fl ------- GRANTS MANAGEMENT BASIC PROGRAM INTRODUCTION ------- DAY ONE DAY TWO DAY TR1 EE 8:30-9:30 Course Introduction 8:30-9:00 Activity 8:30-9:30 XI. Closeout of Assistance Setting Expectations Agreements 9:00 9:45 VI. The Assistance Agreement: 9:30-10:30 I. Overview of EPA Award Phase 9:30-9:45 Break Assistance Administration 9:45-10:30 Exercise 2 Award Agreement 9:45-10:30 XII. Audits 10:30-10:45 Break Preparation 10:30-11:00 Activity 10:45-11:15 II. EPA Budget Formulation 10:30-10:45 Break and Execution 11:00-12:00 Xffl. Interagency Agreements 10:45-12:00 VII. Administration of 11:15-11:30 Activity Assistance Agreements 11:30-12:00 III. Requirements Governing EPA Assistance Agreements 12:00-1:30 LUNCH 12:00-1:30 LUNCH 12:00-1:30 LUNCH 1:30-2:00 2:00-2:15 IV. EPA Information Systems Activity 1:30-2: 15 Vifi. Recipient Financial Administration Require- ments 1:30-3:00 3:00-3:15 XIV. The Superfund Program . Break 2:15-2:30 Break 2:15-3:00 Exercise 3 FSR Review 3:15-3:45 Final Activity 2:30-3:45 V. The Assistance Agreement: Application Phase 3:00-3:15 Break . 3:45-4:30 Wrap-up, Evaluations 3:45-5:00 Exercise 1 Application Review 3:15-4:15 IX. Procurement . 4:15-5:15 X. Property Management ------- ------- THE ROLE OF THE GMO Complement the Technical Knowledge of Program Officials: • Provide Expertise In the Business and other Non-programmatic Areas of Grants Administration • Coordinate the Review, Negotiation, Award, and Administration of Grants through Audit Resolution and Final Close-out. VIEWGRAPH # 1 TITLE: The Role of the GMO KEY POINTS: • On June 1, 1990, F. Henry Habicht II, Deputy Administrator of the EPA, sent out a memorandum clarifying the agency’s policy on the assignment of roles and responsibilities for grants administration activities in regional offices. • The memo acknowledged that many important decisions and determinations pertaining to assistance administration should be made by program officials, or with strong input from program officials. Nonetheless, the memo stated that the management of assistance agreements is a partnership between Program and Grants Management Offices (GMOs). To this end, the memo called for the consolidation of all grants administrative responsibilities into the regional GMOs under the Assistant Regional Administrators. This consolidation is meant to provide a “checks and balances” relationship that ensures the “achievement of both programmatic and administrative objectives necessary to program integrity.” • The memo stated that GMOs are responsible for full “cradle to grave” management of EPA financial assistance agreements (grants and cooperative agreements) and interagency agreements. In this way, Regional Administrators can ensure that legitimate program interests are balanced by recipient compliance with equally important grants administrative requirements. • On August 20, 1990, Charles L. Grizzle, Assistant Administrator, Office of Administration and Resources Management, distributed implementing guidance to describe the fundamental roles and responsibilities of regional GMOs. This basic program of instruction describes these roles and responsibilities as they apply to the management functions of GMOs. 1.1 ------- LEARNING OBJECTIVES • Understand the Framework of the Administration of EPA Assistance Agreements: - Statutory - Regulatory - Policy - Procedural • identify the General Responsibilities of Regional Grants Management Officials in the Administration of Assistance Agreements VIEWGRAPH # 2 TITLE: Learning Objectives KEY POINTS: • This course is intended to introduce EPA regional grants management personnel to the statutory, regulatory, policy, and procedural framework of the administration of assistance agreements. • The program will identify the general responsibilities of regional grants management officials (i.e., grants assistants, grants specialists), as distinct from thàse of program officials (i.e., project officers) and finance officials (i.e., financial management officers (FMO)) in the administration of assistance agreements. • The first two modules of this course provide background information. The next two modules describe the Federal requirements governing EPA assistance agreements and EPA information systems that contain assistance data. The final eight modules describe the roles of the GMO during the five phases of assistance administration (see next page). 1.2 ------- ------- AN OVERVIEW OF EPA ASSISTANCE ADMINISTRATION BY ThE END OF This MODULE YOU WILL BE ABLE TO: • identify the EPA Organizational Components Most Relevant to Your Work as a GMO • Identify the Statutes Supportin EPA’s AssIstance Programs • ExplaIn the Difference Between Assistance Agreements and ContractS, and Between Grants and Cooperative Agreements • Exp’ain the Purpose of the Catalog of Federal Domestic Assistance (CFDA) and EPA’s Assistance Administration Manual VIEWGRAPH *1 T I T L E: An Overview of EPA Assistance Administration KEY POINTS: • This module identifies and explains the main functions of the EPA Headquarters offices most relevant to grants specialists, particularly the four branches of the Grants Administration Division (GAD) within the Office of Administration and Resources Management (OARM). • This module also identifies and reviews the major provisions of the statutes that support EPA’s assistance programs, including the major environmental statutes enacted during the past 25 yea!s and the Federal Grant and Cooperative Agreement Act of 1977. • This module also discusses the difference between assistance agreements and contracts, and the difference between grants and cooperative agreements. • Finally, this module reviews the general content of the Assistance Administration Manual . the collection of guidance, procedural and implementing documents that serves as the key resource for grants specialists. And it explains the Catalog of Federal Domestic Assistance (CFDA), the information it contains, and discusses both cataloged and non-cataloged Federal programs. 1.1 ------- GRANTS ADMINISTRATION DIVISION • Grants Administration Division (GAD) I ___ I I Compiiance Grants Grants Grants Branch information Operations Policy and and Branch Procedures Analysis Branch Branch VIEWGRAPH *2 T I T L E: Grants Administration Division KEY POINTS: This module begins to discuss the responsibilities of regional grants management offices (GMO) as distinct from those of program offices and servicing finance offices (SF0). We begin by discussing the role of the Grants Administration Division (GAD), the National Program Manager for assistance administration, including support of regional grants management offices. • GAD is within EPA’s Office of Administration as part of the Office of Administration and Resources Management (OARM). • GAD is responsible for the development and dissemination of regulations, policy, guidelines, and procedures which affect the administrative aspects of all assistance agreements. • GAD is comprised of four branches. The Grants Policy and Procedures Branch (GPPB) provides monitoring, analysis, evaluation and reporting on assistance program activities, conducts on-going monitoring and evaluation of all assistance program procedures, and develops techniques and methods for processing and administering assistance programs. GPPB serves as the National Program Manager for the Agency’s Grants Information and Control System (GICS). GPPB provides program information to key agency officials, other agencies, Congress, and the general public. GPPB participates in the development of legislation, regulations and directives involving assistance programs, and reviews those that are proposed. GPPB maintains liaison with Federal agencies and through its oversight activities helps to ensure that the grant system provides prompt, effective and efficient service. 1.2 ------- VIEWGRAPH *2(cont.) T I T L E: Grants Administration Division KEY POINTS: GPPB serves as the focal point for Agency participation in Presidential or interagency efforts of the Office of Management and Budget to improve the Federal assistance system. This includes activities under the Office of Management and Budget Circulars, and activities of the Federal Regional Councils and the Federal Executive Boards. This branch also provides training and technical assistance to components of the Agency’s field organization responsible for carrying out related activities. • Grahts Operations Branch (GOB) awards and manages all research and development, demonstration, training, and fellowship projects awarded out of EPA Headquarters. • Grants Information and Analysis Branch (GIAB) awards and manages the Asbestos-in-Schools loans and grants, EPA headquarters administered Interagency and Intergovernmental Agreements (lAGs), Superfund lAG audit resolution, GAD internal control activities, publication of the Monthly Summary of Activities of the Grant Programs, EPA’s Federal Technology Transfer Act agreements, the Congressional Notification system, and provides guidance and oversight for regional lAGs. • The Compliance Branch is responsible for the Agency’s suspension and debarment program for both assistance and procurement activities. The Branch provides training; reviews and investigates or forwards prospective cases to the Office of the Inspector General or Office of Enforcement for investigation; presents cases in Agency administrative hearings; negotiates settlements on behalf of the Agency; and audits compliance with settlements and agreements. 1.3 ------- PROGRAMMATIC AUTHORITIES 1983 TSCA Clean Air i Clean Water Act Solid Waste Disposal Act National Environmental Policy Act Resources Conservation and Recovery Act Federal Insecticide, Fungicide, and Rodenticide Act Safe Drinking Water Act Comprehensive Environmental Response, Compensation, and Liability Act Toxic Substance Control Act VIEWGRAPH * 3 T I T L E: Programmatic Authorities KEY POINTS: It is important for GMO staff to know the statutory basis of the various programs that EPA oversees. The statutes listed on the viewgraph establish the programmatic authorities of EPA and many State environmental programs. • The CM has two major grant-related provisions: - §103 Grants for Research, Investigation, Training and Other Activities - §105 Grants for Support of Air Pollution Planning and Control Programs • The CWA’s grant-related provisions include: - §104 Research, Investigation, Training and other Activities - §105 Research, Development, Demonstration - §106 Surface Water and Ground Water Pollution - §107 Mine Water Pollution Demonstration - §108 Great Lakes Pollution Control - §109(b) Training - §113 Alaska Village Demonstration - §117 Chesapeake Bay - §201 Construction Grant for Wastewater Treatment Works - §205(g) Construction Management Assistance Grants - §205(j) Water Quality Management Planning - §205(j)(5) Nonpoint Source Reservation 1.4 1 5 1956 1965 1969 1970 1972 1974 1980 SWDA NEPA RCRA FIFRA SDWA CERCLA ------- VIEWGRAPH * 3 (cont.) T I T L E: Programmatic Authorities KEY POINTS: - §205(m) State Revolving Fund - §314 Clean Lakes - §319(h) Nonpoint Source - §320 National Estuary Program - §604(b) Water Quality Management Planning. Key grant-related provisions of RCRA include: - Subtitle C §3011 Authorization of Assistance to States - Subtitle D §4008 Federal Assistance - Subtitle G §7007 Grants or Contracts for Training Projects Subtitle H §8001 Research, Demonstrations, and Training, and §8006 Grants for Resource Recovery Systems and Improved Solid Waste Disposal Facilities. • The key grant-related provisions of FIFRA are §136(r) Research and §136(u) State Cooperation, Aid, and Training. • SDWA’s grant-related provisions include: - §1442(b) Wellhead Protection - §1443(a) Underground Injection Control - §1443(b) Public Water System Supervision. • The key grant-related provision of CERCLA , as amended by SARA, is §104(d), uses of Superfund. • Key grant-related provisions of TSCA include: - Title I §10 Research, and §28 State programs - Title Ill §306 Grant Assistance to States for Radon Programs, and §308 Regional Radon Training Centers. 1.5 ------- VIEWGRAPH * 4 NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) • Established the Council on Environmental Quality • Declared a National Policy for the Environment T I T L E: National Environmental Policy Act (NEPA) KEY POINTS: The National Environmental Policy Act of 1969 (NEPA): - Calls for a national policy which would “encourage productive and enjoyable harmony between man and his environment.” - Promotes efforts to prevent or eliminate damage to the environment and biosphere, and stimulate the health and welfare of man. - Enriches the understanding of the ecological systems and natural resources important to the U.S. - Establishes the Council on Environmental Quality (CEQ). The objective of the national policy is to seek a rational combination of population size, decent living standard, and technological advancement. 1.6 ------- NEPA’S ACTION-FORCING PROVISIONS ALL FEDERAL AGENCIES MUST: • Apply the Natural and Social Sciences, and the “Environmental Design Arts” • Prepare an Environmental Impact Statement • Invite Comment from Other Federal Agencies • Study Alternatives VIEWGRAPH * S T I T L E: NEPA’s Action-Forcing Provisions KEY POINTS: • NEPA provides for an interdisciplinary approach in Federal planning and decision making to develop methods to promote the consideration of “unqualified environmental amenities and values” to balance out the economic and technical factors that had previously dominated major Federal decisions. • NEPA is an environmental “full disclosure” law: Federal agencies must provide current and accurate information to all parties (including the public) in order to ensure that a proper decision is made to begin or continue a project that affects the environment. • The Environmental Impact Statement (ElS) is one method of ensunng full disclosure. 40 CFR Part 6 contains requirements for EIS’s. • Proposed legislation or major Federal actions must have an ElS that addresses the following “threshold considerations”: - Environmental impact - Unavoidable adverse effects - Alternatives - Short-term environmental uses versus long-term enhancement of productivity - Irreversible Commitments of resources. • Comments from other Federal agencies having jurisdiction or expertise must be sought. A final draft of the EIS, including comments, must accompany the proposal through the review process and must be made available to the President, CEQ, and the public. 1.7 ------- THE COUNCIL ON ENVIRONMENTAL QUALITY NEPA ESTABUSHED THE COUNCIL TO: • Assist and Advise the President on POlicies and Programs Affecting Environmental Qualfty • Assist in Coordinating Among the Federal Departments and Agencies Those Programs and Activities that Affect, Protect, and Improve Environmental Quality VIEWGRAPH * 7 T I T L E: The Council on Environmental Quality KEY POINTS: The Council on Environmental Quality, located in the District of Columbia, is composed of three members, appointed by the President with the advice and consent of the Senate. • The Council issues guidelines for the preparation of Environmental Impact Statements to Federal agencies and supplements them with memoranda to agency heads and general counsels. • Although it does not review all EIS’s, it does work informally with the personnel in agencies developing certain projects. • EPA’s Office of Federal Activities is the Agency’s “link” to the Council on Environmental Quality. 1.8 ------- THE BIRTH OF A PROGRAM • The Federal Grant and Cooperative Agreement Act of 1977 • Introduction of a New Program • Delegations of Authority • The Catalog of Federal Domestic Assistance • The Assistance Administration Manual VIEWGRAPH * 8 TITLE: TheBirthofaprogram KEY POINTS: • The Federal Grant and Cooperative Agreement Act of 1977 is the statutory basis of the Federal assistance offered by most agencies of the U.S. Government. • During the introduction of a new program of EPA assistance, several steps must be taken including formal Agency clearance for a delegation of grant-making authority. • The Catalog of Federal Domestic Assistance serves as the Federal grants directory. • The Assistance Administration Manual is the primary source of guidance for EPA grants specialists. 1.9 ------- THE FEDERAL GRANT AND COOPERATiVE AGREEMENT ACT OF 1977 • The Federal Grant and Cooperative Agreement Act of 1977 - Differentiated Acquisition from Assistance - Differentiated Grants from Cooperative Agreements - Distinguished Grants and Cooperative Agreements from Procurement instruments • EPA Order 1000.19 Implements the Federal Grant and Cooperative Agreement Act of 1977 VIEWGRAPH * 9 T I T L E: The Federal Grant and Cooperative Agreement Act of 1977 KEY POINTS: • Congress determined that there existed a need to distinguish Federal assistance relationships from Federal procurement relationships. Congress also determined that there was some uncertainty as to the meaning of such terms as “contract,” “grant,” and “cooperative agreement.” This uncertainty had resulted in operational inconsistencies, confusion, inefficiency, and waste for recipients and Federal agencies. • The purpose of the Act was to characterize the relationship between the Federal government and contractors, State and local governments, and other recipients of Federal funds. The Act also established government-wide criteria for selection of appropriate legal instruments to achieve uniformity in the use by Federal agencies of such instruments, a clear definition of the relationships they reflect, and a better understanding of the responsibilities of the parties. • Through passage of the Act, Congress promoted discipline in the selection and use of Federal contracts, grants, and cooperative agreements and maximized competition in their award. 