit organization prepares, prior to the acquis.tir-• or
replacement of the facility, a lease/purchase analysis in accordance with the provisions of Sec. .3J
through .37 of Circular A-l 10, which shows thai a financed purchase or capital lease is less costly to
the organization than other leasing alternatives, on a net present value basis. Discount rates used should
be equal to the non-profit organization's anticipated interest rates and should be no higher than the fair
market rate available to the non-profit organization from an unrelated ("arm's length") third-parry. The
lease/purchase analysis shall include a comparison of the net present value of the projected total cost
comparisons of both alternatives over the period the asset is expected to be used by the non-profit
organization. The cost comparisons associated with purchasing the facility shall include the estimated
purchase price, anticipated operating and maintenance costs (including property taxes, if applicable) not
included in the debt financing, less any estimated asset salvage value at the end of the period defined
above. The cost comparison for a capital lease shall include the estimated total lease payments, any
estimated bargain purchase option, operating and maintenance costs, and taxes not included in the
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capital leasing arrangement, less any estimated credits due under the lease at the end of the period
defined above. Projected operating lease costs shall be based on the anticipated cost of leasing
comparable facilities at fair market rates under rental agreements that would be renewed or reestablished
over the period defined above, and any expected maintenance costs and allowable property taxes to be
borne by the non-profit organization directly or as pan of the lease arrangement.
(c) The actual interest cost claimed is predicated upon interest rates that are no higher than the fair
market rate available to the non-profit organization from an unrelated ("arm's length") third party.
(d) Investment earnings, including interest income, on bond or loan principal, pending payment of the
construction or acquisition costs, are used to offset allowable interest cost. Arbitrage earnings reponable
to the Internal Revenue Service are not required to be offset against allowable interest costs.
(e) Reimbursements are limited to the least costly alternative based on the total cost analysis required
under subparagraph (b). For example, if an operating lease is determined to be less costly than
purchasing through debt financing, men reimbursement is limited to the amount determined if leasing
had been used. In all cases where a lease/purchase analysis is performed, Federal reimbursement shall
be based upon the least expensive alternative.
(f) Non-profit organizations are also subject to the following conditions:
(i) Interest on debt incurred to finance or refinance assets acquired before or reacquired after me
effective date of this Circular is not allowable.
(ii) For debt arrangements over SI million, unless the non-profit organization makes an initial equity
contribution to the asset purchase of 25 percent or more, non-profit organizations shall reduce claims for
interest expense by an amount equal to imputed interest gamings on excess cash flow, which is to be
calculated as follows. Annually, non-profit organizations shall prepare a cumulative (from the inception
of the project) report of monthly cash flows that includes inflows and outflows, regardless of the
funding source Inflows consist of depreciation expense, amortization of capitalized construction
interest, and annual interest expense. For cash flow calculations, the annual inflow figures shall be
divided by the number of months in the year (usually 12) that the building is in service for monthly
amounts. Outflows consist of initial equity contributions, debt principal payments (less the pro rata
share attributable to the unallowable costs of land) and interest payments. Where cumulative inflows
exceed cumulative outflows, interest shall be calculated on the excess inflows for that period and be
treated as a reduction to allowable interest expense. The rate of interest to be used to compute earnings
on excess cash flows shall be the three month Treasury Bill closing rate as of the last business day of
that month.
(iii) Substantial relocation of federally-sponsored activities from a facility financed by indebtedness, the
cost of which was funded in whole or pan through Federal reimbursements, to another facility prior to
the expiration of a period of 20 years requires notice to the Federal cognizant agency. The extent of the
relocation, the amount of the Federal participation in the financing, and the depreciation and interest
charged to date may require negotiation and/or downward adjustments of replacement space charged to
Federal programs in the future.
(iv) The allowable costs to acquire facilities and equipment are limited to a fair market value available
to the non-profit organization from an unrelated ("arm's length") third party.
(2) For non-profit organizations subject to "full coverage"' under the Cost Accounting Standards (CAS)
as defined at 48 CFR 9903.201, the interest allowability provisions of subparagraph a do not apply.
Instead, these organizations' sponsored agreements are subject to CAS 414 (48 CFR 9903.414), cost of
money as an element of the cost of facilities capital, and CAS 417 (48 CFR 9903.417), cost of money as
an element of the cost of capital assets under construction.
(3) The following definitions are to be used for purposes of paragraph 23:
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(a) Re-acquired assets means assets held by the non-profit organization prior to the effective date of this
revision that have again come to be held by the organization, whether through repurchase or
refinancing. It does not include assets acquired to replace older assets.
(b) Initial equity contribution means the amount or value of contributions made by non-Federal entities
for the acquisition of the asset or prior to occupancy of facilities.
(c) Asset costs means the capitalizable costs of an asset, including construction costs, acquisition costs
and other such costs capitalized in accordance with GAAP. '
b. Costs of organized fundraising, including financial campaigns, endowment drives, solicitation of gifts
and bequests, and similar expenses incurred solely to raise capital or obtain contributions are
unallowable.
c. Costs of investment counsel and staff and similar expenses incurred solely to enhance income from
investments are unallowable.
d. Fundraising and investment activities shall be allocated an appropriate share of indirect costs under
the conditions described in subparagraph IL3 of Attachment A.
24. Labor relations costs. Costs incurred in maintaining satisfactory relations between the organization
and its employees, including costs of labor management committees, employee publications and other
related activities are allowable.
25. Lobbying.
a. Notwithstanding other provisions of this Circular, costs associated with the following activities are
unallowable:
(I) Attempts to influence the outcomes of any Federal, State, or local election, referendum, initiative, or
similar procedure, through in kind or cash contributions, endorsements, publicity, or similar activity;'
(2) Establishing, administering, contributing to, or paying the expenses of a political party, campaign,
political action committee, or other organization established for the purpose of influencing the outcomes
of elections;
(3) Any attempt to influence: (i) The introduction of Federal or State legislation; or (ii) the enactment or
modification of any pending Federal or State legislation through communication with any member or
employee of the Congress or State legislature (including efforts to influence State or local officials to
engage in similar lobbying activity), or with any Government official or employee in connection with a
decision to sign or veto enrolled legislation;
(4) Any attempt to influence: (i) The introduction of Federal or State legislation; or (ii) the enactment or
modification of any pending Federal or State legislation by preparing, distributing or using publicity or
propaganda, or by urging members of the general public or any segment thereof to contribute to or
participate in any mass demonstration, march, rally, fundraising drive, lobbying campaign or letter
writing or telephone campaign; or
(5) Legislative liaison activities, including attendance at legislative sessions or committee hearings,
gathering information regarding legislation, and analyzing the effect of legislation, when such activities
are carried on in support of or in knowing preparation for an effort to engage in unallowable lobbying.
b. The following activities are excepted from the coverage of subparagraph a:
(1) Providing a technical and factual presentation of information on a topic directly related to the
performance of a grant, contract or other agreement through hearing testimony, statements or letters to
the Congress or a State legislature, or subdivision, member, or cognizant staff member thereof, in
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response to a documented request (including a Congressional Record notice requesting testimony or
statements for die record at a regularly scheduled hearing) made by the recipient member, legislative
body or subdivision, or a cognizant staff member thereof; provided such information is readily
obtainable and can be readily put in deliverable form; and further provided that costs under this section
for travel, lodging or meals are unallowable unless incurred to offer testimony at a regularly scheduled
Congressional hearing pursuant to a written request for such presentation made by the Chairman or
Rank-ing Minority Member of the Committee or Subcommittee conducting such hearing.
(2) Any lobbying made unallowable by sabparagraph a(3) to influence State legislation in order to
directly reduce die cost, or to avoid material impairment of the organization's authority to perform the
grant, contract, or other agreement.
(3) Any activity specifically authorized by statute to be undertaken with funds from the grant, contract,
or other agreement.
c. (1) When an organization seeks reimbursement for indirect costs, total lobbying costs shall be
separately identified in the indirect cost rate proposal, and thereafter treated as other unallowable
activity costs in accordance with the procedures of subparagraph BJ of Attachment A.
(2) Organizations shall submit, as part of the annual indirect cost rate proposal, a certification that the
requirements and standards of this paragraph have been complied with.
(3) Organizations shall maintain adequate records to demonstrate that die determination of costs as
being allowable or unallowable pursuant to paragraph 25 complies with the requirements of this
Circular.