1.10 ------- FEDERAL ACQUISITION AND ASSISTANCE ACOUIS 0N vs. ASSISTANCE VIEWGRAPH * 10 T I T L E: Federal Acquisition and Assistance KEY POINTS: • The Federal Grant and Cooperative Agreement Act requires Federal agencies to use a contract to acquire property or services for the direct benefit of the Federal government, and a grant or cooperative agreement to transfer money, property, services, or anything else of value to support or stimulate an activity to accomplish a public purpose of assistance authorized by Federal statute. • The determining factor in choosing acquisition versus assistance is defining the direct beneficiary. If the direct beneficiary is the Federal agency, then a contract is the appropriate legal instrument to use. If the direct beneficiary is a State or local government or other recipient, and the purpose of support or stimulation is authorized by Federal statute, then a grant or cooperative agreement is the proper legal instrument to use. • A determination that a program is principally one of acquisition or assistance does not preclude the use of any of the types of instruments for a particular transaction. The program office will make the initial recommendation as to whether the relationship is one of acquisition or assistance. • The GMO/Contract Office will determine whether the aid will be provided through a contract or an assistance agreement. 1.11 ------- CLASSIFICATION OF FEDERAL ASSISTANCE SUBSTANTIAL FEDERAL INVOLVEMENT vs. NO SUBSTANTIAL FEDERAL INVOLVEMENT VIEWGRAPH * 11 T I T L E: Classification of Federal Assistance KEY POINTS: The basis for distinguishing between a grant or cooperative agreement is whether there is substantial Federal involvement between EPA and the recipient during performance of the activity. Generally, there is substantial Federal involvement where there is: - Intense monitoring by EPA - Joint operational involvement, participation, or collaboration between EPA and the recipient - EPA review or approval of project phases within the scope of the agreement • If it is anticipated that the assistance agreement is to require substantial EPA involvement, then the cooperative agreement is the appropriate funding mechanism. If EPA’s involvement will not be substantial, then theappropriate mechanism is a grant. The GMO/Contract Office will determine whether the aid will be provided through a contract or an assistance agreement. • Since substantial Federal involvement often requires significant Federal resources, it should be formally documented in the terms and conditions of the cooperative agreement or the agreement application. 1.12 ------- • INTRODUCTION OF A NEW EPA PROGRAM CONGRESS Authorizes New Program CONGRESS Appropriates Funds EPA Implements Program EPA Awards Funds to Recipients VIE WGRAPH # 12 TITLE: Introduction of a New EPA Program KEY POINTS: • New assistance programs offered by EPA are born of Federal legislation that authorizes such assistance, defines its parameters, and provides funds. The legislation gives authority to EPA’s Administrator to award financial assistance. The Administrator, in turn, may delegate that authority. • Once Congress has authorized a new program, 0MB may request funding in the President’s annual budget submission. Not all programs authorized by Congress are actually funded each year. • Annual funding provided by Congress for a particular program is apportioned by 0MB to EPA. EPA’s Comptroller provides allowances to each of EPA’s 10 regions and Headquarters program offices. • Within each region, an Award Official must be delegated authority to make grants under each program (See Viewgraphs 23-25). The timing of such delegations does not always coincide with the actual availability of funds. However, once proper authority has been delegated, a region may begin awarding/obligating funds to eligible recipients. 1.13 ------- DELEGATIONS OF AUTHORITY • Delegation of Authority is Required to Award Assistance Agreements • There are Two Separate Delegations: • Award Authority - Approval Authority VIE WGRAPH # 13 TITLE: Delegations of Authority KEY POINTS: • Delegation of authority is a transfer of authority from the EPA Administrator to senior management officials in Headquarters and the Regions that allows these officials to exercise authority on behalf of the Administrator. • In EPA, the Administrator has delegated authority to the Regional Administrators for the approval and award of assistance agreements. Further delegations are usually made within the Regions. • Award authority provides the Regions with the authority to award funds under assistance agreements. • Approval authority is specific to each statutory assistance program. • The delegation will specify who receives approval authority, and who receives award authority. Practically speaking, the Approval Official and the Award Official may be the same person. 1.14 ------- REQUESTS FOR DELEGATIONS OF AUTHORITY • Should Be Evaluated By EPA’S Management and Organization Division for Consistency with Existing Authorities • Should be Submitted to GAD for Assistance with Drafting • Must Be Approved by the EPA Administrator VIE WGRAPH # 14 TITLE: Requests for Delegations of Authority KEY POINTS: When a new financial assistance program is introduced, the Headquarters Program Office must request a delegation of authority from the Administrator. Frequently, a grant award is delayed because the delegation of authority is not requested far enough in advance. Assistance in drafting delegations is available from the Grants Administration Division (GAD). Although the format may vary, the following information is required: a. Authority : describes the specific authority being delegated, including a citation to the current relevant statute, regulation, or Executive Order. b. To Whom Delegated : identifies, by title, the senior Agency official(s) to whom the Administrator will delegate the authority. c. Limitations (optional): delineates any conditions or restrictions placed on the exercise of the authority (such as operating procedures between organizations sharing the delegated authority). d. Re-delegation of Authority : indicates whether the authority- may be re-delegated to a lower level. If so, identify the lowest level. If not, say so e. Additional References (optional): usually contains citations or comments that support or clarify the delegated authority and is a helpful reference for offices implementing the delegated authority. • Once the Administrator approves a delegation, the EPA’s Management and Organization Division records the delegation in the Agency Delegations Manual. • Regional re-delegation should be documented by the Regional Office and maintained in the delegations manual. 1.15 ------- KEY EPA OFFICIALS INVOLVED IN THE AWARD PROCESS • Approval Official (Program Office) • Award Official (Regional Administrator or Delegate) VIEWGRAPH * I I T L E: Key EPA Officials Involved in the Award Process KEY POINTS: • The Approval Official and the Award Official play separate roles during the award process. The Approval Official is from the program office and is responsible for approving or rejecting an assistance application on the basis of technical/programmatic considerations. • The Award Official for regionally-administered programs is either the Regional Administrator, the Assistant Regional Administrator, or the Division Director, depending upon the region. The Award Official for Headquarters administered programs is either the Branch Chief of the Grants Operations Branch (GOB) or the Grants Information and Analysis Branch (GIAB), depending upon the program. The Award Official is responsible for ensuring that all technical, legal, and administrative evaluations have been made and that the proposed agreement is awardable. If a proposed agreement is awardable, the Award Official is responsible for signing the assistance agreement. • The Approval Official renders the review decision and the Award Official renders the award decision. • An assistance offer is not disclosed to the recipient or others outside of EPA until the Congressional representatives of the potential recipient are notified of the intended award. Even after the agreement has been signed, unless the Office of the Congressional Liaison (OCL) allows otherwise, the Award Official may not inform the recipient of the assistance offer for five business days following his/her signing the agreement. Procedures for notifying recipients and other EPA offices will be discussed in subsequent viewgraphs. (Additional information may be found in Chapters 15 and 16 of the Assistance Administration Manual. ) 15 1.16 ------- VIEWGRAPH 16 CATALOG OF FEDERAL DOMESTIC ASSISTANCE T I T L E: Catalog of Federal Domestic Assistance KEY POINTS: • The Catalog of Federal Domestic Assistance is published by the Office of Management and Budget to provide information to potential recipients regarding current Federal programs. • In the FY 1990 CFDA, EPA had 40 Federal assistance programs from seven EPA program offices listed. • As required by the Federal Program Information Act, Assistance Administrators periodically (usually twice a year) review and update their programs listed, or scheduled to be listed in the Catalog of Federal Domestic Assistance. • Assistance Administrators send the results of the review and classification to the GIAB, which provides the final program description to GSA for inclusion in the CFDA. Provides Detailed Information on EPAs Available Assistance Programs Lists Programs by EPA Program Office 1.17 ------- CFDA NUMBERING SYSTEM 66 XXX JIII EPA PROGRAM OFFICE ____ SERIES EPA PROGRAM OFFiCE .000 Office of Air and Radiation .400 Office of Water .500 Office of Research and Development .600 Office of Administration .700 Office of Pesticides and Toxic Substances .800 Office of Solid Waste and Emergency Response .900 Office of Policy, Planning and Evaluation VIEWGRAPH * 17 T I T L E: CFDA Numbering System KEY POINTS: • The number 66 represents the section of the CFDA devoted to EPA programs. • The last three digits represent the EPA program office responsible for administering the assistance program and identifies the specific program. • The EPA program offices are responsible for providing information on the programs they administer to GAD, which ensures that the information is published in the CFDA. 1.18 ------- CFDA INFORMATION CATEGORIES • Authorization • Objectives • Uses and Use Restrictions • Eligibility Requirements • Application and Award Process VIEWGRAPH *18 T I T L E: CFDA Information ‘Categories KEY POINTS: • The Federal Agency and program office are listed, and the Authorization lists all Legislative Acts and Public Laws that govern the program. The Objectives provide a brief paragraph explaining the intent of the program. • Under Types of Assistance, the manner in which the recipient can receive• assistance is identified. Examples of types of assistance include formula grants, training, project grants, and cooperative agreements. • The CFDA is a useful tool for GMOs to verify information on an application, e.g., statutory authority, eligibility of applicant, eligibility of activities. • Under Uses and Use Restrictions, the CFDA outlines the purposes for which the assistance may be used, and limitations of those purposes. For example, the Superfund Technical Assistance Grants (66.806) may be used to obtain technical assistance in interpreting information about the hazard at a particular site. • The Eligibility Requirements detail who is eligible to apply for the assistance, as well as who may benefit from the assistance. In addition, this section outlines the credentials and documentation that the applicant must produce to demonstrate eligibility for the program to EPA. • In the Application and Award Process section, the CFDA provides detailed information on the requirements that must be met to apply for the assistance. The section begins by outlining the procedures for pre-application coordination between EPA and the applicant, and goes on to discuss the application procedure itself. Additional information is provided on deadlines, disputes and appeals, and the renewal process. • Information is also available in the CFDA for assistance considerations, post assistance requirements, financial information, program accomplishments, regulations, guidelines, literature information contacts, related programs, examples of funded projects, and criteria for selecting proposals. 1.19 ------- VIEWGRAPH * 19 NON-CATALOGED EPA PROGRAMS • Some EPA Training Programs for States (e.g., Training for Wastewater Treatment) • EPA Fellowship Programs • New EPA Programs that do not Meet CFDA Publishing Deadlines T I T L E: Non-Cataloged EPA Programs KEY POINTS: • For a variety of reasons, several programs are not listed in the CFDA (examples provided on viewgraph). • In addition to the programs listed on the viewgraph, three additional types of programs are not listed in the CFDA: “pilot” programs, “one time only” programs, and “special studies, investigations or surveys.” 1.20 ------- ASSISTANCE ADMINISTRATION MANUAL • Provides Policies and Procedures • Chapters Follow Phases of the Assistance Process • Includes Numerous Relevant Circulars and Directives as Appendices VIEWGRAPH * 20 T T L E• Assistance Administration Manual KEY POINTS: • The AAM is a major source of guidance for GMOs. It provides policies and procedures for managing administrative aspects of all EPA financial assistance programs except the Scientific Activities Overseas Program. • The AAM is organized largely according to the different phases of the assistance process including application, award, and post-award phases. • The AAM includes reference material, such as copies of regulations and 0MB Ci rcu lars related to assistance administration. • The AAM is issued by GAD, which is also responsible for keeping the manual current. 1.21 ------- EPA BUDGET FORMULATION AND EXECUTION ( ) MODULE II ------- EPA BUDGET FORMULATION AND EXECUTION BY ThE END OF THIS MODULE YOU WILL BE ABLE TO: • Explain the BasicElements of the Federal Budget Process, Including the Roles of the Executive and Legislative Branches • Understand the Level of Planning Involved In Formulating EPA’s Budget • Understand the Importance of Appropriations and Budget Execution Processes to EPA Operations • Identify the Procedures used in Funds Control • Understand the Importance of Sound Fiscal Management VIE WGRAPH # 1 TITLE: EPA Budget Formulation and Execution KEY POINTS: GM0s should know EPA’s budget formulation process in order to understand the assistance financial data in a grant document. • This module addresses the basic elements in budget formulation and execution at EPA. First, the module provides an overview of the budget process by defining the primary organizations involved in the process and the timeframe required to pass an annual budget. • Next, the module outlines the budget formulation process, including the initial planning by EPA components, the review and passback from 0MB, the submission of the President’s Budget, and the passage of an Appropriations Act. This discussion identifies several management tools available to EPA for the development of budget estimates. In addition, it will describe the three types of appropriations used to fund EPA activities. • The module discusses the process of developing operating plans that reflect the funding levels in the Agency’s budget. • The module next delineates the Agency’s practices with regard to funds control. This discussion covers the issuance of Advices of Allowance, distribution of authority to spend money, and requirements for obtaining modifications to the allowance. • Finally, the module will highlight the importance of effective fiscal management. 2.1 ------- EPA AND THE FEDERAL BUDGET PROCESS +1 VIE WGRAPH # 2 TITLE: EPA and The Federal Budget Process KEY POINTS: There are four “major players” in the formulation of EPA’s budget: EPA, The Office of Management and Budget (0MB), Congress, and The President. Each plays a distinct role in the process, although a successful effort requires a great deal of cooperation. • The Federal fiscal year runs from October through September. Preparation of the EPA Budget for a given fiscal year is begun at least 18 months prior to the beginning of that fiscal year. • The fiscal year during which planning is begun for a specific annual budget is known as the “outyear”; the following fiscal year, during which most budget preparation activity occurs, is known as the “budget year”; and the fiscal year during which the budgeted funds are actually allocated by 0MB and spent by EPA is called the “operating year.” For example: - FY 90 is the outyear for preparation of the FY 92 budget - FY 91 is the budget year for preparation of the FY 92 budget - FY 92 is the operating year for the FY 92 budget. 2.2 ------- SCHEDULE TO DEVELOP FY 92.BUDGET 0 U I Y E A R B U D G E T Y E A R OPERATING YEAR VIE WGRAPH #. 3 KEY POINfS: OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH i o APRIL JUNE AUGUST SEPTEMBER DRAFT OPERA11NG GUiDANCE . AA BUDGET DEVELOP&ENT REVISIONS TO DRAFT OPERATING GUiDANCE RE ON AND HG EET TO IDENTIFY ISSUES PREPARA11ON OF INTERNAL BUDGET o ADMPISTRATOR S HEARINGS VITh AAS o INTERNAL REVIEWS & APPEALS D BUDGET SUBI SS 1ON TO CUB CUB HEARINGS OCTOBER NOVEMBER DECEMBER JANUARY FY FEBRUARY 1991 MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER 0MB REVIEW AND PASSBACK PREPARATION OF PRESIDENTS BUDGET RNAL FY 52 OPERATING GUiDANCE CONGRESS REVIEWS BUDGET AND ENACTS APPROPRIATION F ’( OCTOBER 1992 EPA IMPLEMENTS FY 1092 BUDGET TITLE: Schedule to Develop FY 92 Budget The first step in the EPA budget development process is the preparation of the Agency Draft Operating Guidance. The Administrator issues this in October to convey views on the issues the Agency should address, or the initiatives it should pursue, during the formulation of the budget. By the following January, the Administrator issues the revised Agency Operating Guidance. This guidance is based on input from the Assistant Administrators (AAs). The Office of the Comptroller (00) is EPA’s contact with 0MB and Congress on budget issues. The 00 works with the Administrator, all Headquarters (HO) offices, and the program divisions to develop and execute their budgets and financial plans. In the spring of the outyear, in the Agency Operating Guidance, the OC communicates to the budget staff the position of the Administrator on key issues facing the Agency, including a preliminary indication of the amount of resources needed for the Agency in the coming year. This Guidance is directed to the staff responsible for developing the budget of each office, including each administrative and program office. Under the Superfund program, EPA uses several management tools to project workload and establish priorities. These tools include: - Superfund’s Priority Setting Matrix which ranks projects based on the seriousness of the threat to human health and the environment. - Superfund Comprehensive Accomplishments Plan (SOAP) which is a document used for planning, tracking, and evaluating Superfund program activities. 2.3 ------- VIE WGRAPH #3 TITLE: EPA Budget Fonnulation. KEY POINTS: Continued Comprehensive Environmental Response, Compensation, and Liability Information System (CERCLIS) which contains information on the planning and progress of activities under Superfund. • The OC next issues the Final Resource Targets which is a modification of the Preliminary Resource Targets provided by the Assistant Administrators. The administrative and program offices finalize their budget request based on these final targets and submit them to the OC. The OC prepares briefings on the budget requests for the Administrator. • By mid July of the outyear, the Administrator begins hearings with the AAs on the budget requests, and subsequently makes a determination on each request. Individual determinations may be appealed by the relevant AA. The Administrators final determinations become the Agency’s 0MB Budget Submission. • 0MB holds hearings with all government agencies to review budget requests. These reviews (which begin near the end of the outyear) are followed by one or more “passbacks” as 0MB and the Agency work toward agreement on the the details of the budget request. 0MB issues its Final Passback Decision in December of the budget year, which is used by the Agency to develop the President’s Budget. • By law, the President’s Budget is submitted to Congress on the first Monday in February. Congressional committee hearings begin in the spring. • There are thirteen individual appropriations. EPA is included as part of the “VA, HUD, and Independent Agencies Appropriation.” The House and Senate appropriations committees act independently to develop proposals on each appropriation account, e.g., Superfund and The Office of Water, and present their proposals to their respective chambers for a vote. If they approve differing versions of the bill, representatives of the House and Senate leadership meet in “In Conference” to settle differences between their proposals. • The Omnibus Budget Reconciliation Act of 1990 sets discretionary spending limits that are adjusted according to specific provisions in the Act. These spending limits are enforced with an across-the-board budget cut known as a sequester. Programs that are not discretionary are financed by the pay-as-you-go method. • Congress then passes an Appropriations Bill for each appropriation which is sent to the President for signature. Ideally, this signature is obtained before the beginning of the fiscal year in which the budget is to be executed. If not, the President may sign a continuing resolution to provide agencies with operating funds until an Appropriation Bill is signed. (see p. 2.10) • Certain projects are documented as separate line items in the Appropriations Act and the Congressional Reports.. These projects are allocated a specific amount of the appropriations. These projects are funded with line item awards. 2.4 ------- EPA OPERATING GUIDANCE AND • OPERATING PLANS • AGENCY QPERATING GUIDANCE Is Finalized by HO and Distributed to the Regions and States to Assist In the Development of Operating Plans • AGENCY OPERA11NG PLANS are Written by HO and Regional Offices and Submitted to Congress during Budget Hearings to: - Provide a Detailed Justification of the Budget Request by Providing Specific Plans or Objectives that Reflect the intent of the Agency Operating Guidance - Ensure Equitable Distribution of Funds to all HO and Regional Allowance Holders VIEWGRAPH # 4 TITLE: EPA Operating Guidance and Operating Plans KEY POINTS: At the same time that the President’s Budget is submitted to Congress, the Agency is working on a parallel process to translate the President’s Budget into Operating plans. The Agency Operating Guidance provides guidelines for the development of an operating plan by Headquarters and each Regional office. • The Headquarters operating plan includes a detailed budget breakdown of intramural and extramural funding for each administrative and program office, including each division and branch. Regional operating plans are written in consultation with the States. • These plans are compiled into a single Phase I Operating Plan, which is evaluated by the OC for consistency with the Agency Operating Guidance and the funding expectations of the President’s Budget. The Phase I Operating Plan is submitted to Congress in justification of the Agency’s budget request and, in response to Congressional comment, will go through two more formal revisions before the end of the Congressional hearings. 2.5 ------- STRATEGIC TARGETED ACTIVITIES FOR RESULTS SYSTEM (STARS) • Tracks Activities Identified in Operating Plans • Used to Monitor Annual Agency-Wide ObjectIves VIEWGRAPH# S TITLE: Strategic Targeted Activities For Results System (STARS) KEY POINTS: • Once approved by Congress, the select objectives delineated in the Headquarters and Regional operating plans are entered into STARS. • STARS is the Agency-wide accountability system established by the Administrator to monitor the environmental objectives identified in the Agency Operating Guidance, and further defined in the Agency Operating Plans. STARS replaced Strategic Planning and Management System (SPMS) at the beginning of FY 1991. • STARS is maintained by Office of Program and Policy Evaluation (OPPE). Quarterly, each program office reports to OPPE to indicate progress made on targeted objectives. 2.6 ------- TYPES OF APPROPRIATIONS o ENABUNG/AUTHORIZING STATUTES o INDIVIDUAL APPROPRIATiON ACCOUNTS - SALARIES AND EXPENSES (S&E) - ABATEMENT, CONTROL, AND COMPUANCE (AC&C) - RESEARCH AND DEVELOPMENT (R&D) - SUPERFUND (SF) • CONSTRUCTION GRANTS (CG) - BUILDINGS AND FACILITIES (B&F) -LUST • -INSPECTOR GENERAL VIEWGRAPH # 6 TITLE: Types of Apprôpria tions KEY POINTS: • As discussed in Module 1, EPA’s operating authority is derived from a number of statutes, most of which address concerns with particular environmental media, e.g., air quality, hazardous waste cleanups, water quality. These statutes are divided into individual sections that authorize specific action by EPA, including grant making authority. • The enabling legislation is supported annually by appropriations that provide EPA with spending authority to carry out its missions. Congress provides EPA with spending authority through 8 individual appropriations: Salaries& Expenses (S&E); Abatement, Control, and Compliance (AC&C); Research and Development (R&D); Hazardous Substance Response Team Trust Fund (also known as Supe fund); Construction Grants; Building and Facilities (B&F); Leaking Underground Storage Tanks (LUST); and the Inspector General (IG). When taken in combination with the functions described in the enabling statutes (e.g., the Clean Air Act), these categories of funding require complex cross-cutting aggregations of data in EPA’s budgeting and accounting systems. • Salaries and Expenses: This appropriation finances salaries and related costs associated with administering the program within EPA. It incorporates all costs exclusive of grant program, program-specific contractual agreements, and hazardous substance response actions. • Abatement, Control, and Compliance: This appropriation includes funds for contracts, grants, and cooperative agreements for pollution abatement, control, and compliance activities. • 2.7 ------- VIEWGRAPH #9 TITLE: Types of Appropriations KEY POINTS: Continued Research and Development: This appropriation finances research and development through contracts, grants, and interagency agreements. These activities provide the scientific basis for EPA’s regulatory actions. Hazardous Substance Response Trust Fund (Superfund): This appropriation provides funds for the implementation of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended. This Act provides authority for responding to and cleaning up hazardous substance emergencies and uncontrolled waste sites. • Construction Grants: This appropriation covers grants made to local public agencies for the construction of municipal wastewater treatment facilities to assist States and localities in attaining and maintaining water quality standards. • Buildings and Facilities: This appropriation provides for construction, repair, improvement, extension, alterations, and purchase of fixed equipment or facilities of or used by EPA. • Leaking Underground Storage Tanks (LUST): This appropriation provides funds for the cleanup of releases from leaking underground storage tanks. • Inspector General: This appropriation provides funds for EPA audit and investigation functions to identify and correct management and administrative deficiencies which could lead to fraud, waste, or abuse. 2.8 ------- LIMITATIONS ON APPROPRIATIONS EPA HAS ThREE TYPES OF FUNDS FROM APPROPRIATIONS o ONE-YEAR MONEY o TWO-YEAR MONEY o NO-YEAR MONEY VIEWGRAPH #7 TITLE: Limitations on Appropriations KEY POINTS: • Depending on the type of project, Congress appropriates funds to be available for varying periods of time. • EPA receives one-year appropriations for operational funds including salaries and expenses. • Two-year funds include continuing program and project assistance. Similar to one-year funds, these fynds revert to the Treasury if not obligated during the two years identified in the appropnations. • EPA receives no-year money for its continuing and project type assistance for construction grants, Superfund, and Leaking Underground Storage Tanks (LUST). This type of appropriation can be carried over into successive fiscal years and does not expire until all of the authority has been used. 2.9 ------- VIE WGRAPH # 8 CONTINUING RESOLUTIONS • May be Passed to Keep the Government in Operation Until Appropriations are Provided • Specify a Rate of Spending TITLE: Continuing Resolutions KEY POINTS: • In the event that Congress does not pass the appropriations bills by the beginning of the fiscal year, the President may sign a “Continuing Resolution” to keep the Government in operation until appropriations are provided. Under a Continuing Resolution, activities for all 13 appropriations usually are put together into one temporary spending bill. • The Continuing Resolution specifies a rate of spending. Usually. this rate is based on a percentage of each group’s prior year spending. 2.10 ------- FUNDS CONTROL 0MB APP0MIIONS RiNDS TO EPA I EPA OC ALLOCATES FUNDS TO HO AND REGIONAL ALLOWANCE HOLDERS ThROUGH ADVICE Of ALLOWANCE (AOA) HO AND REGIONAL OFACES COMIUT, OBUGATE, AND EXPEND FUNDS VIE WGRAPH # S TITLE: Funds Control KEY POINTS: While Congress appropriates funds for EPA, 0MB apportions funds to the Agency each quarter, thereby limiting the obligations and expenditures the Agency can make each quarter. • EPA’s OC receives OMB’s apportionment and, in turn, allots funds to Headquarters and Regional allowance holders. An allowance holder is an individual who is responsible for monitonng and reporting on the status of funds covered in the allowance. • Funds are passed down to Headquarters and Regional allowance holders by means of an Advice of Allowance (AOA). (The AOA will be discussed in detail in the next slide.) AOAs are used to fund a specific part of the Agency’s operating plan; they provide spending authority to each allowance holder, including the authority to commit, obligate, and expend funds. - A commitment is a formal action to reserve funds in an allowance for a specific purpose in the future (e.g., grants, contracts, payroll). - An obligation is a binding agreement to spend a given amount of money for a transaction that occurs during a given period. An obligation occurs when an award is made from the allowance. Payment may be made either during the same period or during a future period. - An expenditure occurs when a payment is made for goods and services received. 2.11 ------- VIE WGRAPH # 8 TITLE: Funds Control KEY POINTS: Continued An Allowance Holders spending authority may include the authority to use funds for both intramural and extramural activities. - Intramural activities include program support functions performed by EPA employees. Intramural funds are used for payroll, travel, training, supplies, and equipment. - Extramural activities include program support functions performed by non-EPA organizations. Extramural funds are used for assistance agreements, grants, contracts, and interagency agreements. • Although many of EPA’s assistance agreements and contracts are funded with multiple-year or no-year money, the Operating Plan is issued (including new year appropriations and prior year carry-over) at the beginning of the fiscal year and revised during the year. • All EPA financial data, including commitments, obligations, and expenditures, is recorded in the Integrated Financial Management System (IFMS), which serves as the Agency’s automated General Ledger. Additional information on IFMS is provided in Module IV. • For projects with a “bona fide funding need,” obligated funds may be carried over from one fiscal year to the next or beyond the original project period. - Bona Fide Need Justification - The bona fide need rule states that a fiscal year appropriation may be obligated only to meet a legitimate or • bona fide need arising in the fiscal year for which the appropriation is available. This rule applies when you have end of year one-year funds that you either must obligate or lose. 2.12 ------- ADVICE OF ALLOWANCE (AOA) PROCESS AND PROCEDURES • The AOA Is Necessary to Ensure that EPA does not Exceed its Appropriation or Apportionment • The Office of the Comptroller Distributes AOAs at the Beginning of each Quarter • The Allowance Holders Distribute the AOA to Responsibility Centers o New Obligation Authority o Carryover Authority • Funds May Be Shifted Via A Reprogramming Request VIE WGRAPH # 10 TITLE: Advice of Allowance (AOA) Process and Procedures KEY POINTS: The Integrated Financial Management System (IFMS) produces a report entitled “The Environmental Protection Approved Operating Plan.” This report is provided to each Allowance Holder and is broken out by appropriation, e.g., LUST, 1G. • Because the Operating Plan and subsequent Advice of Allowances (AOA) are based upon the spending limits imposed in the Agency’s appropriation and the apportionment from 0MB, these components, and therefore the entire Agency, must not exceed the Agency’s budget authority. • , The OC notifies each Allowance Holder at the first of the year of the amount they will have for the year, and transmits the AOA to the Allowance Holders at the beginning of each quarter. Upon receipt, the Allowance Holders distribute the funds to the responsibility centers within the allowance (e.g., Office of the Regional Administrator, Superfund Extramural, etc.). This distribution provides managers with parameters with which to direct the operations of their responsibility center; however, the Allowance Holder is responsible for ensuring that’ over-obligations do not occur. • There are two categories of allowances: New Obligation Authority and Carryover Authority. New Obligation Authority is based on the eight Congressional Appropriations which are funded each year (S&E, AC&C, SF, R&D, CG, B&F, LUST, and IG - see viewgraph #6). Agency Carryover Authority is used to spend unobligated balances remaining in 2.13 ------- VIEWGRAPH# 10 TITLE: Advice of Allowance (AOA) Process and Procedures •KEY POINTS: Continued multi-year appropriations (two-year and no-year funds). (Agency Carryover Authority is a distribution of appropriated funds, that EPA did not obligate or spend before the end of the fiscal year, and is not to be confused with the term “carryover” under a specific grant award, which relates to funds awarded but not spent by the recipient by the end of the budget period.) Both New Obligation Authority and Carryover Authority funds in the AOA are displayed in conformance with the EPA Budget classification structure (see next two slides). The Allowance Holder can request a redistribution of resources within the funding limits of the AOA (there is a $500,000 limit for reprogramming funds between programs) or can request additional funding through a reprogramming request entered into IFMS. 2.14 ------- BUDGET CLASSIFICATION STRUCTURE WATER OUAUTY PROGRAMS ____________ 0 AuthorIzed by e, blmg atatutu (e.g. Ct.w Water Act) MEDIA o Funded from .pproprlatlon., (e.g. Abatement, Control & Compliance; Salaries & Expenees) Pffi I’ R&D AC&C Enforcement i wL Effh ent GrL%t MUnLIPII Wat.rLThy wajoualfty SUBAC11VITYI jaIlty AaeWc So Strategy Monhoring & i ouldelinie Pvow.ms Cor roI Implementat Ion Anaiyels __ I BUDGET Waete Treatment Municipal Waite ELEMENT Operations Treatment Faclifty Maintenance Construction I I I I I I I I _________ S&E AC&C S&E AC&C VIEWGRAPH #11 TITLE: Budget Classification Structure KEYPOINTS: • EPA’s budgeting classification structure is a hierarchy with seven major levels. The first two levels, enabling/authorizing statutes and appropriations were discussed under Viewgraph #6. The remaining levels are: media, functions, subactivities, budget elements, and program elements. • MEDIA - All EPA activities (and resources) fall within EPA’s “media” categories. Examples of media include “Air Quality,” “Water Quality,” and “Pesticides. • FUNCTIONS - Media categories are divided into individual “functions”. For example, within the media category ,“Water Quality” is divided into three functions: R&D, Abatement and Control, and Enforcement. SUBACTIVITIES - Each function is further subdivided into several broad classifications called “subactivities.” For example, Water Quality is divided into six subactivities: Water Quality Management, Effluent Standards and Guidelines, Grant Assistance Programs, Water Quality Strategies Implementation, Water Quality Monitoring and Analysis, and Municipal Source Control. 