(4) Time logs, calendars, or similar records shall not be required to be created for purposes of
complying with this paragraph during any particular calendar month when: (1) the employee engages in
lobbying (as defined in subparagraphs (a) and (b)) 25 percent or less of the employee's compensated
hours of employment during that calendar month, and (2) within the preceding five-year period, the
organization has not materially misstated allowable or unallowable costs of any nature, including
legislative lobbying costs. When conditions (1) and (2) are met, organizations are not required to
establish records to support the allowabliliy of claimed costs in addition to records already required or
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maintained Also, when conditions (1) and (2) are met, the absence of time logs, calendars, or similar
records will not serve as a basis for disallowing costs by contesting estimates of lobbying time spent by
employees during a calendar month.
(5) Agencies shall establish procedures for resolving in advance, in consultation with OMB, any
significant questions or disagreements concerning the interpretation or application of paragraph 25.
Any such advance resolution shall be binding in any subsequent settlements, audits or investigations
with respect to that grant or contract for purposes of interpretation of this Circular; provided, however,
that mis shall not be construed to prevent a contractor or grantee from contesting the lawfulness of such
a determination.
26. Losses on other awards. Any excess of costs over income on any award is unallowable as a cost of
any other award. This includes, but is not limited to, the organization's contributed portion by reason of
cost sharing agreements or any under-recoveries through negotiation of lump sums for, or ceilings on,
indirect costs.
27. Maifltgnance and repair costs. Costs incurred for necessary maintenance repair, or upkeep of
buildings and equipment (including Federal property unless otherwise provided for) which neither add
to the permanent value of the property nor appreciably prolong its intended life, but keep it in an
efficient operating condition, are allowable. Costs incurred for improvements which add to the
permanent value of the buildings and equipment or appreciably prolong their intended life shall be
treated as capital expenditures (see paragraph 15).
28. Materials and supplies. The costs of materials and supplies necessary to carry out an award are
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cost
29. Meetings and conferences.
b. To the extent that these costs are identifiable with a particular cost
to that objective (see paragon B of Att^mJ^S
meet the general tests of aJlowability, shown in para^ph A
aUowablef meCdngS *"* COnferences hdd to «**»* *• i61"^ administration of the organization are
30. Memberships, subscriptions, and professional activity costs.
allowable^ ** WBanizationls memb««hip in business, technical, and professional organizations are
iuowaWe* *" °IBailizatioi|ls s^cnptions to business, professional, and technical periodicals are
^^ri^SST^i60^6?' J**0 *" ^^ P"15086 » ** dissemination of technical
mfonnation, are allowable. This includes costs of meals, transportation, rental of facilitiesandother
items incidental to such meetings or conferences. onacuines, and otner
°r C0mmunity «B«^on are allowable with prior approval by
e. Costs of membership in any country club or social or dining club or organization are unallowable.
3L ttg^za^mcoste. Eyenditures, such as incorporation fees, brokers' fees, fees to promoters
Sff! or management consultants, attorneys, accountants, or investment wunselor^SS or not
Z?£S? °H OI5TZ?J0I1'-m wnnection wim establishment or reorganization of an ^
are unallowable except with pnor approval of the awarding agency.
tra"Pfiy shi& mdlmultj-*'"ft p«m"mi^ Premiums for overtime, extra-pay shifts auci
are allowable only with the pnor approval of the awarding agacy^xcept:
aWhen necessary to cope with emergencies, such as those resulting from accidents, natural disasters
breakdowns of equipment, or occasional operational bottlenecks ofa sporadic nature. U15asiers.
bjjtoemployees are informing indirect functions, such as administration, maintenance, or
m^^^^ i-
d. When lower overall cost to the Federal Government will result.
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33. Page chafes in professional journals. Page charges for professional journal publications are
allowable as a necessary part of research costs, where:
a. The research papers report work supported by the Federal Government; and
b. The charges are levied impartially on all research papers published by the journal, whether or not by
federally-sponsored authors.
34 Participant support costs. Participant support costs are direct costs for items such as stipends or
subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or
trainees (but not employees) in connection with meetings, conferences, symposia, or training projects.
These costs are allowable with the prior approval of the awarding agency.
35. Patent costs.
a Costs of (i) preparing disclosures, reports, and other documents required by the award and of
searching the art to the extent necessary to make such disclosures, (ii) preparing documents and any
other patent costs in connection with the filing and prosecution of a United States patent application
where title or royalty-free license is required by the Federal Government to be conveyed to the Federal
Government, and (iii) general counseling services relating to patent and copyright matters, such as
advice on patent and copyright laws, regulations, clauses, and employee agreements are allowable (but
see paragraph 39).
b Cost of preparing disclosures, reports, and other documents and of searching the art to the extent
necessary to make disclosures, if not required by the award, are unallowable. Costs in connection with
(i) filing and prosecuting any foreign patent application, or (ii) any United States patent application,
where the award does not require conveying title or a royalty-free license to the Federal Government,
are unallowable (also see paragraph 47).
36. Pension plans. See subparagraph 7.h.
37. Plant security costs. Necessary expenses incurred to comply with Federal security requirements or
for facilities protection, including wages, uniforms, and equipment of personnel are allowable.
38. Pre-award costs. Pre-award costs are those incurred prior to the effective date of the award directly
pursuant to the negotiation and in anticipation of the award where such costs are necessary to comply
with the proposed delivery schedule or period of performance. Such costs are allowable only to the
extent that they would have been allowable if incurred after the date of the award and only with the
written approval of the awarding agency.
39. Professional service costs.
a Costs of professional and consultant services rendered by persons who are members of a particular
profession or possess a special skill, and who are not officers or employees of the organization, are
allowable, subject to subparagraphs b and c when reasonable in relation to the services rendered and
when not contingent upon recovery of the costs from the Federal Government.
b In determining the allowability of costs in a particular case, no single factor or any special
combination of factors is necessarily determinative. However, the following factors are relevant:
(1) The nature and scope of the service rendered in relation to the service required.
(2) The necessity of contracting for the service, considering the organization's capability in the
particular area.
(3) The past pattern of such costs, particularly in the years prior to Federal awards.
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(4) The impact of Federal awards on the organization's business (i.e., what new problems have arisen).
(5) Whether the proportion of Federal work to the organization's total business is such as to influence
the organization in favor of incurring the cost, particularly where the services rendered are not of a
continuing nature and have little relationship to work under Federal grants and contracts.
(6) Whether the service can be performed more economically by direct employment rather than
contracting. ^^
(7) The: qualifications of the individual or concern rendering the service and the customary fees charged.
especially on non-Federal awards. 3 ""^sw*.
(8) Adequacy of the contractual agreement for the service (e.g., description of the service estimate of
tune required, rate of compensation, and termination provisions). '
c. In addition to the factors in snbparagraph b, retainer fees to be allowable must be supported bv
evidence of bona fide services available or rendered. ^
40. Profits and losses on disposition of depreciable property or other capital assets.
a. (1) Gains and losses on sale, retirement, or other disposition of depreciable property shall be included
in the year in which they occur as credits or charges to cost grouping(s) in which the depreciation
applicable to such property was included The amount of the gain or loss to be includedas a credit or
charge to the appropriate cost groupmg(s) shall be the difference between the amount realized on the
property and the undepreciated basis of the property.
(2) Gains and losses on the disposition of depreciable property shall not be recognized as a separate
credit or charge under the following conditions: i*»««=
(a) The gain or loss is processed through a depreciation reserve account and is reflected in the
depreciation allowable under paragraph 11.
(b) The property is given in exchange as pan of the purchase price of a similar item and the eain or loss
is taken into account in determining the depreciation cost basis of the new item.
(c) A loss results from the failure to maintain permissible insurance, except as otherwise provided in
subparagraph 22.a(3). yiuriucu m
(d) Compensation for the use of the property was provided through use allowances in lieu of
depreciation in accordance with paragraph 11.
(e) Gains and losses arising from mass or extraordinary sales, retirements, or other dispositions shall be
considered on a case-by-case basis. »«»™«uiuc
b. Gains or losses of any nature arising from the sale or exchange of property other than ihe prope^
covered in subparagraph a shall be excluded in computing award costs.
41. Publication and printing costs.
a. Publication costs include the costs of printing (including the processes of composition plate-makino
press work binding, and the end products produced by such processes), distribution, promoucn
mailing, and general handling r '
b. If these costs are not identifiable with a particular cost objective, they should be alloca»ed as :ac?~ect
costs to all benefiting activities of the organization.
c. Publication and printing costs are unallowable as direct costs except with the prior approval of the
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awarding agency.
d. The cost of page charges in journals is addressed paragraph 33.