2.15 ------- VIEWGRAPH #11 TITLE: BUDGET CLASSIFICATION STRUCTURE KEY POINTS: Continued BUDGET ELEMENTS - Subactivities are split further into “budget elements.” For example, the Municipal Source Control subactivity is divided into two budget elements: Municipal Waste Treatment Facility Construction, and Waste Treatment Operations and Maintenance. PROGRAM ELEMENTS - The lowest level of control is the “program element.” If a program is funded from only one appropriation (as is Waste Treatment Operations and Maintenance), the terms “budget element” and “program element” are synonymous. If a program is funded from two appropriations (as is Municipal Waste Treatment Facility Construction), the term “program element” refers to each of the two components of the budget element. There are over 300 program elements. If a program is supported by more than one appropriation, it will have a program element for each appropriation based on the authorizing section of the law. Some program elements may be supported by more than one authorizing section of law. 2.16 ------- PROGRAM ELEMENT CODE STRUCTURE PROGRAM ELEMENT NUIImER B — 17 — A-.. 2 — APPR 1 1)ON PROG NT FUi . SUBAC11VTY I SEQUENCE ____ Lt1 a czI uTY ‘1 C ARACTER ___ lRaO N LAS 11cOHTROLa cc i P c Aii’J a L)f;YELcwUi W C. O NI Q WATER S. HAZAROOt WASTE D. IUI .O(NQS S FAaLIT1I$ & uuuir E. PESnaDES L DCIENTIRC ACflW!WS OYERSIAZ 4. pAaLmES P. RACIATTCN OP TRUCTIOH GRANTS & MANAGEMENT a EUPEORT 0. NOISE H. 09IS 18 PESEARC* I.a PAOIU IES I. sam ACTW OVERSEAS H. WTIROISaPt,IARY 7 TM REGULATORY J. ASATE. C0NTRO acou,.co H. GENERAL CO!JCIL K. R&O .ClO L TOXIC SUISTANCEE S. CONSTRUCTION GRANTS N 1 1.008 a PAOI. C?O N. HEW PA UTTE8 S. 14*2 SUE RESP ACTION N HAZSUS RESPO- REINS H. ENERGY 1. W4ALLOC OMWCONG S. HAZEtIS RESP. CO TTONS P. REPAiRS S PROVENENTS T. 14*2 SUB RESP Th P 1 540 N PROGRAM MANAGEMENT V. SC CONTMBUTED FOB 5. AGENCY MANAGEMENT W. CONSOUDATED WORIONO P 1 540 T. REGIONAl. MANAGEMENT X. RBNBURSEMENTS W. CONSTRUCTION GRANTS Y. RETVLVIHG P 1140 X . SUPPORT GRANTS Z. ALLOCATION *CCO114TS Y. $UPERF 1 5ID Z. TI4ALLOC ONE /cONG ACTIONS VIEWGRAPH #12 TITLE: Program Element Code Structure KEY POINTS: • During the Operating Year or current year budget execution, the OC controls • Allowance Holder’s spending by Program Element. and within Program Element by various individual object classes (e.g., travel, contracts, grants/loans). • The code chart above illustrates how to read a program element number and relate the program element number to the overall budget structure. The program element number is always a six-character code which identifies the program element, its appropriation, its budget activity/media, function, and its budget subactivity. • In IFMS, the Regional AOA or “Approved Operating Plan” is organized and displayed by Program Element and object class with authorization levels by fiscal quarter. The Approved Operating Plan with cumulative updates, is available to the Regional Budget Office through IFMS on a daily basis. 2.17 ------- PROGRAM ELEMENT CODE STRUCTURE VIEWGRAPH #12 TITLE: PROGRAM ELEMENT CODE KEY POINTS: continued • Program element definitions are contained in the EPA “Resource Planning and Budget Manual.” The latest version of the program element definitions is current only through FY 85. EPA Headquarters Budget Division is in the process of updating and revising the PE definitions. Accurate PE definitions are essential to GMOs in determining the legal and administrative use of funds proposed for assistance awards, e.g., code of law, grant authority, delegation of authority. 2.18 ------- IFMS APPROVED OPERATING PLAN ( AOP ) OBJECT rROORAM ELEMENT P OOR*M ELEMD4T 1111.5 TOTAL BPENOU8O AUThO4VTY B17A2C 04 DA CONT AGEN RES (SEC 105 GRANTS) 25 CONTRACTS 41 GRANTS /LOANS 12,442,400 1,537,600 818,800 497,750 15,296,550 12,442,400 1,537,600 818,800 497,750 15,296,55C BITA2C 04 D A CONT AGEN R ES (SEC 105 GRANTS 25 CONTRACTS 41 GRANTS 11.0*148 12 ,442.400 1,537.600 816,800 497.750 15,206,530 12,442,400 1,537.000 815.800 437,750 15.286,550 VIEWGRAPH #13 TITLE: IFMS - Approved Operating Plan (AOP) KEY POINTS: • The Regional Operating Plan (AOP) is available daily through IFMS from the Regional Budget Office. The Operating Plan displays by Program Element and Object Class the total spending authority by • Fiscal quarter and fiscal year. Updates may be issued through IFMS to add to or delete from the total spending authority in any given Program Element. Updated line items are each shown on a separate page of the Operating Plan and entitled the “Transaction History Report.” • For example, the enlarged area shows the Program Element B17A2C or AC&C extramural funds (appropriations Code B); Program Element sequence (17); Media-Air (Media Code A); function AC&C (function code 2); and subactivity sequence C in Object Class 41 (Grants/loans) the amount of $15,296,550. The Program Element Title (and definition manual) identified these funds as available for Clean Air Act/Section 105, Air Pollution Control grants and cooperative agreements to State and local governments. REQ 4 RE ONAL AO06MSTRATO AA 04 ATLANTA AB 1 &TEMENT & CONTROL Ff91 IrJJOORAM SUB-ELEMENT GIRl UMBER 1111.1 $1,000 ENVIRONMENTAL PROTECIION AGENCY APPROVED OPERA11NO PLAN BY ALLOWANCE HOLDERS & OBJECT CLASS OTR2 0Th3 0Th4 TOTAL GiRl $1 ,000 $1,800 $1,000 $1,000 P08 PAGE 18 OTSE OTRS OTR4 TOTAL 7 POS P05 P05 828A2F 04 GA MR QUALITY MANAGEMENT IMPLEM. 25 CONTRACTS 99.800 4.250 17.000 121.856 2i9 ------- Viewgraph #13 Title: Approved Operating Plan Key Points: continued The most common object classes for the AC&C Appropriation are contracts (25) and grants and loans (41). If, for example, all spending authority is distributed in the AOP in Object Class 25 under any Program Element, an assistance award cannot be issued until the needed amount has been legally reprogrammed into Object Class 41. • When funds (spending authority) are ready to be committed for an approved/authorized purpose under a specific Program Element, a Commitment Notice (EPA Form 2550-9) is prepared (usually by the Budget Office for all programs) to reserve the funds. The funds are identified on the CN from the AOP using the EPA standard 10 digit account number, as shown on the next slide. • The Allowance Holder (AH) enters the commitment into the Automated Document Control Record (ADCR) which downloads the information into IFMS. 2.20 ------- EPA ACCOUNT CODE STRUCTURE FUNDS FORMER AWARD THIS ACTION AMENDED TOTAL I C. IPA *,,,.,.ni ,st a..... $65,000 51,389,000 $1,954,000 II. IPA k,a. .d A . , ,. ,t 0 0 0 IC. Un . .nICd — V.w Se.... 0 0 p IC. 0IC F .d . N F .IC 0 0 0 IC. n pit cwl . . ..n 65,000 1,036,992 1,101,992 5. C m. C anU .n.a c o, V ‘1 U IC. l.05 CCflm. .tMfl U U U ,7.O I C. rCCmtm.on 0 0 ppoi.oec..t 130,000 2,425,992 2,555,992 - - IC. P OoRAM B.EPANT PY *P OPNIATION DOC. • , ,O4 . NO.. AOCOUNT NUNCER ECT CL*aP UGAflOICOEOSUQAn0.I 101 )B1 7A2C 01 681/20108 J li 181 704T0At4J° ” 41.12 r $1,389,000 B17 04 AL r v lOt digit 2nd,3rd,4th digits Sth,eth digit. 7th digit 1 8th digit 19th&lOth digits la.t digit of yacr first S digit. of •Ilowar .os hold., tuporwibllfly SCtlOfl of laW local of appropriation program cod, numb., cant, cod, numb.r option QL nUmbf - cod. 1s11 SFllu.t activity SF ltS cod. id.nhiil,, g tr .cicabi. h.m tr.ckabl. it. ... activity cod. id.nt lf I., VIEWGRAPH #14 TITLE: EPA Account Code Structure KEY POINTS: • For each Program Element, the AOA creates one or more account numbers, against which spending actions are charged in IFMS. The figure above shows the standard 10 digit alpha/numeric account number for the FY 91 Air Pollution Control Program. • The first digit is the last digit of the Source of Year Funding e.g., FY 1991. • The 2nd, 3rd, and 4th digits are the first 3 digits of the program element number , e.g. B17A2C. • The’5th and 6th digits identify the allowance holders, e.g., 04 = Region 4. •. The 7th digit identifies the Responsibility Center, e.g., T=AC&C, Program Grants. 2.21 ------- VIEWGRAPH #14 Title: EPA Account Code Structure Key Points: Continued The 8th digit identifies the Section of Law by use of a pseudo code. Zero is used where the program element is applicable to only one section of law. The numbers 1, 2, 3, 4, or 5 will be used where more than one Section of Law is applicable to a single program element. For Superfund awards, this digit identifies the SF activity code, and for LUST awards, the activity code When an account number is for a trackable item, (see Comptroller Policy Announcement No. 91-01) the 8th digit is a special “trackable item” code. Reports of spending for trackable items can be retrieved by reading this field. The 9th and 10th digits are an alpha/numeric local option for all program elements except Superfund and trackable items. For Superfund, these fields are used for the site identifier code; for trackable items, the item identifier. 2.22 ------- EFFECTIVE FISCAL MANAGEMENT • Necessary to Account for Funds • Necessary for Effective Program Management • Crucial for Cost Recovery under Superfund VIE WGRAPH # 15 TITLE: Effective Fiscal Management KEY POINTS: EPA activities are monitored closely by various interests to ensure that the Agency’s funding is used appropriately. These interests include: Congress, EPA Inspector General, EPA HQ Comptrollers Office, EPA HQ Program Offices, Regional Program Oftices, the General Accounting Office (GAO), State Offices, and the Public. Sound fiscal management is important for accountability to all of these interests. • Sound fiscal management is also critical for assessing progress and setting project goals. It allows the organization to determine efficiency and permits a realistic evaluation of future accomplishments. • In the Superfund program, there is an added importance to this accountability: cost recovery. The recovery of costs incurred in the cleanup of Supertund sites through settlements with responsible parties is not possible if the Agency cannot demonstrate that all cleanup costs were justified and well-documented. 2.23 ------- REQUIREMENTS GOVERNING EPA ASSISTANCE AGREEMENTS #\1 DST4 PRO1 MODULE III ------- REQUIREMENTS GOVERNING EPA ASSISTANCE AGREEMENTS BY THE END OF THIS MODULE YOU WILL BE ABLE TO: • Explain the Role of Executive Orders, 0MB CIrculars, the Code of Federal Regulations, and EPA Policies • identify Key Executive Orders, 0MB Circulars, Federal Regulations, and Policies Governing EPA Assistance Programs • Discuss the Special Provisions Governing Indian Tribal Governments VIEWGRAPH # 1 TITLE: Requirements Governing EPA Assistance Agreements KEY POINTS: • EPA assistance is governed by many Federal requirements. Knowledge of these requirements is very useful to personnel involved with the various phases of the assistance administration process. • This module describes the contents of Executive Orders, 0MB Circulars, Federal regulations, and EPA policies. • Next, this module reviews the primary requirements governing EPA assistance programs and the special provisions pertaining to Indian Tribal governments. 3.1 ------- TYPES OF REQUIREMENTS GOVERNING EPA ASSISTANCE • Federal Statutes • Executive Orders • 0MB Circulars • Codified Federal Regulations • Agency Orders and Policies VIEWGRAPH # 2 TITLE: Types of Requirements Governing EPA Assistance KEY POINTS: • Federal statutes are laws enacted by the United States Congress and signed by the President. EPA administrative and program activities must be conducted consistent with these requirements. Deviation from statutory requirements is not allowed. (For more information regarding the primary statutes governing EPA assistance programs, see Module I.) • Executive orders are requirements issued and signed by the President of the United States. They pertain to the business of Federal agencies and hold the force and effect of law . • 0MB Circulars are guidelines issued by the Office of Management and Budget. They pertain only to the business of Federal agencies. While they are binding on the Federal agency or agencies to which they relate, they do not hold the full force and effect of law . EPA regulations are developed consistent with 0MB Circulars. • The Code of Federal Regulations contains rules developed by Federal agencies and issued by the Federal government to implement Federal statutes or agency policy, and are therefore legally enforceable. A Federal regulation cannot conflict with a statute . Codified Federal regulations may govern the activities of a Federal agency or the general public. EPA regulations are codified in Title 40 of the Code of Federal Regulations . • EPA orders and policies are agency requirements issued by EPA Headquarters. In areas covered by both an order and a policy, the order supercedes the policy . Regions may also issue regional policies. 3.2 ------- EXECUTIVE ORDERS • E.O. 11625 National Minority Business Enterprise Program • E.O. 12432 MInority Business Enterprise Development • E.O. 11738 Clean Air/Water Violators • E.O. 12138 NatIonal Women’s Business Enterprise Policy • E.O. 12372 Int rnnverrimental Review of Federal Programs • EO. 12549 Debarment and Suspension Rules For Nonprocurement Activities VIEWGRAPH# 3 TITLE: Executive Orders KEY POINTS: • This viewgraph identifies the primary executive orders governing EPA assistance agreements. • Executive Order 11625, “National Minority Business Enterprise Program,” issued October 13, 1971, clarified the authority of the Secretary of Commerce to implement policy and to assist minority business enterprise. This Order required the Secretary to develop comprehensive plans and specific program goals to promote the use of growth of minority business enterprises, as well as the monitoring and reporting systems required to implement these plans and programs. This Order also requires the head of each Federal department or agency to furnish information and reports in a manner prescribed by the Secretary of Commerce. It further stipulates that within the constraints of law and appropriations, Federal departments and agencies must foster and promote minority business enterprise. • Executive Order 12432, “Minority Business Enterprise Development,” issued July 14, 1983, directed all Federal agencies to: - develop an MBE plan on an annual basis - establish MBE objectives - identify methods for encouraging prime contractors and grantees to utilize MBEs - build upon programs administered by the Small Business Administration and Minority Business Development Agency - furnish an annual report regarding the accomplishments of their MBE programs - establish programs to deliver management and technical assistance to MBEs. 3.3 ------- VIEWGRAPH # 3 (cont.) TITLE: Executive Orders KEY POINTS: • Executive Order 11738, “Clean Air,Water Violators,” issued September 10, 1973, prohibits the utilization of clean air/water violators for Federal contracts and projects funded, wholly or in part, with Federal grants or loans. • Executive Order 12138, “National Women’s Business Enterprise Policy,” issued May 18, 1979, directed a!l Federal agencies: - to strengthen women’s business enterprise and to ensure full participation by women in the free enterprise system - to take affirmative action in support of women’s business enterprise - to require the recipient’s of federal assistance to take appropriate affirmative action in support of women’s business enterprise, and to prohibit actions or policies which discriminate against women’s business enterprise. Federal agencies were also required to prescribe sanctions for noncompliance. • Executive Order 12372, “Intergovernmental Review of Federal Programs,” provides States the opportunity to review and comment on activities proposed for Federal funding. It is implemented in 40 CFR Part 29. • Executive Order 12549, “Debarment and Suspension Rules for Nonprocurement Activities,” provides authority to suspend or debar any “person” from participation in any Federally assisted project if necessary to protect the government’s interest. It is implemented in 40 CFR Part 32. • For a listing of the other Executive Orders that relate to EPA assistance programs, see Appendix 1-A of the Assistance Administration Manual . 