42. Rearrangement and alteration costs. Costs incurred for ordinary or normal rearrangement and
alteration of facilities are allowable. Special arrangement and alteration costs incurred specifically for
the project are allowable with the prior approval of the awarding agency.
43. Reconversion costs. Costs incurred in the restoration or rehabilitation of the organization's facilities
to approximately the same condition existing immediately prior to commencement of Federal awards,
fair wear and tear excepted, are allowable.
44. Recruiting costs.
a. Subject to subparagraphs b, c, and d, and provided that the size of the staff recruited and
maintained is in keeping with workload requirements, costs of "help wanted" advertising, operating
costs of an employment office necessary to secure and maintain an adequate staff, costs of operating an
aptitude and educational testing program, travel costs of employees while engaged hi recruiting
personnel, travel costs of applicants for interviews for prospective employment, and relocation costs
incurred incident to recruitment of new employees, are allowable to the extent that such costs are
incurred pursuant to a well-managed recruitment program. Where the organization uses employment
agencies, costs mat are not in excess of standard commercial rates for such services are allowable.
b. In publications, costs of help wanted advertising that includes color, includes advertising material for
other than recruitment purposes, or is excessive in size (taking into consideration recruitment purposes
for which intended and normal organizational practices in this respect), are unallowable.
c. Costs of help wanted advertising, special emoluments, fringe benefits, and salary allowances incurred
to attract professional personnel from other organizations that do not meet the test of reasonableness or
do not conform with the established practices of the organization, are unallowable.
d Where relocation costs incurred incident to recruitment of a new employee have been allowed either
as an allocable direct or indirect cost, and the newly hired employee resigns for reasons within his
control within twelve months after being hired, the organization will be required to refund or credit such
relocation costs to the Federal Government.
45. Relocation costs.
a. Relocation costs are costs incident to the permanent change of duty assignment (for an indefinite
period or for a stated period of not less than 12 months) of an existing employee or upon recruitment of
a new employee. Relocation costs are allowable, subject to the limitation described in subparagraphs
b, c, and d, provided that:
(1) The move is for the benefit of the employer.
(2) Reimbursement to the employee is in accordance with an established written policy consistently
followed by the employer.
(3) The reimbursement does not exceed the employee's actual (or reasonably estimated) expenses.
b. Allowable relocation costs for current employees are limited to the following:
(1) The costs of transportation of the employee, members of bis immediate family and his household,
and personal effects to the new location.
(2) The costs of finding a new home, such as advance trips by employees and spouses to locate living
quarters and temporary lodging during the transition period, up to maximum period of 30 days,
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including advance trip time.
(3) Closing costs, such as brokerage, legal, and appraisal fees, incident to the disposition of the
employee s former home. These costs, together with those described in (4), are limited to 8 oer cent of
the sales price of the employee's former home. P °
(4) The continuing costs of ownership of the vacant former home after the settlement or lease date of the
employees new permanent home, such as maintenance of buildings and grounds (exclusive of fixine UD
expenses), utilities, taxes, and property insurance. muug p
(5) Other necessary and reasonable expenses normally incident to relocation, such as the costs of
canceling an unexpired lease, disconnecting and reinstalling household appliances and purchasine
insurance against loss of or damages to personal property. The cost of canceling an unexDired lease i«
limited to three times the monthly rental. «*«s»cu>
c. Allowable relocation costs for new employees are limited to those described in (1) and (2) of
subparagraph b. When relocation costs incurred incident to the recruitment of new employees have
been allowed either ^as a direct or indirect cost and the employee resigns for reasons within his control
within 12 months after hue, the organization shall refund or credit the Federal Government for its share
of the cost. However, the costs of travel to an overseas location shall be considered travel costs in
accordance with paragraph 55 and not relocation costs for the purpose of this paragraph if depen
ragrap epenents
are not permitted at the location for any reason and the costs do not include costs of transDortinp^^
household goods. *^ ^
d The following costs related to relocation are unallowable:
(1) Fees and other costs associated with acquiring a new home.
(2) A loss on the sale of a former home.
(3) Continuing mortgage principal and interest payments on a home being sold.
(4) Income taxes paid by an employee related to reimbursed relocation costs.
46. Rental costs.
a. Subject to the limitations described in subparagraphs b through d, rental costs are allowable to the
extent that the rates are reasonable in light of such factors as: rental costs of comparable property if
any; market conditions in the area; alternatives available; and the type, life expectancy, condition! and
value of the property leased.
b. Rental costs under sale and leaseback arrangements are allowable only up to the amount that would
be allowed had the organization continued to own the property.
c. Rental costs under less-than-arms-length leases are allowable only up to the amount that would be
allowed had title to the property vested in the organization. For this purpose, a less-than-arms-length
lease is one under which one party to the lease agreement is able to control or substantially influence the
actions of the other. Such leases include, but are not limited to those between (i) divisions of an
organization; (ii) organizations under common control through common officers, directors, or members
and (iii) an organization and a director, trustee, officer, or key employee of the organization or his
immediate family either directly or through corporations, trusts, or similar arrangements in which they
hold a controlling interest.
d. Rental costs under leases which are required to be treated as capital leases under GAAP, are
allowable only up to the amount that would be allowed had the organization purchased the' property on
the date the lease agreement was executed, i.e., to the amount that minimally would pay for depreciation
or use allowances, maintenance, taxes, and insurance. Interest costs related to capitalized leases are
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allowable to the extent they meet criteria in subparagraph 23.a. Unallowable costs include amounts
paid for profit, management fees, and taxes that would not have been incurred had the organization
purchased the facility.
47. Royalties and other costs for use of patents and copyrights.
a. Royalties on a patent or copyright or amortization of the cost of acquiring by purchase a copyright,
patent, or rights thereto, necessary for the proper performance of the award are allowable unless:
( 1 ) The Federal Government has a license or the right to free use of the patent or copyright.
(2) The patent or copyright has been adjudicated to be invalid, or has been administratively determined
to be invalid.
(3) The patent or copyright is considered to be unenforceable.
(4) The patent or copyright is expired.
b. Special care should be exercised in determining reasonableness where the royalties may have arrived
at as a result of less-than-arm's-length bargaining, e.g.:
(1) Royalties paid to persons, including corporations, affiliated with the organization.
(2) Royalties paid to unaffiliated parties, including corporations, under an agreement entered into in
contemplation that a Federal award would be made.
(3) Royalties paid under an agreement entered into after an award is made to an organization.
c. In any case involving a patent or copyright formerly owned by the organisation, the amount of
royalty allowed should not exceed the cost which would have been allowed had the organization
retained title thereto.
48. Selling and marketing. Costs of selling and nartcftin^ any products or services of the organization
(unless allowed under paragraph 1 as allowable public relations costs) are unallowable. These costs,
however, are allowable as direct costs, with prior approval by awarding agencies, when they are
necessary for the performance of Federal programs.
49. Severance pay.
a. Severance pay, also commonly referred to as dismissal wages, is a payment in addition to regular
salaries and wages, by organizations to workers whose employment is being terminated. Costs of
severance pay are allowable only to the extent that in each case, it is required by (i) law, (ii)
employer-employee agreement, (iii) established policy that constitutes, in effect, an implied agreement
on the organization's part, or (iv) circumstances of the particular employment.
b. Costs of severance payments are divided into two categories as follows:
(1) Actual normal turnover severance payments shall be allocated to all activities; or, where the
organization provides for a reserve for normal severances, such method will be acceptable if the charge
to current operations is reasonable in light of payments actually made for normal severances over a
representative past period, and if amounts charged are allocated to all activities of the organization.
(2) Abnormal or mass severance pay is of such a conjectural nature that measurement of costs by means
of an accrual will not achieve equity to both parties. Thus, accruals for this purpose are not allowable.
However, the Federal Government recognizes its obligation to participate, to the extent of its fair share,
in any specific payment. Thus, allowabih'ty will be considered on a case-by-case basis in the event or
occurrence.