3.4 ------- 0MB CI.RCULARS • A-21 Coat Principles for Educational institutions • A-87 Cost Principles for State and Local Governments A-lfl Cost Principles for Non-Profit Organizations • A-102 Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments • A-lb Grants and Agreements with institutions of Higher Education, Hospitals, and Other Non-Profit Organizations • A.128 Audits of State and Local Governments • A-133 Audits of institutions of Higher Learning and Other Non-Profit Organizations VIEWGRAPH # 4 TITLE: 0MB Circulars KEY POINTS: • This viewgraph identifies the primary 0MB Circulars governing EPA assistance • programs. • 0MB Circulars A-21, A-87, and A-i 22 provide the cost principles for charging project costs to Federal assistance agreements or grants. More specifically, these 0MB Circulars provide guidelines for determining whether or not project costs are allowable, allocable, and reasonable. (Cost principles are defined as the rules governing Federal reimbursement of project costs.) - 0MB Circular A-21, issued February 26, i979, and last revised on December 2, 1986, provides guidelines for educational institutions. - 0MB Circular A-87, issued January 20, 1981, provides guidelines for State and local governments. - 0MB Circular A-i 22, issued August 8, 1980 and last revised May 19, 1987, provides guidelines for non-profit organizations other than States, local governments, and educational institutions. • 0MB Circulars A-i 02 and A-i 10 provide uniform administrative requirements for managing the pre-award, award, and post-award phases of grant management. - 0MB Circular A-i 02, issued on March 3, 1988, establishes requirements for State and local governments. -• 0MB Circular A-i 10, issued April 1, 1976, establishes requirements for institutions of higher learning, hospitals, and other non-profit organizations. 3.5 ------- VIEWGRAPH # 4 (cont.) TITLE: 0MB Circulars KEY POINTS: 0MB Circulars A-i 28 and A-i 33 provide audit guidance. - 0MB Circular A-i 28, issued April 12, 1985, provides Federal agencies with policy guidance for implementing the requirements of the Single Audit Act of 1984, which governs State and local governments. - 0MB Circular A-i 33, issued March 8, 1990, provides policy guidance to Federal agencies for establishing uniform requirements for audits of institutions of higher education and other non-profit organizations receiving Federal assistance. - Additional audit requirements for financial assistance programs are described in Module XII. For a listing of other 0MB Circulars that relate to EPA assistance programs, see Appendix 1-A of the Assistance Administration Manual . 3.6 ------- TITLE 40 OF THE CODE OF FEDERAL REGULATIONS F T29 intergovornmeni, Review o. — A Programs and Activities PART 30 General Regulation for Assistance Programs For Other Than State and Local Governments PART 31 UnIform Administrative Requirements Far Grants and Cooperative Agreements to State and Local Governments PART 32 Government-wide Debarment and Suspension (Nonprocurement) end Government-wide Requirements for. Drug-Free Worlcplace PART 33 Procurement Under Assistance Agreements PART 35 State and Local Assistance PART 40 Resesrch end Demonstration Grants PART 45 TraIning Assistance PART 45 FellowshIps PART 47 Environmental Education Grants VIEWGRAPH # 5 TITLE: Title 40 of the Code of Federal Regulations KEY POINTS: • This viewgraph illustrates the primary EPA regulations governing assistance programs and recipients. - • These regulations are described further in subsequent viewgraphs. 3.7 ------- 40 CFR PART 29 • Provides intergovernmental Review Requirements • Applies to Most EPA Assistance Programs • Implements Executive Order 12372 VIEWGRAPH # 6 TITLE: 40 CFR Part 29 KEY POINTS: • 40 CFR Part 29, issued June 24, 1983, provides intergovernmental review requirements for EPA-specific programs and activities, as well as the appropriate communication channels for voicing comments. Intergovernmental review refers to coordinated review processes performed at two or more levels of government. • 40 CFR Part 29 implements Executive Order 12372 “Intergovernmental Review of Federal Programs,” which requires Federal agencies to allow State and local governments the opportunity to review proposed Federal financial assistance and direct Federal development impacting State and local programs. Further, Executive Order 12372 provides that where feasible, and to the extent permitted by law, State and local review processes and comments must be incorporated into Federal programs as early in the planning stage as possible. • Additionally, 40 CFR Part 29 implements provisions of the Intergovernmental Cooperation Act of 1968 and the Demonstration Cities and Metropolitan Development Act of 1966. • Indian Tribes are exempt from intergovernmental review requirements, but are encouraged to comply. 3.8 ------- 40 CFR PART 30 • Provides Administrative Requirements for Assistance Agreements to Other Than State and Local Governments • Implements 0MB Circulars A-21, A-hO, and A-122 0. UIEIJGRAPH ‘ 7 TITLE: 40 CFR Part 30 KEY POINTS: • 40 CFR Part 30 “General Assistance Regulation for State and Local Governments” was amended on October 1, 1988 and’retitled “General Regulation for Assistance Programs for Other Than State and Local Governments.” This regulation covers financial assistance awards made as, grants or cooperative agreements. • This regulation provides administrative requirements for all grant recipients • other than States, local governments, and Indian Tribes. Further, it establishes quality assurance guidance requirements. • Grants Management Offices (GMOs) should be aware that this rule currently governs .Supertund Technical Assistance Grants (TAGs). • 40 CFR Part 30 implements: 0MB Circular A-21 “Cost Principles for Educational Institutions,” 0MB Circular A-i 10 “Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-profit Organizations,” and 0MB Circular A-i 22 “Cost Principles for Non-profit Organizations,” and 0MB Circular A-i 33 “Audits of Institutions of Higher Learning and Other Non-Profit Institutions.” 3.9 ------- 40 CFR PART 31 • Provides Administrative Requirements for Assistance Agreements to State, Local, and Indian Tribal Governments • Replaced 40 CFR Part 30 for Grants to These Recipients • implements 0MB Circulars A-87, A-102, and A-128 VIEWGRAPH # 8 TITLE: 40 CFR Part 31 KEY POINTS: • 40 CFR Part 31, issued March 11, 1988, with an effective date of October 1, 1988, establishes uniform administrative rules for Federal grants and cooperative agreements and subawards to State, local, and Indian Tribal governments. • Prior to the issuance of 40 CFR Part 31, uniform administrative requirements for State and local governments were governed by 40 CFR Part 30, which now only governs assistance to non-profit organizations and interests other than States, local governments, and Indian Tribes. • Audit requirements contained in 40 CFR Part 31 are contained in 0MB Circular A-i 28 “Audits of State and Local Governments.” • Additionally, 40 CFR Part 31, implements 0MB Circular A-87 “Cost Principles for State and Local Governments” and 0MB Circular A-102 “Grants and Cooperative Agreements with State and Local Governments.” 3.10 ------- 40 CFR PART 32 • implements Executive Order 12549, Debarment and Suspension Rules For Nonprocurement Activities • Describes Drug-Free Workplace Requirements For Assistance Recipients VIEWGRAPH # 9 TITLE: 40 CFR Part 32 KEY POINTS: 40 CFR Part 32, issued May 26, 1988, and last amended May 3, 1990, implements Section 3 and Section 6 of Executive Order 12549 (regarding government-wide debarment or suspension) and selected provisions of the Drug-Free Workplace Act of 1988. It establishes: (1) rules for debarring or suspending parties; (2) government authority for compiling and distributing lists of parties debarred or suspended from receiving Federal assistance; (3) requirements governing EPA reporting of parties debarred or suspended from Federal activities; and (4) rules governing drug use among assistance recipients and their contractors. This regulation requires EPA to exclude debarred or suspended parties from certain types of assistance, and to report certain information about debarred or suspended parties to the General Services Administration. Debarment or suspension of a party by one assistance agency has a government-wide effect, i.e., it debars or suspends them from receiving assistance agreements from all Federal agencies. This topic is discussed further in Module V. (see Viewgraph 17) 3.11 ------- 40 CFR PART 33 Describes Procurement Requirements for EPA Assistance Agreements for Other Than States, Local Governments, and Indian Tribes VIEWGRAPH # 10 TITLE: 40 CFR Part 33 KEY POINTS: 40 CFR Part 33, issued March 28, 1983 and last amended March 11, 1988, describes requirements for procurement under assistance agreements for recipients other than States, local governments, and Indian Tribes. This regulation discusses procurement of supplies, services, and construction under EPA assistance agreements. This regulation supplements 40 CFR Parts 30, 32, and 35. More detail is provided on EPA’s procurement requirements in Module IX. 3.12 ------- 40 CFR PART 35 • Provides Program-Specific Assistance Requirements • Contains 15 Subparts Including Subpart 0 (Superfund) VIEWGRAPH # 11 TITLE: 40 CFR Part 35 KEY POINTS: • 40 CFR Part 35, issued October 12, 1982, was last amended on June 5, 1990, when Subpart 0 was finalized. While 40 CFR Parts 30 and 31 provide the general assistance requirements, 40 CFR Part 35 provides the program-specific assistance requirements. • The subparts of 40 CFR Part 35 which apply to construction grants are as follows: - Grants for Construction of Wastewater Treatment Work (Subpart C) - Reimbursement Grants (Subpart D) - Grants for Construction of Treatment Works/Clean Water Act (Subpart E) - Grants for Construction of Treatment Works (Subpart I) - Construction Grants Program Delegation to States (Subpart J). • The subparts of 40 CFR Part 35 which apply to non-construction grants are as follows: - Financial Assistance for Continuing Environmental Programs (Subpart A) - Cooperative Agreements for Protecting and Restoring Publicly Owned Freshwater Lakes (Subpart H) - State Water Pollution Control Revolving Funds (Subpart K) - Grants for Technical Assistance (Subpart M) - Cooperative Agreements and Superfund State Contracts for Superfund Response Actions (Subpart 0). - Financial Assistance for the National Estuary Program • Subparts B, F, G, L, and N are reserved for future use. 3.13 ------- 40 CFR PARTS 40,45,46, and 47 • PART 40 Requirements for Research and Demonstration Grants • PART 45 Requirements for Training Assistance • PART 46 Requirements for Fellowships • PART 47 Environmental Education Grants VIEWGRAPH # 12 TITLE: 40 CFR Parts 40, 45, and 46 KEY POINTS: EPA provides three primary types of assistance with a nationwide impact: research and demonstration training, and fellowships. These types of assistance are normally awarded by headquarters assistance and are governed by 40 CFR Parts 40, 45, and 46, which are described below. • 40 CFR Part 40, issued May 15, 1973, and last amended June 24, 1983, establishes EPA’s requirements for awarding and managing research and demonstration grants. Research and demonstration projects are funded to research and analyze various environmental issues. • 40 CFR Part 45, issued October18, 1984, implements EPA’s requirements for awarding and managing training projects. The purpose of this assistance is to improve and develop the skill base of students and professionals in the environmental field. Training assistance under 40 CFR Part 45 includes the following: (1) developing, expanding, planning, implementing, and improving environmental training; (2) increasing the number of trained pollution control and abatement personnel; (3) upgrading the level of occupational and professional training among State and local environmental control personnel; (4) training people to train others in occupations involving pollution abatement and control; and (5) bringing new people into the environmental control field. • 40 CFR Part 46, issued October 18, 1984, sets forth EPA’s requirements for awarding and managing fellowships. This program was created to enhance the capabilities of State and local agencies in the area of environmental protection and management. EPA fellowships are awarded to individuals for specific educational programs in the area of environmental science. EPA sponsors the following three types of fellowships: (1) local agency fellowship, (2) State agency fellowships, and (3) special fellowships. 3.14 ------- VIEWGRAPH # 12 TITLE: 40 CFR Parts 40, 45, 46, and 47 KEY POINTS: Continued • 40 CFR Parts 40, 45, and 46 apply to State, local, and Indian Tribal governments, as well as non-profit organizations and educational institutions. Additionally, these regulations may be applied to individuals. 40 CFR Part 47 applies to local education agencies, colleges, universities, State education or environmental agencies, not for profit organizations, or noncommercial educational broadcasting entities. 3.15 ------- EPA POLICIES • Performance-Based Assistance • Carryover of Unobligated Balances • Use of Disadvantaged Business Enterprises Imolemantation of the Common Rule • Recycled Paper VIEWGRAPH # 13 TITLE: EPA Policies KEY POINTS: • EPA’s performance-based assistance policy, issued May 31, 1985, establishes agency-wide procedures for negotiating and overseeing assistance agreements. It includes guidelines for: (1) assessing performance, (2) rewarding accomplishments, (3) correcting problems, and (4) imposing penalties. EPA’s policy on carryover of unobligated balances is covered in EPA Policy Statement No. 88-09 “Disposition of Unobligated Balances of Assistance Agreements.” Issued May 6, 1988, by the Office of the Comptroller with an effective date of June 30, 1988, this policy describes the cases in which the use of appropnated funds may be carried over to subsequent budget periods and the documentation and accounting methods this involves. Additionally, this policy statement discusses cases in which budgets may be decreased without carrying over appropriated funds. • Carryover of unobligated balances is authorized for both project type assistance agreements and Continuing Environmental programs in cases where the source appropriation has not expired. For project type assistance agreements, carryover may also be approved when the source appropriation has expired, if the scope of the work has not changed and the project period has not expired. • EPA’s requirements on the use of disadvantaged business enterprises (DBE) are contained in 40 CFR 33.240 (for universities and other nonprof its); 40 CFR 31.36(e) (for local governments and Indian tribes); and 40 CFR 35.6580 (for Superfund recipients); and in the Assistant Administrator’s February 15, 1991, DBE program plan. The plan sets forth how EPA will implement the 1991 Appropriations Act requirements which established an 8% objective for DBEs. 3.16 ------- VIEWGRAPH # 13 TITLE: EPAPolicies KEY POINTS: Continued GAD issued two memoranda concerning the implementation of 40 CFR Part 31 (the Common Rule). The first memorandum, with an effective date of October 1, 1988, explains that Part 31 applies to all grants and cooperative agreements whose budget or project periods began on or after October 1, 1988, and to all amendments to existing agreements whose scope of work started after October 1, 1988. The second memorandum, dated December 20, 1989, provides policy guidance in the areas of: - Pre-award costs - Federal share - Minimum match - Self-certification of procurements systems - Prior approval of equipment purchases - Special conditions for “high risk” recipients - Timeframe for liquidating obligations - Recipient’s acceptance of the award - Definition of “funding period” - EPA approval for subgrants - Use of Force Account - Prior approval of changes/transfers EPA’s policy on recycled paper is provided in EPA Order No: 1000.25 “Use of Recycled Paper.” Issued on January 24, 1990 and last amended on April 12, 1990, this order was developed to promote the use of recycled paper. Specifically, it requires new contracts and assistance agreements to specify that reports delivered to EPA in conjunction with EPA contracts or assistance agreements must be printed on recycled paper (whether or not such paper is more costly). 3.17 ------- SPECIAL PROVISIONS FOR INDIAN TRIBAL GOVERNMENTS • Minimum Roquirements For Estabiishlng “Treatment as States • Exomption from Certain Statutory Requirements, including Land Ownership Requirements • Exclusion from into • Muiti-Medla Grants .VIEWGRAPH # 14 TITLE: Special Provisions for Indian Tribal Governments KEY POINTS: With respect to EPA assistance, Indian Tribal governments are afforded treatment similar to that afforded to State governments. However, such treatment is conditional on Indian Tribal governments meeting the following criteria: - Federal recognition of the Indian Tribal government - Existence of a tribal governing body which oversees environmental and health concerns - Jurisdiction over the environmental site. • With respect to EPA programs, Indian Tribal governments are excluded from intergovernmental review requirements. • Additionally, federally recognized Indian tribes, tribal consortia, or existing organizations which represent groups of Indian tribes are eligible for multi-media grants. Multi-media grants are agreements which provide government funds for multiple purposes under one grant. EPA’s Multi-Media Program for Indian Tribes was established in FY91 and is funded for two years. Currently, legislation is pending that would provide an additional six years for this program. • Multi-media environmental program grants are provided for the purposes of: - Assessing a party’s capability to develop EPA’s categorical programs; - Demonstrating the Tribe’s capability to operate EPA environmental programs; and - Determining/prioritizing the Tribe’s environmental needs and addressing those needs through a multi-media approach. 3.18 ------- APPLICABI )F 40 CFR PARTS 30.31, 33. AND 35, SUBPART 0 TO E1’A ASSISTANCE AGREEMENTS AND RECIPIENTS GRANT AWARDED PRIOR TO IWI/$* FOR A PROJECT PERIOD BEGUN PRIOR TO IIIII (NO SUBSEQUENT CHANGE IN SCOPE OF WORK) GRANT AWARDED PRIOR TO iwiias FOR A PROJECT PERIOD BEGUN PRIOR TO IWI/SI (CIIAN(;E IN SCOPE OF WORK EFFECTLVE SINCE IIIIIRA) GRANT AWARDED ON OR AFTER 1 •/I /AR SUPERFUND CA UNIT OF STATE GOVERNMENT THAT ARE NOT A HOSPITAL OR INSTITUTiON OF HIGhER EDUCATION . 40 CFR PARTS 30 AND 33 40 0R PART 31 FOR WORK PERFORMED UNDER 11IE AMENDED SCOPE OF WORJ( 40 CFR PARTS 30 AND 33 FOR ALL aru wogic ‘ S 40 CFR PART 31 . . 