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c. Costs incurred in certain severance pay packages (commonly known as "a golden parachute"
payment) which are in an amount in excess of the normal severance pay paid by the organization to an
employee upon termination of employment and are paid to the employee contingent upon a change in
management control over, or ownership of, the organization's assets are unallowable.
d Severance payments to foreign nationals employed by the organization outside the United States to
the extent that the amount exceeds the customary or prevailing practices for the organization in the'
United States are unallowable, unless they are necessary for the performance of Federal programs and
approved by awarding agencies.
e. Severance payments to foreign nationals employed by the organization outside the United States due
to the termination of the foreign national as a result of the closing of, or curtailment of activities by the
organization in that country, are unallowable, unless they are necessary for the performance of Federal
programs and approved by awarding agencies.
SO. Specialized service faculties.
a. The costs of services provided by highly complex or specialized facilities operated by the
organization, such as electronic computers and wind tunnels, are allowable, provided the charges for the
services meet the conditions of either subparagraph b or c and, in addition, take into account any items
of income or Federal financing that qualify as applicable credits under subparagraph A.5 of
Attachment A.
b. The costs of such services, when material, must be charged directly to applicable awards based on
actual usage of the services on the basis of a schedule of rates or established methodology that (i) does
not discriminate against federally-supported activities of the organization, including usage by the
organization for internal purposes, and (ii) is designed to recover only the aggregate costs of the
services. The costs of each service shall tjtisist normally of both its direct costs and its allocable share
of all indirect costs. Advance agreeme. pursuant to subparagraph A.6 of Attachment A are
particularly important in this situation.
c. Where the costs incurred for a service are not material, they may be allocated as indirect costs.
51. Taxes.
a. In general, taxes which the organization is required to pay and which are paid or accrued in
accordance with GAAP, and payments made to local governments in lieu of taxes which are
commensurate with the local government services received are allowable, except for (i) taxes from
which exemptions are available to the organization directly or which are available to the organization
based on an exemption afforded the Federal Government and in the latter case when the awarding
agency makes available the necessary exemption certificates, (ii) special assessments on land which
represent capital improvements, and (iii) Federal income taxes.
b. Any refund of taxes, and any payment to the organization of interest thereon, which were allowed £i
award costs, will be credited either as a cost reduction or cash refund, as appropriate, to the Federal
Government.
52. Termination costs. Termination of awards generally give rise to the incurrence of costs, or the need
for special treatment of costs, which would not have arisen had the award not been terminated. Cost
principles covering these items are set forth below. They are to be used in conjunction with the other
provisions of this Circular in termination situations.
a. Common items. The cost of items reasonably usable on the organization's other work shall not be
allowable unless the organization submits evidence mat it would not retain such items at cost without
sustaining a loss. In deciding whether such items are reasonably usable on other work of the
organization, the awarding agency should consider the organization's plans and orders for current and
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OMB Circular A- 1 22 http://www.»iiittbouse.govAVH/EOP/OMB/htmI/circulars/al 22/al 22 .html
scheduled activity. Contemporaneous purchases of common items by the organization shall be regarded
as evidence that such items are reasonably usable on the organization's other work. Any acceptance of
common items as allocable to the terminated portion of the award shall be limit^H to the extent that the
quantities of such items on hand, in transit, and on order are in excess of the reasonable quantitative
requirements of other work.
b. Costs continuing after termination. If in a particular case, despite all reasonable efforts by the
r»rganiyatinni certain costs cannot be discontinued immediately after the effective date of termination,
such costs are generally allowable within the limitations set forth in this Circular, except that any such
costs continuing after termination due to the negligent or willful failure of the organization to
discontinue such costs shall be unallowable.
c. Loss of useful value. Loss of useful value of special tooling, machinery and equipment which was not
to the award as a capital expenditure is generally allowable if:
(1) Such special tooling, machinery, or equipment is not reasonably capable of use in the other work of
the organization.
(2) The interest of the Federal Government is protected by transfer of title or by other means deemed
appropriate by the awarding agency;
d. Rental costs. Rental costs under unexpired leases are generally allowable where clearly shown to have
been reasonably necessary for the performance of the terminated award less the residual value of such
leases, if (i) the amount of such rental claimed does not exceed the reasonable use value of the property
leased for the period of the award and such further period as may be reasonable, and (ii) the
organization makes all reasonable efforts to terminate, assign, settle, or otherwise reduce the cost of
such lease. There also may be included the cost of alterations of such leased property, provided such
alterations were necessary for the performance of the award, and of reasonable restoration required by
the provisions of the lease.
e. Settlement expenses. Settlement expenses including the following are generally allowable:
(1) Accounting, legal, clerical, and similar costs reasonably necessary for:
(a) The preparation and presentation to awarding agency of settlement claims and supporting data with
respect to the terminated portion of the award, unless the termination is for default (see Sec. _ .61 of
Circular A- 110); and
(b) The termination and settlement of subawards.
(2) Reasonable costs for the storage, transportation, protection, and disposition of property provided by
the Federal Government or acquired or produced for the award, except when grantees or contractors are
reimbursed for disposals at a predetermined amount in accordance with Sec. _ .30 through _ .37 of
Circular A- 110.
(3) Indirect costs related to salaries and wages incurred as settlement expenses in subparagraphs (1)
and (2). Normally, such indirect costs shall be limited to fringe benefits, occupancy cost, and immediate
supervision.
f. Cl*"ns under subawards. Claims under subawards, including the allocable portion of claims which are
common to the award, and to other work of the organization are generally allowable. An appropriate
share of the organization's indirect expense may be allocated to the amount of settlements with
subcontractors and/or subgrantees, provided that the amount allocated is otherwise consistent with the
basic guidelines contained in Attachment A. The indirect expense so allocated shall exclude the same
and similar costs claimed directly or indirectly as settlement expenses.
S3. Training and education costs.
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OMB Circular A-122 :ww.w
a Costs of preparation and maintenance of a program of instruction including but not limited to
on-the-job, classroom, and apprenticeship training, designed to increase the vocational effectiveness of
employees, including training materials, textbooks, salaries or wages of trainees (excluding overtime
compensation which might arise therefrom), and (i) salaries of the director of training and staff when
the training program is conducted by the organization; or (ii) tuition and fees when the training is in an
institution not operated by the organization, are allowable.
b. Costs of part-time education, at an undergraduate or post-graduate college level, including mat
provided at the organization's own facilities, are allowable only when the course or degree pursued is
relative to the field in which the employee is now working or may reasonably be expected to work, and
are limited to:
(1) Training materials
(2) Textbooks.
(3) Fees charges by the educational institution.
(4) Tuition charged by the educational institution or, in lieu of tuition, instructors' salaries and the
related share of indirect costs of the educational institution to the extent that the sum thereof is not in
excess of the tuition which would have been paid to the participating educational institution.
(5) Salaries and related costs of instructors who are employees of the organization.
(6) Straight-time compensation of each employee for time spent attending classes during working hours
not hi excess of 156 hours per year and only to the extent that circumstances do not permit the operation
of classes or attendance at classes after regular worlriag hours; otherwise, such compensation is
unallowable.
c. Costs of tuition, fees, training materials, and textbooks (but not subsistence, salary, or any other
emoluments) in connection with full-time education, including that provided at the organisation's own
facilities, at a post-graduate (but not undergraduate) college level, are allowable only when the course or
degree pursued is related to the field in which the employee is now working or may reasonably be
expected to work, and only where the costs receive the prior approval of the awarding agency. Such
costs are limited to the costs attributable to a total period not to exceed one school year for each
employee so trained. In unusual cases the period may be extended.
d. Costs of attendance of up to 16 weeks per employee per year at specialized programs specifically
designed to enhance the effectiveness of executives or managers or to prepare employees for such
positions are allowable. Such costs include enrollment fees, training materials, textbooks and related
charges, employees' salaries, subsistence, and travel. Costs allowable under this paragraph do not
include those for courses that are part of a degree-oriented cjniculum, which are allowable only to the
extent set forth in snbparagraphs b and c.
e. Maintenance expense, and normal depreciation or fair rental, on facilities owned or leased by the
organization for training purposes are allowable to the extent set forth in paragraphs 11,27, and 46.
f. Contributions or donations to educational or training institutions, including the donation of facilities
or other properties, and scholarships or fellowships, are unallowable.
g. Training and education costs in excess of those otherwise allowable under snbparagraphs b and c
may be allowed with prior approval of the awarding agency. To be considered for approval, the
organization must demonstrate that such costs are consistently incurred pursuant to an established
training and education program, and that the course or degree pursued is relative to the field in which
the employee is now working or may reasonably be expected to work.
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1MB Circular A-122 hapy/www.whitehouse.gov/WH/EOP/OMB/html/ciiculars/al22yal22 Jrd
54. Transportation costs. Transportation costs include freight, express, cartage, and postage charges
relating either to goods purchased, in process, or delivered. These costs are allowable. When such costs
can readily be identified with the items involved, they may be directly charged as transportation costs or
added to the cost of such items (see paragraph 28). Where identification with die materials received
cannot readily be made, transportation costs may be charged to the appropriate indirect cost accounts if
the organization follows a consistent, equitable procedure in this respect.
55. Travel costs.
a. Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by
employees who are in travel status on official business of the organization. Travel costs are allowable
subject to subparagraphs b through e, when they are directly attributable to specific work under an
award or are incurred in the normal course of administration of the organization.
b. Such costs may be charged on an actual basis, on a per diem or mileage basis in lieu of actual costs
incurred, or on a combination of the two, provided the method used results in charges consistent with
those normally allowed by the organization in its regular operations.
c. The difference in cost between first-class air accommodations and less than first-class air
accommodations is unallowable except when less man first-class air accommodations are not reasonably
available to meet necessarymission requirements, such as where less than first-class accommodations
would (i) require circuitous routing, (ii) require travel during unreasonable hours, (iii) greatly increase
the duration of the flight, (iv) result in additional costs which would offset the transportation savings, or
(v) offer accommodations which are not reasonably adequate for the medical needs of the traveler.
d. Necessary and reasonable costs of family movements and personnel movements of a special or mass
nature are allowable, pursuant to paragraphs 44 and 45, subject to allocation on the basis of work or
time period benefited when appropriate. Advance agreements are particularly important.
e. Direct charges for foreign travel costs are allowable only when the travel has received prior approval
of the awarding agency. Each separate foreign trip must be approved. For purposes of this provision,
foreign travel is defined as any travel outside of Canada and the United States and its territories and
possessions. However, for an organization located in foreign countries, the term "foreign travel" means
travel outside that country.
56. Trustees. Travel and subsistence costs of trustees (or directors) are allowable. The costs are subject
to restrictions regarding lodging, subsistence and air travel costs provided in paragraph 55.
ATTACHMENTC
Circular No. A-122
NON-PROFIT ORGANIZATIONS NOT SUBJECT TO THIS CIRCULAR
Aerospace Corporation, El Segundo, California
Argonne National Laboratory, Chicago, Illinois
Atomic Casualty Commission, Washington, D.C.
Battelle Memorial Institute, Headquartered in Columbus, Ohio
Brookhaven National Laboratory, Upton, New York
Charles Stark Draper Laboratory, Incorporated, Cambridge, Massachusetts
Environmental Institute of Michigan, Ann Arbor, Michigan
Hanford Environmental Health Foundation, Richland, Washington
ITT Research Institute, Chicago, Illinois
Institute for Defense Analysis, Alexandria, Virginia
Mitre Corporation, Bedford, Massachusetts
National Radiological Astronomy Observatory, Green Bank, West Virginia
National Renewable Energy Laboratory, Golden, Colorado
55 of 56 7/17/98 12:23 Pt
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OMB Circular A-122 ^/fc^.wttAonsfcgnv/wT^
Oak Ridge Associated Universities, Oak Ridge, Tennessee
Rand Corporation, Santa Monica, California
Research Triangle Institute, Research Triangle Park, North Carolina
Riverside Research Institute, New York, New York
Southern Research Institute, Birmingham, Alabama
Southwest Research Institute, San Antonio, Texas
SRI International, Menlo Park, California
Syracuse Research Corporation, Syracuse, New York
Universities Research Association, Incorporated (National Acceleration Lab), Argonne Illinois
Non-profit insurance companies, such as Blue Cross and Blue Shield Organizations '
Other non-profit organizations as negotiated with awarding agencies
BILLING CODE 3110-01
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in i/as !•».•> 7 DX>I
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Glossary
Accrued expenditures - the charges incurred by the recipient during a given period
requiring the provision of funds for (1) goods and other tangible property1 received; (2)
services performed by employees, contractors, subrecipients, and other payees, and (3)
other amounts becoming owed under programs for which no current services or
performance is required (such as annuities, insurance claims, and other benefit
payments). (A-102 & A-l 10)
Accrued income - the sum of: (1) earnings during a given period from services
performed by the recipient and goods and other tangible property delivered to purchasers,
and (2) amounts becoming owed to the recipient for which no current services or
performance is required by the recipient. (A-102 & A-l 10)
Acquisition cost of equipment - the net invoice unit price of the equipment, including
the cost of modifications, attachments, accessories, or auxiliary Apparatus necessary to
make the property usable for the purpose for which it was acquired. Other charges such
as the cost of installation, transportation, taxes, duty or protective in-transit insurance,
shall be included or excluded from the unit acquisition cost in accordance with the
recipient's regular accounting practices. (A-102 & A-l 10)
Administrative Order - A legal document signed by EPA directing an individual,
business, or other entity to take corrective action or refrain from an activity. The order
describes the violations and actions to be taken, and can be enforced in court. Such orders
may be issued, for example, as a result of an administrative complaint whereby the
respondent is ordered to pay a penalty for violations of a statue.
Administrative requirements - those matters common to grants in general, such as
financial management, kinds and frequency of reports and retention of records. These are
distinguished from programmatic requirements, which concern matters that can be treated
only on a program-by-program or grant-by-grant basis, such as kinds of activities that can
be supported by grants under a particular program. (A-102)
Advance - a payment made by Treasury check or other appropriate payment mechanism
to a recipient upon its request either before outlays are made by the recipient or through
the use of predetermined payment schedules. (A-l 10)
Allocable costs - costs that are allocable to a particular cost objective to the extent
benefits received by such objective. (A-87, A-102, A-122)
Allowable costs - those project costs that are: eligible, reasonable, necessary, and
allocable to the project; permitted by the appropriate Federal Cost Principles, and
approved by EPA in the assistance agreement. (40 CFR Part 30)
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Amendment
1. Formal amendment: a written modification of an assistance agreement signed
by both the award official and the authorized representative of the recipient.
2. Informal amendment: proposed project change which does not substantially
alter the objective or scope of the project.
Applicant - any entity that files an application or unsolicited proposal for EPA financial
assistance under 40 CFR Chapter I- Environmental Protection Agency, Subchapter A -
General. (40 CFR Part 30)
Approval official - an EPA official delegated the authority to approve or reject
applications for assistance and the technical/programmatic terms and conditions of
proposed assistance projects.
Assistance agreement - the legal instrument EPA uses to transfer money, property,
services, or anything of value to a recipient to accomplish a public purpose. It is either a
grant or a cooperative agreement and will specify: budget and project periods; the Federal
share of eligible project costs; a description of the work to be accomplished, and any
terms and conditions/special conditions. (40 CFR Part 30)
Automated clearing house (ACH) - electronic wire transfer system to pay recipients
through the Federal Reserve System and their local bank (replaced former letter of credit
system).
Award - (see also "assistance agreement, "cooperative agreement", "grant", "grant
agreement"): financial assistance that provides support or stimulation to accomplish a
public purpose. Awards include grants and other agreements in the form of money or
property in lieu of money by the Federal Government to an eligible recipient. The term
does not include: technical assistance which provides services instead of money, other
assistance in the form of leans, loan guarantees, interest subsidies, or insurance; direct
payments of any kind to individuals, and contracts which are required to be entered into
and administered under procurement laws and regulations. (A-l 10)
Award official - the EPA official with the authority to execute assistance agreements and
to take other actions authorized by 40 CFR Chapter I, Subchapter A and by EPA orders.
(40 CFR Part 30) Awarding Agency - (1) with respect to a grant, the Federal Agency,
and (2) with respect to a subgrant, the party that awarded the subgrant. (A-102)
Budget period - (see also "funding period"): the length of time EPA specifies in an
assistance agreement during which die recipient may spend or obligate Federal funds. (40
CFR Part 30)
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Cash contributions
1. The recipient's cash outlay, including the outlay of money contributed to the
recipient or subrecipient by other public agencies and institutions, and private
organizations and individuals (i.e., third parties). When authorized by Federal
legislation, Federal funds received from other assistance agreements may be
considered as recipient or subrecipient cash contributions. (A-102).