40 CFR PART 35)Su bpar 0 (AFTER 1fZ7I 9) UNITS OF LOCAL GOVERNMENT ThAT ARE NOT A HOSPITAL OR INSTITUTiON OF HIGHER EDUCATION 0 40 CFR PARTS 30 AND 33 4OCPR PART 31 FOR WORK PERFORMJ D UNDER THE AMENDED SCOPE OF WORK • 40 CFR PARTS 30 AND 33 R)R ALL OilIER WORK 40 CFR PART 31 . : 40 0R PARTS 35. SUB. PART 0 (AFTER Ifzlrn9) . FEDERALLY.RECOGNIZED INDIAN TRIBES 40 CFR PARTS 30 AND 33 S 40 CFR PART 31 FOR WORK PERFORMED UNDERTHEAMENDEDSCOPEOFWORK. 4 OCFRPARTS3 OAND33FORALL (mIERwoRJc 40 CFR PART 31 . . 40O RPART35.SUBPARTO(AJq ER 1 127 / 89) NON.PROflT ORGANIZATIONS 40 CFR PARTS 30 AND 33 40 CFR PARTS 30 AND 33 40 CER PARTS 30 AND 33 • N/A INSTITUTIONS OF hIGHER EDUCATION 40 CFR PARTS 30 AND 33 40 CFR PARTS 30 AND 33 40 CFR PARTS 30 AND 33 0 N/A hOSPITALS, INCLUDING STATE AND LOCAL hOSPITALS 40 CER PARTS 30 AND 33 S 40 CFR PARTS 30 AND 33 40 CFR PARTS 30 AND 33 N/A S ------- (g EPA INFORMATION SYSTEMS MODULE IV ------- EPA INFORMATION SYSTEMS BY THE END OF THIS MODULE YOU WILL HAVE A GENERAL UNDERSTANDING OF THE FOLLOWING MANAGEMENT TOOLS USED BY EPA: • Grants information and Control System (GICS) • Automated Grants Document Systems (RAGDS & GADICS) • interagency Agreement Management System (IAMS) • Management Audit Tracking System (MATS) • Integrated Financial Management System (IFMS) • Comprehensive Environmental Response, CompensatIon, and LIabIlIty Information System (CERCLIS) VIEWGRAPH # 1 TITLE: EPA Information Systems KEY POINTS: • A number of EPA information systems contain data relevant to the phases of assistance administration. • This module provides an introduction to the computerized management tools most used by EPA grants personnel. Information is provided on the nature of each tool (whether it is a system or an appIication), its function, and a key Agency contact that may serve as a source of additional information. 4.1 ------- GRANTS INFORMATION AND CONTROL SYSTEM (GICS) • GICS is a National Database Stored and Managed on a Mainframe Computer. • GICS Contains information on all Interagency Agreements, Loan Arrangements, and Assistance Agreements entered into by EPA in all Program Areas (Construction and Non-Construction). • GICS Provides Reporting CapabilIties on All Data VIEWGRAPH # 2 TITLE: Grants Information and Control System (GIGS) KEY POINTS: • GIGS is a national information system providing tracking and reporting for all EPA financial assistance programs. 4.2 ------- GRANTS INFORMATION AND CONTROL SYSTEM (GICS) • GMOs enter Non-Construction Grant data Into GICS. GICS Coordinators (or Delegated States) enter Construction Grants data into GICS. • GICS Data are Organized by Grant Number and Retrieved Through General Query Procedures. • GICS Data for Construction Grants are Available to the States by Telecommunications Link.. • GICS currently does not interface with Other EPA information Systems. Contact: Donald Gamer Grants Administration Division FTS 260-9970 VIEWGRAPH # 3 TITLE: Grants Information and Control System (GICS) KEY POINTS: • GICS data is derived from input provided by Headquarters, regions, and states, depending on the program involved. Headquarters, regions, and states can also use GIGS to monitor assistance program activities. • GICS may be used to track quarterly progress reports and recipient adherence to terms and conditions. 4.3 ------- AUTOMATED GRANTS DOCUMENT SYSTEMS • Regional Automated Grants Document System (RAGDS) Is a Personal Computer (PC) Based Application that Allows Regional Grants Specialists to Download Data from GICS to a PC. • RAGDS uses the Data to Produce Non-Construction Award Documents. • Grants Automated Data and information Control System (GADICS) is a Similar System used to Produce Headquarters Assistance and Fellowship Awards. ‘‘ ‘‘‘ ‘ I i _______________________________________________________ Ill’’’’’ Contact: Gary Fonteyne Grants Administration Division FTS 260-1931 VIEWGRAPH # 4 TITLE: Automated Grants Document Systems KEY POINTS: • RAGDS is a program developed to generate award documents for other than WWT construction grants. • RAGDS uses data downloaded from GIGS and various PC software applications to produce the documents. 4.4 ------- VIEWGRAPH # 5 INTERAGENCY AGREEMENT MANAGEMENT SYSTEM (IAMS) IAMS is a PC Based Application Similar to RAGDS that Allows Headquarters and Regional Offices to Download Interagency Agreement (lAG) Data from GICS to a PC. IAMS Is used to Produce lAG Documents. Contact: Scott McMorsn Grants Administration Division FTS 260.4392 TITLE: Interagency Agreement Management System (IAMS) KEY POINTS: • IAMS is fully developed and we expect production very soon. • Like RAGDS, IAMS will download data from GICS. The data then will be used to generate lAG documents for Headquarters and regional offices. ‘liii’ 4.5 ------- MANAGEMENT AUDIT TRACKING SYSTEM (MATS) • MATS Is a PC-based system for managing and tracking the resolution and follow-up of audits. • MATS is also used to prepare the Agency’s semi-annual report to the Congress on audits. Contact: Joe Regan Resources Management Division FTS 260-6203 VIEWGRAPH# 6 TITLE: Management Audit Tracking System (MATS) KEY POINTS: • MATS was developed to implement the Inspector General Act Amendments of 1988. This act requires Federal agencies to track audit follow-up actions until all corrective actions are complete. The Act also requires agencies to report to Congress on audit resolution and the implementation of corrective actions. • In order to meet the requirements of the Inspector General Act Amendments and to administer MATS, EPA issued a new policy, dated December 22, 1989, to strengthen the Agency’s audit management capability. Among other things, the policy requires each Assistant Administrator to designate the director of their central management office, and each Regional Administrator to designate their Assistant Regional Administrator, as the Audit Management Official responsible for developing an office operating directive to manage the audit process and for designating an Audit Follow-up Coordinator. The Audit Follow-up Coordinator is responsible for the day-to -day, overall audit management, response, and resolution process. 4.6 ------- VIEWGRAPH # 7 INTEGRATED FINANCIAL MANAGEMENT SYSTEM (IFMS) • IFMS is EPA ’s Official System for Accounting and Financial Reporting. • IFMS Is an Information System Stored and Managed on a Mainframe Computer at Research Triangle Park, NC. TITLE: I nteg rated Financial Management System (I EMS) KEY POINTS: EPA’s Integrated Financial Management System (IFMS), implemented in 1990, is an information system used for accounting and financial reporting. It is both an on-line and batch system accessible at Headquarters and regional offices. 4.7 ------- INTEGRATED FINANCIAL MANAGEMENT SYSTEM (IFMS) • IFMS serves as EPA’s General Ledger. • Commitments and Obligations of EPA Funds must be Entered into IFMS to be Officially Recognized by the Agency. Contact: Vince Serb Office of the Comptroller, Financial Management Division, Financial Systems Branch FTS 260-5107 VIEWGRAPH # 8 TITLE: Integrated Financial Management System (IFMS) KEY POINTS: • IFMS data includes the finanàial information from numerous sources, such as grants, cooperative agreements, lAGs, procurement requests, invoices, and ti mecards. • When the GIGS and IFMS interface is complete, much of the financial data on EPA assistance awards will be available to GMOs and program offices. • IFMS provides budget information and has a budget execution capability. • Using IFMS, allowance holders enter commitments, servicing finance offices (SFOs) enter obligations and payments, and GMOs review Financial Status Reports (FSRs) and check grant balances. 4.8 ------- COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY INFORMATION SYSTEM (CERCLIS) • CERCUS is An Automated information System that Manages Databases Containing Information on Actual and Potential Hazardous Waste Sites and the Status of Cleanup Efforts. • Planning and Accomplishments Data for Events and Activities are Entered into CERCLIS. • CERCLIS Databases have been Designed to Accommodate Site and Non-Site-Specific Planning. Contact: Mike Culien OSWER, Office of Emergency and Remedial Respcnse Office of Program Management FTS 260-2131 VIEWGRAPH # 9 TITLE: Comprehensive Environmental Response, Compensation and Liability Information System (CERCLIS) KEY POINTS: • CERCLIS isa management database used to support national information needs on Supertund planning and progress, and other informational and administrative data needs. • CERCLIS contains an inventory of potential hazardous waste sites and it serves the regions as a vehicle for reporting on the status of major stages of cleanup (PA, SI, Rl/FS, RD, RA) at sites. 4.9 ------- ------- THE ASSISTANCE AGREEMENT: APPLICATION PHASE BY ThE END OF ThIS MODULE YOU WiLL BE ABLE TO: • Explain the Role of Grants Management Offices (GMO5) during Pro-Application Assistance • Explain the Role of GMOs upon Receipt of Formal Assistance Applications/Amendments • Identify the Basic Information Applicants must Provide in an Application • Indicate the Additional Superfund Program Requirements GMOs must Consider VIEWGRAPH#i TITLE: The Assistance Agreement: Application Phase KEY POINTS: • This module begins the discussion of the role played by Grants Management Offices (GMO) with respect to the administrative management of assistance agreements. • The role of GMOs begins with the assistance that you provide to prospective applicants as they develop their applications (pre-application assistance), and continues through the administrative evaluation of applications received, the coordination of technical evaluations provided by program personnel, the coordination or oversight of the various steps involved in making an award, and the administration and closeout of awards. • This module focuses on the role played by GMOs prior to award. Central to the role you play during the development of the agreement is the analysis and approval of the pre-application/application materials (which, upon approval, become part of the assistance agreement). At the end of this module, you will be familiar with these materials, and will be able to identify the basic information • applicants must provide in an application for assistance. • The information required in an application varies, ‘depending upon the type of assistance sought. This module describes general application requirements, and makes no attempt to cover the additional requirements under each program. However, additional consideration is given to application requirements under the Superfund program wherever these requirements differ from the requirements of most EPA assistance. The latter part pf this module examines some of the unique components of a Superfund Cooperative Agreement (Superfund CA) application and reviews the role played by the GMO and the recipient during its development. 5.1 ------- OVERVIEW OF THE APPLICATION PHASE GMO ReoeIv.s ApplIcation GMO Assign. en Assistance Id.ntification Number GMO Performs the Legal and Administrative Evaluations lb. Program Office Performs th. Programmatic Review VIEWGRAPH# 2 TITLE: Overview of the Application Phase KEY POINTS: • The application phase of assistance administration consists of four stages, as illustrated. • The goal of EPA is to complete the application evaluation and award processes, excluding pre-application review, within 90 days. However, EPA is required by statute to respond to final applications under the Superfund program within 90 days of receipt, and to assistance applications under the WWT Construction Grants program within 45 days of receipt (when the State has been delegated pre-award review authority). EPA regulations require recipients of Continuing Environmental Program grants to submit their applications no later than 60 days before the end of their current budget period. 5.2 ------- PREAPPLICATION ASSISTANCE • Available from EPA Headquarters, Regions, and State • Program Peisonnel • Informal or Formal Inquiry • EPA Response Within 45 Days of Receipt VIEWGRAPH #3 TITLE: Preapplication Assistance KEY POINTS: EPA offers potential applicants the opportunity to work with the Agency to develop a properly completed application that will ensure a timely award. Depending upon the assistance sought, EPA encourages applicants to seek preapplication assistance from EPA Headquarters, Regions, or State program personnel. Preapplication assistance can be obtained by submitting a formal inquiry on Standard Form 424 (SF-424), although a letter containing the same information may be substituted for the official form. Formal preapplications or informal written proposals, except unsolicited proposals (See Chapter 3 of the Assistance Administration Manual for information on unsolicited proposals), must be submitted to either GIAB or GOB for all Headquarters administered programs and to the appropriate GMO for all regionally administered programs. It is the responsibility of these offices to provide application kits, forms, instructions, and attachments relevant to the programs they administer. • Preapplication or negotiation sessions are often conducted by the EPA Project Officer and Grant Specialist to provide the applicant with basic information on preparation of the application, administrative and programmatic requirements, and other pertinent planning matters. • To allow sufficient time for thorough review, preapplication assistance should be sought by the applicant well before the target quarter for funding The appropriate timing depends on the type of assistance sought by the applicant. • Program-specific guidance may be distributed by the Agency at the time that applications are distributed to recipients. 5.3 ------- VIEWGRAPH # 3 (cont.) TITLE: Preapplication Assistance KEY POINTS: In the case of the Süperfund Program, the regional program office and GMO should work with the recipient to initiate preapplication assistance at least two quarters before the target quarter for funding. Since only sites, activities, or operable units listed on the SCAP (as discussed in Modules II and XIV) are eligible for funding, recipients and Regions should use the SCAP as a guide for timing the submittal of Cooperative Agreement preapplications. See Appendix A for a list of the basic contents of an application kit. 5.4 ------- EVALUATING AND PROCESSING THE APPLICATION • Date Stamp the Original Application • Assign an EPA Assistance Identification Number and Program Code and enter into GMO Tracking System/GICS • Enter Additional Application Information into GICS’ • Review for Statutory Eligibility • Forward Application for Program Evaluation VIEWGRAPH # 4 TITLE: Evaluating and Processing the Application KEY POINTS: • All original applications for Federal assistance must be received by the appropriate GMO (GIAB or GOB for all Headquarters administered programs, the appropriate GMO for all regionally administered programs, and delegated States for Construction Grant applications). • Assigning the EPA Assistance Identification Number is discussed on the following two viewgraphs. • The GMO is responsible for evaluating each application for statutory eligibility of the applicant and inclusion of all necessary documentation. Ineligible applications should be returned to the applicant. Eligible applications are subject to the initial actions noted on the above viewgraph. 5.5 ------- NUMBERING OF ASSISTANCE APPLICATIONS The GMO assigns the Assistance Identification Number to Applications VIEWGRAPH # 5 TITLE: Numbering of Assistance Applications KEY POINTS: • A unique Assistance Identification Number is assigned to each application for a grant or cooperative agreement, or unsolicited proposal. • The Grants Administration Division, Grants Operations Branch, assigns this number to all unsolicited proposals, and to each application (or pre-application) for EPA assistance programs administered by Headquarters. • The regional GMO assigns an Assistance Identification Number to each application (or pre-application) received for State and Local Assistance programs, other than WWT, and for any other assistance program for which award authority has been delegated to the Regional Administrator. • The appropriate State office will assign an Assistance Identification Number to each WWT construction project included in the State Project Priority List. Any Amendment Designator within the Assistance Identification Number will be assigned by the appropriate EPA regional office (or delegated State) for WWT construction projects. 5.6 ------- ASSISTANCE IDENTIFICATION NUMBER Program Code Serial Number Sequence Number Amendment Designator Al 000000 20 2 VIEWGRAPH# 6 TITLE: Assistance Identification Number KEY POINTS: The EPA Assistance Identification Number consists of eleven characters and uses both letters of the alphabet and numbers. Sequential identification of • these numbers is as follows: Program Code . A two-character alpha-numeric code identifies the assistance program. Serial Number . A six-position number identifies a specific assistance • application or agreement. Sequence Number . A two-position number identifies a fiscal year or budget period in all assistance programs other than Wastewater Treatment Construction and State Revolving Fund projects, where it identifies a specific project. Pre-Application/Am endment Designator . A one-position code identifies a specific formal amendment to an assistance agreement or amendment. Numerals wO 9M are used to indicate no amendments through the ninth amendment and the alpha codes “A- i’ are used to indicate the tenth through thirty-fifth amendment. An asterisk (*) identifies a pre-application. See the GICS Information Resources Directory (GIRD) for complete information on Financial Assistance Program Codes, Titles, and Catalog Numbers -- Appendix B is an excerpt from GIRD and provides some of this information. Updated GIRD directories are available from the Administrative Systems Division of the Office of Information Resources Management. 5.7 ------- THE OFFICIAL EPA ASSISTANCE FILE 0 FACIAL ASSISTANCE FILE C D .c 9 L .9 VIEWGRAPH # 7 TITLE: The Official EPA Assistance File KEY POINTS: Immediately after assigning an EPA Assistance Identification Number, the GMO is responsible for establishing the official administrative file. • The official administrative file is maintained by the GMO and is supported by the financial documentation maintained by the servicing finance office (SF0), and by the technical documentation maintained in the files of the program office and the EPA Project Officer. • The official administrative file contains information on EPA’s funding decisions (or decisions to reject funding), principal operating activities, and required reporting through project completion, closeout, and audit. • EPA may delegate responsibility for creating and maintaining the official administrative files of WWT construction grant activities, or portions thereof, to individual States under the Construction Management Assistance Program. • The GMO is responsible for identifying the contents and responsibilities (maintenance, close-out, retirement) for each of the official files. 5.8 ------- VIEWGRAPH # 7 (cont.) TITLE: The Official EPA Assistance File KEY POINTS: The sponsoring program office/EPA Project Officer establishes and maintains the official technical record of activities under supported assistance agreements. However, as with the administrative file, EPA may delegate this responsibility for WWT Construction Grant activities to individual States. The appropriate GMO will coordinate the assembly, packing, delivery, and storage of the technical and administrative records of assistance agreements at the time of closeout. • The SF0 establishes, maintains, and retires the official financial records of assistance agreements. A copy of Financial Status Reports and certain other financial documents also will be included in the SFO’s file. • ‘The official EPA financial assistance file may consist of paper (hard copy) records, or, when specifically authorized by the Agency Records Management Officer (Information Management and Services Division), a cOmbination of paper and microform records. • Grants specialists should refer to Chapter 5 of the Assistance Administration Manual for additional information on administrative files. Appendix C of this manual contains a list of the contents of the Official EPA Assistance File maintained by the GMO and Appendix D contains a list of the contents of the Official EPA Project File maintained by the Project Officer. 5.9 ------- THE APPLICATION FORM The “Application for Federal Assistance” (Standard Form 424) Consists of: • Face sheet SF424 • Budget Information • Assurances • Program Narrative Attachment VIEWGRAPH #8 TITLE: The Application Form KEY POINTS: It is the responsibility of the GMO to review the application to ensure that all information necessary to receive funding is present and correct. This process begins with an administrative review of the application for completeness. (Appendix E contains a Grants Management Application/Amendment Review Checklist, with program-specific addenda, that may prove useful in the development of a Region-specific checklist to be used by the regional GMO.) GMOs need a thorough working knowledge of the application form and all attachments in order to assist the applicant in preparing the application package and to review the applicant’s submission. Even if an application has already been through a preapplication evaluation, it still may be necessary for the GMO and program staff to work with the applicant to revise the application further before it is accepted for a complete, formal review. • The application form is Standard Form 424. The SF-424 is designed so that application can be made for funds relating to all EPA programs. Because of its general applicability, not all areas of the form apply to all programs. A discussion of each part of the application form, as well as the most commonly required attachments follows. 5.10 ------- FACESHEET GENERAL SUMMARY INFORMATION EA24 Facesheet: • Provides General Information • General About Applicant Information • Provides Summary Information • I oj on the Proposed Project Summary VIEWGRAPH # 9 TITLE: Facesheet General Summary Information KEY POINTS: • The facesheet of the SF-424 provides general administrative information about the applicant and the proposed project. • Grants specialists should review the SF-424 facesheet to ensure that all items have been properly completed. Certain information need not be entered on the facesheet if the submission is an amendment, since this information is induded on the original application. • If the award of assistance involves verification of the recipient having met the required level of effort under a previous award (as with assistance provided under Section 105 of the Clean Air Act and Sections 106 and 205(g) of the Clean Water Act), the most recent Financial Status Report and supporting documentation must be carefully reviewed to ensure that the requirement is met. 5.11 ------- BUDGET INFORMATION SF 424-A Identifies Total Project Costs: _____________ • Section A - BUdget Summary • Section B - Budget by Object or 424A Class Category • Section C - Non-Federal Resources Budget • Section D - Forecasted Cash Needs Information • Section E - Budget Estimates of Federal Funds Needed for Balance $$ of Project • Section F - Other Budget Informa- tion VIEWGRAPH# 10 TITLE: Budget Information KEY POINTS: The SF-424A - Budget Information is used to indicate total funding needs and summary information for proposed projects, (in the case of Superfund, proposed sites, activities, or operable units). • Sections A, B, C, and 0 should include budget estimates for the whole project except when applying for assistance which requires Federal authorization in annual or other funding period increments. In the latter case, Sections A; B, C, and D should provide the budget for the first budget period (usually one year) and Section E should present the need for Federal assistance in the subsequent budget periods. The SF-424A contains additional detailed instructions for its use. • The applicant is responsible for preparing the project budget. Sources of information used in developing the project budget will vary depending on the type of project. • It is the Region’s responsibility to ensure that budget information is complete, technically sound, and consistent with Federal statutes, regulations, and policies. The program office is responsible for reviewing a proposed budget against the statement of work and for determining programmatic eligibility. • The GMO, together with the program office, is also responsible for an evaluation of proposed budgets. Specifically, the GMO is responsible for performing a review of the budget to ensure that costs are allowable (i.e., based upon the required cost or price analysis consistent with the cost principles discussed in Module Ill), allocable (i.e., relevant to the project to be funded) and reasonable (i.e consistent with costs covered under other agreements funding similar work under similar circumstances). The GMO should also verify the current indirect cost rate and perform an arithmetic review of the budget. This includes checking all computations for accuracy. 5.12 ------- VIEWGRAPH # 10 (cont.) TITLE: Budget Information KEY POINTS: • Section A - Budget Information providesfor a budget summary. With an application for a Superfund CA, this information must be provided for each site, activity, or operable unit (if applicable), to be funded. • Section B - Budget Categories identifies budget amounts by object class categories. With an application for a Superfund CA,. this information must be provided for each site, activity, or operable unit identified in Section A. Object class categories include: personnel, fringe benefits, travel, equipment, supplies, contractual, construction, indirect costs, and other. Usually this page is supplemented by additional budget breakdowns. • As an attachment to Section B, the applicant must include separate sheets to provide sufficient documentation supporting the total cost of each object class category entry. This is important because this documentation is the basis upon which the GMO can perform an analysis to determine how the applicant established the budget, and whether each cost listed is reasonable, allowable, eligible and allocable. This documentation also allows the program office to determine program eligibility. (See Appendix I for a guide for preparing budget detail and an example.) • For personnel, it is important for the applicant to identify all staff positions by title, annual salary, and the percentage of time that each position will be assigned to the grant program or Superfund site, activity, and operable unit. • For travel, the applicant should indicate the number of trips planned, expected mileage, airfare, per diem, and other costs for each type of travel, as well as the purpose of the travel. • For equipment, each item needs to be identified and its associated cost • indicated. This is’important, because once an assistance agreement is accepted, even if specific items were not reviewed and evaluated, they are considered approved. (Equipment is discussed further in Module X). • For indirect costs, a copy of the current indirect cost rate agreement approved by the cognizant agency should be included as an attachment to the application, or should be on file in the Grants Management Office. • Section C - Non-Federal Resources should be completed to list funding sources and amounts other than those provided by EPA or other Federal • agencies. In cost share situations, the applicant must enter information into this section. Section D - Forecasted Cash Needs is not mandatory for the application. If completed, this section shows the estimated level of expenditures over the fiscal year. • • Section E - Budget Estimates of Federal Funds Needed for Balance of the Project provides useful information to project funds necessary for future years. This does not have to be completed in order for funding to be awarded for a Superfund CA. 5.13 ------- VIEWGRAPH # 10 (cont.) TITLE: Budget Information KEY POINTS: Section F - Other Budget Information is used to list and explain specific direct and indirect charges that appear in Section B. Space is also provided within this form for remarks to allow the applicant to clarify other parts or sections of the application. For an application for Superfund assistance, Section F is the section where a State can annotate information concerning its use of credit to meet its cost share responsibilities. Final determination will be made by the EPA Award Official (This is discussed in further detail in Module VI.) 5.14 ------- ASSURANCES ________________ Standard Form 424-B Does the Following: E424..B • Outlines Applicable Federal Laws for Applicants • Applicable laws • Assures EPA of an Applicant’s Compliance with Applicable Federal Requirements • Assurance of compliance VIEWGRAPH # 11 TITLE: Assurances KEY POINTS: • The purpose of the assurances in SF 424-B is to outline for applicants the Federal !aws and statutes imposed on all Federally assisted projects. These assurances are the assurances CERCLA requires of States under the Superfund program. • The inclusion of these pages in the applicant package indicates the applicant’s willingness to adhere to these requirements. • The applicant must sign the second page in the signature box in order for the application to be complete. The signature on the 424-B must be the same as that on the facesheet of the SF-424. 5.15 ------- PROJECT NARRATIVE PROJECT NARRA11VE I. Hiatoty • Describes the History of the Problem, and Proposed Actions Indicates Compliance with H. Statement of Work Regulatory Requirements Task I Task 2 -‘ TaskS Task 4 VIEWGRAPH # 12 TITLE: Project Narrative KEY POINTS: The statutes authorizing some programs require an applicant to submit a plan before receiving assistance. For most applications, the plan will take the form of a project proposal or narrative, which includes objectives, strategies, and expected results; required financial, facility, equipment, and manpower resources; and such technical and other information as required in 40 CFR 31.11 and other program-specific regulations. The project proposal must be included as part of the application in order for the application to be funded. • The EPA program staff performs a technical review of the proposal. When the technical review requires specific qualifications not available in the program office, the GMO must obtain assistance from other EPA staff with expertise in the particular subject area. • In an application for a Superfund CA, the project proposal is referred to as the project narrative, which comprises a Statement of Work (SOW) and additional attachments. The SOW consists of a brief explanation of the problem(s), a description of the history of the site or sites, and data on proposed response activities. • When the Superfund CA covers work at more than one site, a separate SOW must be submitted for each site-specific project to be undertaken. A SOW for overall management and coordination activities should be completed as well. For each activity/subactivity, the SOW should include a description of necessary subactivities/tasks with estimated start and completion milestones. Where appropriate, the SOW should also contain cost estimates for each subactivity and task. 5.16 ------- THE APPLICATION PACKAGE Standard Application Form ( SF 424) + + I Budget Detail + I Project Narrative Additional Supertund Requirements VIEWGRAPH# 13 TITLE: The Application Package KEY POINTS: Intergovemmental Review Sign-off I I GovernorlAttorney General Letter I I Procurement System Certification. If applicable Certification Regarding Debarment and Suspension l Cunent Approved indirect Co.t Rate Agreement I Drug-Free Workplace Certification I I Antl.Lobbylng Certification I I Quality Assurance Project Plan, If appilcable I Health and Safety Plan I I Communfty Relations Plan I Enforcement Letter I This viewgraph illustrates the key components of an application package. The standard attachments required by all EPA assistance applications will be discussed in the next several viewgraphs; however, grants specialists should be aware that the list of required attachments varies from program to program, as is indicated by the reference to the Superfund program. A treatment of certain additional attachments important to the Superfund program follows the discussion of the standard attachments common to all EPA assistance applications. 5.17 ------- GOVERNOR/ATrORNEY GENERAL LETTER OFFICE OF ThE GOVERNOR The Certification Letter Dear Indicates That a State __________ Has The Authority to Enter into an This Ioft.r authoifres thai Agreement with EPA Sinosiely, Governor of (si) VIEWGRAPH# 14 TITLE: Governor/Attorney General Letter KEY POINTS: The certification lefter indicates that the State has the official authority from its highest governing offices to enter into an agreement with EPA. This document should also indicate that the State has the authority to make any statutory assurances that are necessary to complete the project. • For Superfund GAs, the State certification letter may be a generic statement covering all sites within a State, or it may be site-specific. 5.18 ------- INTERGOVERNMENTAL REVIEW VIEWGRAPH *15 TITLE: Intergovernmental Review KEY POINTS: • The intent of the intergovernmental review is to increase the responsiveness of EPA to State and local entities, and to identify potential duplication of effort and/or lack of coordination with State and EPA projects conducted in a State. The process allows all officials directly affected by a proposed activity to comment on that activity. • Though States are not required to do so, they are encouraged to develop an intergovernmental review process. Under Executive Order 12372, if the application is subject to the State’s official review process, applications for Federally funded projects must undergo intergovernmental review before EPA will obligate funds. This procedure applies to most EPA programs and should include the following: - Establishing a single point of contact - Delegating review responsibilities to specific State, regional, and local authorities - Developing procedures to manage and coordinate the review in order to present State recommendations to EPA that indicate consensus and dissension - Developing means of consulting with other State and local entities - Establishing means of notifying other applicants for Federal assistance about the State review process. Moat Applications for Federal Assistance Are Subject to Review and Comment From State and Local Entitles 5.19 ------- VIEWGRAPH # 15 (cont.) TITLE: Intergovernmental Review KEY POINTS: • EPA will not award assistance until it has received evidence of intergovernmental review, or the comment period ends and comments were not received. The comment period for a new project is 60 days and is 30 days for a continuation unless EPA has waived or shortened it. • EPA regulation 40 CFR Part 29 interprets the Executive Order and establishes the Agency’s guidelines and policies for intergovernmental review of applications for EPA assistance. This regulation indicates methods EPA will use to implement Executive Order 12372 by fostering collaboration with the States. • With respect to Superfund, if the response is a State-lead, the State forwards the information concerning the planned Superfund CA to the single point of contact. If the response is an EPA-lead, the Region has this responsibility. Whether the project is an EPA- or State-lead, the State has the right to maintain its own review procedures. • If the State does not have a designated single point of contact or State process established, the applicant must comply with Section 204 of the Demonstration Cities and Metropolitan Development Act of 1966, as amended. Section 204 requires applicants for federally funded projects in metropolitan areas to give area-wide agencies 60 days to review and comment on a proposed application. To do this, the applicant must send a copy of its application to the area-wide metropolitan, regional or local planning agency designated to perform planning for the geographical location of the proposed project and allow the agency 60 days for review and comment. • Indian Tribes are not required to conduct intergovernmental reviews. 