2. Actual non-Federal dollars that a recipient expended for goods and services and
real or personal property used to satisfy cost sharing requirements. (See "in-kind
contributions".) (Assistance Administration Manual)
Closeout
1. The process by which a Federal awarding agency determines that all applicable
administrative actions and all required work of the award have been completed by
the recipient and Federal awarding agency. (A-l 10)
The final EPA actions to assure satisfactory completion of project work and
administrative requirements: the submission of acceptable required final reports;
financial settlement; the resolution of any outstanding issues under an assistance
agreement, and the notification of the recipient. (Assistance Administration
Manual)
Closeout memo - the project officer's memo which documents their review of the
recipient's financial status report against their performance; states that performance has
been completed, and identifies the disposition of any remaining Federal funds. (Region 9)
Cognizant Agency - the Federal agency which, on behalf of all Federal agencies, is
responsible for reviewing, negotiating, and approving cost allocation plans or indirect
cost proposals developed under A-87. (A-87)
Continuation- an extension of an assistance agreement for an additional funding/budget
period for a project the agency initially agreed to fund for a definite number of years.
(Assistance Administration Manual)
Continuation award (see also "renewal"): - an assistance agreement after the initial
award, for a project which has more than one budget period in its approved project
period, or annual awards, after the first award, to State, interstate, or local agencies for
continuing environmental programs. (40 CFR Part 30)
Continuing environmental program - a state/interstate/local environmental agency
pollution control program which will not be completed within a definable time period.
(See 40 CFR Part 35-Subpart A.)
Continuing resolution - legislation enacted by Congress to provide budget authority for
Federal Agencies and/or specific activities to continue in operation until the regular
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appropria* are enacted. Continuing resolutions are enacted when action on
appropria ,s not completed by the beginning of a fiscal year. ("Principles of Federal
Approprii ,.»Law")
Contract - (except as used in the definitions for grant and subgrant and except where
qualified by Federal) a procurement contract under a grant or subgrant, and procurement
subcontract under a contract. (A-102)
Contractor - any party to whom a recipient awards a subagreement. (40 CFR Part 30)
Cooperative agreement (see also "assistance agreement", "award"): an ass-stance
agreement in which substantial EPA involvement is anticipated during iht performance
of the project (does not include fellowships). (40 CFR Part 30)
Cost - cost as determined on a cash, accrual, or other basis acceptable to the Federal
awarding or cognizant Agency. It does not include transfers to a general or similar fund.
(A-87)
Cost allocation plan (CAP) any of the following:
A. "central service cost allocation plan" - die documentation identifying,
accumulating, and allocating or billing the allowable costs of services provided by
a governmental unit on a centralized basis to its departments/agencies as
described in attachment C of OMB Circular A-87.
B. "public assistance cost allocation plan" • the documentation identifying,
accumulating, and distributing the allowable costs of services provided by a
public assistance agency/department in support of all Federal financial assistance
programs administered or supervised by that agency/department as described in
attachment D of OMB Circular A-87.
C."indirect cost rate proposal" - the documentation prepared by a governmental
unit or subdivision t Teofto substantiate its request for the establishment of an
indirect cost rate as Ascribed in attachment E of OMB Circular A-87. (A-87)
Cost objective - a function, organizational subdivision, contract, grant, or other activity
for which cost data are needed and for which provision is made to accumulate those
costs. (A-87)
Cost sharing - (see also "matching funds"): the portion of allowable project costs that a
recipient contributes toward completing its project (i.e., non-Federal share, matching
share). (40 CFR Part 30)
Cost-type contract - a contract or subcontract under a grant in which the contractor or
subcontractor is paid on the basis of the costs it incurs, with or without a fee. (A-102)
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Date of completion - the date on which all work under an award is completed or the date
on the award document, or any supplement or amendment thereto, on which Federal
sponsorship ends. (A-l 10)
Decision official (see "approval official")
Deviation - written approval from the Director, Grants Administration Division for
exception(s) from financial assistance regulations not based on statutory or executive
order requirements.
Disallowed costs - those charges to an award that the Federal awarding agency
determines to be unallowable, in accordance with the applicable Federal Cost Principles
or other terms and conditions contained in the award. (A-l 10)
Equipment - tangible, nonexpendable, personal property including exempt property
charged directly to the award having a useful life of more than one year and an
acquisition cost of $5,000 or more per unit. However, consistent with recipient policy,
lower limits may be established. A recipient may use its own definition of equipment
provided that such definition would at least include all equipment defined above. (A-102
& A-l 10)
Environmentally related measurements - any data collection activity or investigation
involving the assessment of chemical, physical, or biological factors in the environment
which affect human health or the quality of life. (40 CFR Part 30)
Excess property - property under the control of any Federal awarding agency that, as
determined by the head thereof, is no longer required for its needs or the discharge of its
responsibilities. (A-l 10)
Exempt property - tangible personal property acquired in whole or in part with Federal
funds, where the Federal awarding agency has statutory authority to vest title in the
recipient without further obligation to the Federal government. An example of exempt
property authority is contained in the Federal Grant and Cooperative Agreement Act (31
U.S.C. 6306) for property acquired under an award to conduct basic or applied research
by a non-profit institution of higher education or non-profit organization whose principal
purpose is conducting scientific research. (A-l 10)
Expenditure report - (1) for non-construction grants, The SF-269 "Financial Status
Report": (or other equivalent Report); (2) for construction grants, the SF-271 "Outlay
Report and Request for Reimbursement" (or other equivalent report). (A-l02)
Federal awarding agency - the Federal agency that provides an award to the recipient.
(A-l 10)
Federal funds authorized - the total amount of Federal funds obligated by the Federal
government for use by the recipient. This amount may include any authorized carryover
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of unobligated funds from prior funding periods when permitted by agency regulations or
agency implementing instructions. (A-l 10)
Federal share of real property, equipment, or supplies - That percentage of the
property's acquisition costs and any improvement expenditures paid with Federal funds.
(A-l 10)
Federally recognized Indian tribal government - the governing body or a
governmental agency of any Indian tribe, band, nations, or other organized group or
community (including any native village as defined in section 3 of the Alaska Native
Claims Settlement Act, 85 stat 688) certified by the Secretary of the Interior as eligible
for the special programs and services provided by him through the Bureau of Indian
Affairs. (A-87& A-102)
Financial status report (FSR) - a standard, government wide report recipients must
submit to the Federal funding agency that identifies the status of funds for a specific grant
or cooperative agreement. (40 CFR Part 31)
Funding period (see also "budget period"): the period of time when Federal funding is
available for obligation by the recipient. (A-l 10)
Government - a state or local government or a Federally recognized Indian tribal
government. (A-102)
Grant (see also "assistance agreement, "award", "cooperative agreement, "grant
agreement"): an award of financial assistance, including cooperative agreements, in the
form of money, or property in lieu of money, by the Federal government to an eligible
grantee. The term does not include technical assistance which provides services instead
of money, or other assistance in the form of revenue sharing, loans, loan guarantees,
interest subsidies, insurance, or direct appropriations. Also, the term does not include
assistance, such as a fellowship or other lump sum award, which the grantee is not
required to account for (A-l02)
Grant agreement (see also "assistance agreement'): an assistance agreement that does
not substantially involve EPA in the project and where the recipient has the authority and
capability to complete all elements of the program (does not include fellowships). (40
CFR Part 30)
Grant specialist - the EPA official designated in the assistance agreement as EPA's
administrative contact with the recipient. The grant specialist provides administrative
guidance to recipients and project officers; reviews and approves the administrative
portion of the application; prepares the assistance agreement; evaluates
effectiveness/compliance with administrative conditions, and closes out assistance
agreements.
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Grantee (see also "recipient"): the government to which a grant is awarded and which is
accountable for the use of the funds provided. The grantee is the entire legal entity even if
only a particular component of the entity is designated in the grant award document.
(OMB Circular A-l 02)
Indirect cost - costs (a) incurred for a common or joint purpose benefiting more than one
cost objective and (b) not readily assignable to the cost objectives specifically benefited
without effort disproportionate to the results achieved. (A-122 )
Indirect cost rate - a device for determining in a reasonable manner the proportion of
indirect costs each program should bear. It is the ratio (expressed as a percentage) of the
indirect costs to a direct cost base. (A-122
Indirect cost rate agreement - an agreement between the recipient and the cognizant
Federal agency which identifies the basis for the indirect cost rate, usually submitted
annually. (Region 9)
Indirect cost rate proposal - the documentation prepared by a governmental unit or
subdivision thereof to substantiate its request for die establishment of an indirect cost rate
as described in attachment E of OMB Circular A-87. (OMB Circular A-87)
In-kind contribution -1. The value of a non cash contribution to meet a recipient's cost
sharing requirements. An in-kind contribution may consist of charges for real property
and equipment or the value of goods and services directly benefiting the EPA funded
project. (40 CFR Part 30) NOTE: the assistance amount may also include an EPA in-kind
contribution. (See "cost sharing" and "cash contributions.")
Integrated financial management system (IFMS) - EPA's official automated
accounting system.
Interagency/intergovernmental agreement / international agreement (IAG)
(1) a written agreement between Federal agencies under which goods and services
are provided in exchange for funds, or where services are provided without
payment.
(2) a written agreement between a Federal agency and a State or local government
under which the State or local government reimburses the Federal agency for the
costs of providing a specific technical service, e.g., statistical studies and
compilations, technical tests and evaluations, training, surveys, reports,
documents, and data.
(3) a written agreement between a Federal agency and a foreign government
under which work will be conducted for, or services provided to, a foreign
government or international organization.
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Intangible property and debt instruments - means but Is not limited to trademarks,
copyright, patents and patent applications and such property as loans, notes and other
debt instruments, lease agreements, stock and other instruments of property ownership,
whether considered tangible or intangible. (OMB Circular A-l 10)
Local government - a county, municipality, city, town, township, local public authority
(including any public and Indian housing agency under the United States Housing Act of
1937) school district, special district, intrastate district, council of governments (whether
or not i orporated as a nonprofit corporation under state law), any other regional or
interstau government entity, or any agency or instrumentality of a local government.
(OMB Circulars A-87 & A-102)
Maintenance of effort - a requirement contained in certain legislation or regulations that
a recipient must maintain/contribute a specified level of financial effort in a specified
area in order to receive Federal assistance funds, which ensures that those Federal funds
are used to supplement, but not supplant, expenditures of the recipient's funds.
Matching funds (see also "cost sharing"): the portion of allowable project costs a
recipient contributes to a Federally funded project (sometimes determined by Statute).
The match may include in-kind as well as cash contributions.
Negotiation - the process of give and take by assistance Project officers and applicants to
agree on work plans And funds available to carry out the work plan activities.
Nonexpendable personal property - personal property with a useful life of at least two
years and an acquisition cost of $5000 or more (40 CFR Part 30)
Obligations - the amounts of orders placed, contracts and grants/subgrants awarded,
goods and services received and similar transactions during a given period that will
require payment by the grantee/recipient during the same or a future period. (OMB
Circulars A-102& A-l 10)
Official file 1. The administrative file for each assistance agreement (or each application
or unsolicited proposal) that is established and maintained by the appropriate grants
management office. (The official technical file and the official financial management file
both complement the official administrative file.)
OMB - the U.S. Office of Management and Budget.
Outlays or expenditures - charges made to the project or program. They may be
reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the
sum of actual cash disbursements for direct charges for goods and services, the amount of
indirect expense incurred [charged] the value of [third-party] in-kind contributions
applied, and the amount of cash advances and payments made to contractors and
subgrantees [Subrecipients]. For reports prepared on an accrued expenditure [accrual]
basis, outlays are the sum of actual cash disbursements [for goods and services], the
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amount of indirect expense incurred, the value of [third-party] in-kind contributions
applied, and the new [net] increase (or decrease) in the amounts owed by the grantee for
goods and other property received, for services performed by employees, contractors,
subgrantees/subrecipients, subcontractors, and other payees, and other amounts becoming
owed under programs for which no current services or performance are required, such as
annuities, insurance claims, and other benefit payments. (A combination of OMB
Circulars A-102 & A-110; 40 CFR Part 35)
Output - an activity or product which the applicant agrees to complete during the budget
period.
Percentage of completion method - a system under which payments are made for
construction work according to the percentage of completion of the work, rather than to
the grantee's/recipient's cost incurred. (OMB Circular A-102)
Personal property
1. Property of any kind except real property. It may be tangible, having physical
existence, or intangible, having no physical existence, such as copyrights, patents,
or securities. (OMB Circular A-l 10)
2. Property other than real property. It may be tangible (having physical
existence), such as equipment and supplies, or intangible (having no physical
existence), such as patents, inventions, and copyrights. (40 CFR Part 30)
Price analysis - the process of evaluating a prospective price without regard to the
contractor's separate cost elements and proposed profit. Price analysis determines the
reasonableness of the proposed subagreement price based on adequate price competition,
previous experience with similar work, established catalog or market price, law, or
regulation.
Principal investigator (See "Project manager")
Prior approval - documentation/written approval by an authorized official evidencing
consent prior to incurring specific cost. (Combination of OMB Circulars A102 & A-l 10)
Profit - the net proceeds obtained by deducting all allowable costs (direct and indirect)
from the price. (Because this definition of profit is based on applicable Federal Cost
Principles, it may vary from many firms' definition of profit, and may correspond to those
firms' definition of "fee".) (40 CFR Part 33)
Program income
1. Gross income earned by the recipient that is directly generated by a supported
activity or earned as a result of the award. Program income includes, but is not
limited to, income from fees for services performed, the use or rental of real or
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personal property acquired under Federally-funded projects, the sale of
commodities or items fabricated under an award, license fees and royalties on
patents and copyrights, and interest on loans made with award funds. Interest
earned on advances of Federal funds is not program income. Except as otherwise
provided in Federal awarding agency regulations or the terms and conditions of
the award, program income does not include the receipt of principal on loans,
rebates, credits, discounts, etc., or interest earned on any of them. (OMB Circular
A-110)
2. Gross income the recipient earns during its project period from charges for the
project. This may include income from service fees, sale of commodities, trade-in
allowances, or usage or rental fees. Fees from royalties are program income only
if the assistance agreement so states. Revenue generated under the governing
powers of a State or local government which could have been generated without
an award is not considered program income. Such revenues include fines or
penalties levied under judicial or penal power and used as a means to enforce
laws. (Revenue from wastewater treatment construction grant projects under Title
II of the Clean Water Act, as amended, is not program income. It must be used for
operation and maintenance costs of the recipient's wastewater facilities.)
Project costs - all allowable costs, as set forth in the Applicable Federal Cost Principles,
incurred by a recipient and the value of the contributions made by third parties in
accomplishing the objectives of the award during the project period. (OMB Circular A-
110)
Project manager - (see also principal investigator.): The researcher, business officer or
other person authorized and designated by the recipient to serve as its principal contact
with EPA.
Project narrative (see "workplan/workprogram")
Project officer - the EPA official designated in the assistance agreement as EPA's
program contact with the recipient. Project officers are responsible for programmatic
monitoring of the project. (40 CFR Part 30)
Project period
1. The period established in the award document during which Federal
sponsorship begins and ends. (OMB Circular A-110)
2. The length of time EPA specifies in the assistance agreement for completion of
all project work. It may be composed of more than one budget period. (40 CFR
Part 30)
Property - unless otherwise stated, real property, equipment, intangible property and
debt instruments. (40 CFR Part 35; A-110)
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Quality assurance narrative statement - a description included in an application which
explains how precision, accuracy, representativeness, completeness, and comparability
will be assessed, and which is sufficiently detailed to allow an unambiguous
determination of the quality assurance practices to be followed throughout a research
project. (40 CFR Part 30)
Quality assurance program plan - a formal document which describes an orderly
assembly of management policies, objectives, principles, organizational responsibilities,
and procedures by which an agency or laboratory specifies how it intends to: (a) produce
data of documented quality, and (b) provide for the preparation of quality assurance
project plans and standard operating procedures. (40 CFR Part 30)
Quality assurance project plan - an organization's written procedures which delineate
how it produces quality data for a specific project or measurement method. (40 CFR Part
30)
Real property - land, including land improvements, structures and appurtenances
thereto, excluding movable machinery and equipment. (OMB Circulars A-102 & A-110;
40 CFR Part 30)
Recipient
1. An organization receiving financial assistance directly from Federal awarding
agencies to carry out a project or program. The term includes public and private
institutions of higher education, public and private hospitals, and other quasi-
public and private non-profit organizations such as, but not limited to, community
action agencies, research institutes, educational associations and health centers.
The term may include commercial organizations, foreign or international
organizations (such as agencies of the United Nations) which are recipients,
subrecipients, or contractors or subcontractors of recipients or subrecipients at the
discretion of the Federal awarding agency. The term does not include
government-owned contractor-operated facilities or research centers providing
continued support for mission-oriented, large-scale programs that are
government-owned or controlled, or are designated as Federally-funded research
and development centers. (OMB Circular A-l 10)
2. Any entity which has been awarded and accepted an EPA assistance agreement.
(40 CFR Part 30)
Research and development - all research activities both basic and applied, and all
development activities that are supported at universities, colleges, and other non-profit
institutions. "Research" is defined as a systematic study directed toward filler scientific
knowledge or understanding of the subject studied. "Development" is the systematic use
of knowledge and understanding gained from research directed toward the production of
useful materials, devices, systems, or methods, including design and development of
prototypes and processes. The term research also includes activities involving the training
of individuals in research techniques where such activities use the same facilities as other
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research and development activities and where such activities are not included in the
instruction function. (OMB Circular A-l 10)
Services - a contractor's labor, time, or efforts which do not involve the delivery of a
specific end item, other than documents (e.g., reports, design drawings, specifications).
This term does not include employment agreements or collective bargaining agreements.
Share - when referring to the awarding agency's portion of real property, equipment or
supplies, share means the same percentage as the awarding agency's portion of the
acquiring party's total costs under the grant to which the acquisition costs under the grant
to which the acquisition cost of the property was charged. Only costs are to be counted —
not the value of third-party in-kind contributions. (OMB Circular A-102; 40 CFR Part 31)
State - any of the several States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, any territory or possession of the United States, or any
agency or instrumer lity of a State exclusive of local governments. (OMB Circular A-
87)
Subagreement - a written agreement between an EPA recipient and another party (other
than another public agency) and any lower tier agreement for services, supplies, or
construction necessary to complete the project. Subagreements include contracts and
subcontracts for personal and professional services, agreements with consultants, and
purchase orders. (40 CFR Part 30)
Subaward - an award of financial assistance in the form of money, or property in lieu of
money, made under an award by a recipient to an eligible subrecipient or be a
subrecipient to a lower tier subrecipient. The term includes financial assistance when
provided by any lega, agreement, even if the agreement is called a contract, but does not
include procurement of goods and services nor does it include any form of assistance
which is excluded from the definition of "award" in OMB Circular A-l 10. (OMB
Circular A-110)
Subgrant - an award of financial assistance in the form of money, or property in lieu of
money, made under a grant by a grantee to an eligible subgrantee. The term includes
financial assistance when provided by contractual legal agreement, but does not include
procurement purchases, nor does it include any form of assistance which is excluded
from the definition of grant in 40 CFR Part 31. (OMB Circular A-102; 40 CFR Part 31)
Subgrantee - the government or other legal entity to'which a subgrant is awarded and
which is accountable to the grantee for the use of the funds provided. (OMB Circular A-
102; 40 CFR Part 31)
Subrecipient - the legal entity to which a subaward is made and which is accountable to
the recipient for the use of the funds provided. The term may include foreign or
international organizations (such as agencies of the United Nations) at the discretion of
the Federal awarding agency. (OMB Circular-110)
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Supplies
1. All tangible personal property other than equipment as defined in 40 CFR Part
31. (OMB Circular A-102)
2. All tangible personal property excluding equipment, intangible property, and
debt instruments, and inventions of a contractor conceived or first actually
reduced to practice in the performance of work under a funding agreement
("subject inventions"), as defined in 37 CFR 401, "Rights to Inventions Made by
Nonprofit Organizations and Small Business Firms under Government Grants,
Contracts, and Cooperative Agreements." (OMB Circular A-l 10)
Suspension
1. An action by a Federal awarding agency that temporarily withdraws Federal
sponsorship under an award, pending corrective action by the grantee/recipient or
pending a decision to terminate the award by the Federal awarding agency.
Suspension of an award is a separate act from suspension under Federal agency
regulations implementing E.O.s 12549 and 12689, "Debarment and Suspension."
(OMB Circular A-l 10) w
2. Depending on the context, either
(1) Temporary withdrawal of the authority to obligate grant funds pending
corrective action by the grantee or subgrantee or a decision to terminate the grant,
or
(2) An action taken by a suspending official in accordance with agency
regulations implementing E.0.12S49 to immediately exclude a person from
participating in grant transactions for a period, pending completion of an
investigation and such legal or debarment proceedings as may ensue. (OMB
Circular A-102; 40 CFR Part 31)
Termination
1. Permanent withdrawal of the authority to obligate previously awarded grant
funds before that authority would otherwise expire. It also means the voluntary
relinquishment of that authority by the grantee or subgrantee. Termination does
not include:
(1) Withdrawal of funds awarded on the basis of the grantee's underestimate of
the unobligated balance in a prior period;
(2) Withdrawal of the unobligated balance as of the expiration of a grant;
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(3) Refusal to extend a grant or award additional funds, to make a competing or
noncompeting continuation, renewal, extension, or supplemental award; or
(4) Voiding of a grant upon determination that the award was obtained
fraudulently, or was otherwise illegal or invalid from inception. (OMB Circular
A-102; 40 CFR Part 31)
2. The cancellation of Federal sponsorship, in whole or in part, under an
agreement at any time prior to the date of completion. (OMB Circu'ar A-l 10)
3. The cancellation of an assistance agreement, in whole or in part, before the
scheduled project completion date. The recipient is entitled to be paid the EPA
share of allowable costs incurred up to the date of termination and of allowable
costs related to non-cancelable commitments made prior to termination.
Terms of a grant or subgrant - all requirements of the grant or subgrant, whether in
statute, regulations, or the award document. (OMB Circular A-102; 40 CFR Part 31)
Third party in-kind contributions
1. The value of non-cash contributions provided by non-Federal third parties.
Third party in-kind contributions may be in the form of real property, equipment,
supplies and other expendable property, and the value of goods and services
directly benefiting and specifically identifiable to the project or program. (OMB
Circular A-110)
2. Property or services which benefit a Federally assisted project or program and
which are contributed by non-Federal third parties without charge to the grantee,
or a cost-type contractor under the grant agreement. (OMB Circular A-102; 40
CFR Part 31)
Unexpended Federal funds (See also "Unobligated balance"): Federal funds obligated
but not yet disbursed. Represents the difference between the amount of EPA Funds
awarded to the recipient of an assistance agreement and the amount EPA has paid that
recipient.
Unliquidated obligations
1. z or reports prepared on a cash basis— the amount of obligations incurred by the
grantee that have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the grantee for which
an outlay has not been recorded. (OMB Circular A-102; 40 CFR Part 31)
2. The portion of the funds authorized by the Federal awarding agency that has
not been obligated by the recipient and is determined by deducting the cumulative
obligations from the cumulative funds authorized. (OMB Circular A-l 10)
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3. An obligation for which payment has not been made; contingent liabilities for
contracts and orders outstanding.
Unobligated balance - the portion of the funds authorized by the Federal awarding
agency that has not been obligated by the grantee/recipient and is determined by
deducting the cumulative obligations from the cumulative funds authorized. (OMB
Circulars A-102 & Al 10; 40 CFR Part 31)
Unobligated Federal funds - Federal funds that the recipient has not spent; the
difference between the amount of EPA funds awarded to the recipient of an assistance
agreement and the EPA share of the project obligations that the recipient has incurred
under that agreement.
Unrecovered indirect cost - the difference between the amount awarded and the amount
which could have been awarded under the recipient's approved negotiated indirect cost
rate. (OMB Circular A-l 10)
Unsolicited proposal - an informal written offer to perform EPA funded work for which
EPA did not publish a solicitation. (40 CFR Part 30)
Violating facility - any facility that is owned, leased, or supervised by an applicant,
recipient, contractor, or subcontractor that EPA lists under 40 CFR Part 15 as not in
compliance with Federal, State, or local requirements under the Clean Air Act or Clean
Water Act. A facility includes any building, plant, installation, structure, mine, vessel, or
other floating craft. (40 CFR Part 30)
Voluntary exclusion - a term of settlement in lieu of a rinding for debarment under
which a person or entity agrees to voluntarily abstain from participation in EPA assisted
projects.
Working capital advance - a procedure whereby funds are advanced to the recipient to
cover its estimated disbursement needs for a given initial period. (OMB Circular A-l 10)
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