5.20 ------- PROCUREMENT SYSTEM CERTIFICATION Procurement Certification Provides rA F’i.,rim the Following: 5700-48 • Certification that an Applicant’s Procurement System Meets EPA Requirements • Assurance for EPA that an Applicant will Follow EPA Procurement Regulations, if Its System Is not Certified VIEWGRAPH#16 TITLE: Procurement System Certification KEY POINTS: • EPA Form 5700-48 applies to state and local governments, Indian Tribes, universities and non-profit organizations. • In order to conduct procurement activities under an EPA-funded program, the recipient either must have an internal procurement system that meets the intent of EPA’s regulation 40 CFR Part 33 entitled “Procurement Under Assistance Agreements,” or must follow the uniform regulation, 40 CFR Part 31, when it conducts procurements. For Superfund activities, procurement is subject to regulation under 40 CFR Part 35, Subpart 0. • The procurement certification form documents whether the applicant’s procurement system meets EPA requirements and is therefore certified. If the applicant does not certify its system or meet certification requirements, it is required to follow 40 CFR Part 31, and allow EPA to conduct pre-award reviews of proposed subagreements with any contractors employed by the applicant to conduct activities under the award. However, recipients of Superfund assistance must follow 40 CFR Part 35, Subpart 0. Recipients of Superfund Technical Assistance Grants (TAG), institutions of higher learning, and non-profit organizations must follow 40 CFR Part 33. (Module IX provides a detailed discussion of procurement requirements.) • A completed, signed copy of the Procurement Certification Form must accompany each application for EPA assistance. The certification is valid for the length of the project period specified in the assistance agreement, or for two years, whichever is greater, unless the applicant substantially revises its procurement system. • If an applicant is certifying its procurement system for the first time, Part B should be completed. If the applicant has previously submitted this form, Part A should be completed. 5.21 ------- CERTIFICATION REGARDING DEBARMENT AND SUSPENSION Assistance Applicants (and Their Contractors) Must Certify That They are not Debarred or Suspended. VIEWGRAPH# 17 TITLE: Certification Regarding Debarment and Suspension KEY POINTS: • Debarment and suspension are periods of exclusion from participating in Federal assistance or contracting programs. • Debarments generally do not exceed three years; however, a longer period of debarment may be imposed if circumstances so warrant. Debarment procedures include an investigation, notice to the respondent, an opportunity to be heard and finally, a written decision by the Agency’s decision official imposing the debarment. • Suspension is an immediate temporary action taken to protect the Federal • government and/or public interest pending the completion of an investigation or ensuing legal or debarment proceedings. • Suspended and debarred entities are listed in the General Services Administration’s publication entitled “Lists of Parties Excluded From Federal Procurement or Nonprocurement Programs”. 5.22 ------- VIEWGRAPH # 17 (cont.) TITLE: Certification Regarding Debarment and Suspension KEY POINTS: Prior to the award of any Federal assistance, the applicant must certify to the EPA that it and all its principals: - Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency; - Have not within three years been áonvicted of or had a civil judgment against them for commission of fraud or a criminal offense in connection with obtaining or performing a public transaction, violation of antitrust statutes, embezzlement, theft, forgery, false statements, etc. - Are not presently indicted or criminally or civilly charged by a government entity with violating any of the offenses listed above. - Have not, within three years, had one or more public transactions terminated for cause or default. A written explanation must be attached if the applicant cannot certify. • For more information, GMOs should consult 40 CFR Part 32, Debarment and Suspension under EPA Assistance Loan and Benefits Program. 5.23 ------- REQUIREMENTS OF DRUG-FREE WORKPLACE ACT OF 1988 Federal Grants and Contracts Require Drug-Free Work Place Certification. REQUIRES VIEWGRAPH# 18 TITLE: Requirements of Drug-Free Workplace Act of 1988 KEY POINTS: • The Drug-Free Workplace Act of 1988 requires contractors and grantees of Federal agencies to certify prior to award that they will provide a drug-free workplace. This certification is a condition of all Federal grants and contracts, regardless of value. • To comply with this Act, potential grantees or contractors must: - Publish astatement notifying employees that drug abuse in the workplace is prohibited - Establish a drug-free awareness program - Require employee notification of criminal drug statute convictions occurring in the workplace and report them to EPA - Establish sanctions or other measures for employees convicted of drug abuse violations in the workplace - Continue ongoing compliance with all requirements of the Act. • False certification, violations of the certification, or failure to make a good faith effort to provide a drug-free workplace program may result in suspension of payments, termination of the contract or grant for default, and debarment and suspension of the contractor or grantee. Federal Grant or Contract 5.24 ------- CERTIFICATION REGARDING LOBBYING VIEWGRAPH# 19 TITLE: Certification Regarding Lobbying KEY POINTS: Pursuant to 40 CFR Part 34, Appendix A, applicants for Federal assistance must certify that no appropriated funds will be expended to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress, in connection with any Federal award in excess of $100,000, in accordance with section 319 of Public Law 101-121. Applicants must follow the requirements in the Interim Final Rule entitled, “New Restrictions on Lobbying” published on February 26, 1990. 5.25 ------- QUALITY ASSURANCE PROJECT PLAN (QAPP) Recipients are Required to Develop a OAPP. • A QAPP Outlines Procedures for Ensuring Quaiit # in Environmental Monitoring • The Application Must include Either a QAPP or a Schedule for its Development • A QAPP Must be Approved Before On-site Sampling Can Begin VIEWGRAPH 20 TITLE: Quality Assurance Project Plan (QAPP) KEY POINTS: Under EPA’s environmental programs, an assistance recipient is required to develop a Quality Assurance Project Plan (QAPP) to describe the measurement systems it intends to use. According to applicable regulations, either an actual QAPP (generic or site-specific) or a schedule for developing one must be attached to the application. • In all environmental sampling and/or analysis, a QAPP must be developed in accordance with the intent of 40 CFR 30.503 (which serves as the Agency’s common rule for quality assurance) and “Guidelines & Specifications for Preparing Project Plans” (QAMS-005/80),” and must be acceptable to the award official. A QAPP submitted by a State or local government applicant must address the following areas (See 40 CFR 30 for details on other applicants): - Name of principal investigator(s) and quality assurance officer - Background, purpose, and scope of the quality assurance plan - Quality assurance policy statement - Quality assurance management plan - Personnel qualifications - Facilities, equipment, and services - Data generation and general quality assurance requirements - Data processing, e.g., reduction, validation, reporting - Data quality assessment • - Corrective action for out-of-control situations - Development of individual QAPPs and standard operating procedures, if required in the project plan. - Implementation requirements and schedule. 5.26 ------- ENFORCEMENT LETTER (SUPERFUND OR LUST) OFFICE OF ThE GOVERNOR Dear __________ The Enforcement Letter Ensures That the State has ibia leltsr authortze. that Adequate Enforcement _____________________________ Authorities and Is __________________________ Committed to Pursuing ____________________________ Effective Enforcement Sincerely, Governor of ____ (of) VIEWGRAPH# 21 TITLE: Enforcement Letter (Superfund or Lust) KEY POINTS: • The certification letter indicates that the State has the official authority from its highest governing offices to enter into an agreement with EPA. This document should also indicate that the State has the authority to make any statutory assurances that are necessary to complete the project. • For Superfund GAs, the State certification letter may be a generic statement covering all sites within a State, or it may be site-specific. • For enforcement activities under the Superfund Program or the LUST Program, an enforcement letter is required in order to indicate that the State’s enforcement authorities are adequate, and that the State is committed to pursuing effective enforcement actions. ) 5.27 ------- SUPERFUND. COMMUNITY RELATIONS PLAN (CRP) Local Site Slated for Cleanup VIEWGRAPH # 22 The CRP Outlines Community Relations Activities During a Superfund Re- sponse. The Following Requirements Apply: • Specific Plans for Informing the Community and Preparing a CRP Must be in the Superfund CA Application Package • The Recipient Must Assure EPA that the CRP will be In Place Before Work Begins TITLE: Superfund Community Relations Plan (CRP) KEY POINTS: • The community relations plan (CRP) is a management and planning tool outlining the specific community relations activities to be undertaken during the course of Superfund response activity. It is designed to provide for two-way communication between the affected community, and the agencies responsible for conducting the response activity. • CERCLA and the NCP require the Superfund program to perform the “functional equivalent” of the requirement of the National Environmental Policy Act of 1969 (NE PA), which requires Federal agencies to incorporate environmental factors into their decisions. To comply with this policy, EPA must assess its actions in terms of their effects on the environment, and public opinion on proposed response activities. A SOW to prepare plans for informing the community and receiving feedback, or a work plan for developing a CAP mustbe included in the Superfund CA application package. The State must assure EPA that the CRP will be in place before any field work begins. 5.28 ------- SUPERFUND HEALTH AND SAFETY PLAN • Applications for Certain Types of Assistance Must Include a Safety Plan or Specific Plans for its Development • This Plan Provides for Protection of On-Site Personnel and Area Residents VIEWGRAPH# 23 TITLE: Superfund Health and Safety Plan KEY POINTS: • A health and safety plan is a required part of the application package for • several EPA programs. This plan may either be prepared by State personnel or may be included in the SOW as part of the project undertaken by a State contractor. • When submitted as part of an application for Superfund assistance, the program office will ensure that the Safety plan is consistent with the following: - CERCLA sections 104(f) and 111 (c)(6) - Occupational Safety and Health Administration (OSHA) 29 CFR 191 0.120 • - State safety and health statutes - Site-Specific Conditions. • A safety plan must be included in all contracts awarded under a Superfund CA, and must be tailored to meet conditions at a particular site. The safety plan must be attached to the Superfurid CA, or plans fOr developing one must be included in the SOW. The recipient must ensure that the safety plan is in place before work is started. 5.29 ------- VIEWGRAPH # 24 APPLICATIONS INVOLVING INTERNATIONAL ACTIVITY TITLE: Applications Involving International Activity KEY POINTS: Regional grants staff must forward one copy of the following applications to the Assistant Administrator for International Activities at Headquarters for clearance: - Applications involving support for international meetings, conferences, symposiums, etc.; - Applications involving international travel conducted under domestic assistance; and - Applications for projects that will be conducted in other countries. 5.30 ------- OVERVIEW OF PROGRAMMATIC APPROVAL VIEWGRAPH# 25 TITLE: Overview of Programmatic Approval KEY POINTS: • This illustration depicts potential paths an application may take during the award process. • After the program office has performed the programmatic review, the program recommends approval, deferral, or non-approval. • A proposal may be rejected if: (1) its mission is not consistent with that of the assistance program to which it was submitted, or (2) the recipient’s ability to accomplish the proposed mission is questionable. Despite meeting programmatic and technical requirements, a proposal may be deferred in the event program funds are unavailable. • If the proposal is deferred or rejected, the program office must notify the applicant and the GMO. Once notified, the GMO will file the deferral or rejection recommendation in the official administrative file. • If the proposal is approved, the program office will prepare and forward a funding recommendation package to the appropriate GMO. 5.31 ------- VIEWGRAPH # 26 DEVELOPING A SUPERFUND SUPERFUND STATE CONTRACT (SSC) • EPA-lead Remedial Action • Political Subdivision-lead Activity TITLE: Developing a Supertund State Contract (SSC) KEY POINTS: • The GMO must ensure that a Superfund State Contract (SSC) is in place before EPA transfers funds for an EPA-lead remedial action. • The GMO must also ensure that a Three-Party SSC is in place before a political subdivision-lead remedial action Supertund CA is awarded, regardless of the phase of activity covered by the Superfund CA. 5.32 ------- THE ASSISTANCE AGREEMENT: AWARD PHASE MODULE VI ------- THE ASSISTANCE AGREEMENT: AWARD PHASE BY THE END OF THIS MODULE YOU WILL BE ABLE TO: • Discuss the ResponsibIlItIes of the Grants Management Office, the Program Office and the Servicing Finance Office During the Award Process • Understand the Difference Between the Program Approval and the Award Decision • Discuss the Preparation of the Funding Recommendation and the Assistance Agreement • Describe the Process for Notification of Award Actions VIEWGRAPH # 1 TITLE: The Assistance Agreement: Award Phase KEY POINTS:’ • This module discusses the’award stage of funding an application. • The award stage consists of making the program and award decisions, preparing the funding recommendation and the assistance agreement, notifying the Congressional designee and the recipient, and executing the assistance agreement. • The program and award decisions involve different ‘EPA officials and considerations and occur at different stages of the award phase. These distinctions will be discussed in subsequent viewgraphs. • During the award phase, the program office and the grants management office (GMO) must prepare various documents. These documents include the funding recommendation and the assistance agreement, as well as other secondary documents. ‘ • The process for notification of award actions includes notification of Congressional members, and distribution to the various EPA offices and the recipient. 6.1 ------- VIEWGRAPH # 2 OVERVIEW OF THE AWARD PHASE TITLE: Overview of the Award Phase KEY POINTS: The award phase of assistance illustrated. administration consists of seven stages, as • Under the direction of the Approval Official, the program office is responsible for the programmatic review and approval of an assistance application. • Once the Approval Official issues programmatic approval, the program office must obtain funding approval from the servicing finance office (SF0). The SF0 is responsib!e for committing, recording, and obligating funds using EPA’s Integrated Financial Management System (IFMS). As a result of the Gramm-Rudman-Hollings legislation, stricter funds control procedures have been adopted by EPA. These procedures now include a prevalidation of funds. Prevalidation involves verifying commitments against data in IFMS. Grants specialists must obtain this verification before forwarding the award document to the Award Official. • After receiving the funding approval, the program office prepares and forwards its recommendation to the GMO. • The GMO then drafts the assistance agreement and forwards it to the Award Official to be executed. • Once the assistance agreement has been signed, the GMO informs the Congressional Affairs Office, which is responsible for noti ing the appropriate House and Senate members. • Once the 5 day period has passed, the GMO may notify the applicant. The GMO noiffies the — O c. 6.2 ------- VIEWGRAPH # 3 PREPARATION OF THE ASSISTANCE AGREEMENT • Review Official Administrative File For Completeness • Record Appropriate Information in GICS • Prepare Assistance Agreement TITLE: Preparation of the Assistance Agreement KEY POINTS: • Once the GMO receives the funding recommendation from the program office, it must perform certain activities related to preparing the assistance agreement. • The GMO must review the official assistance file for completeness, ensuring that all relevant documents are in the file, all analyses are complete, and all issues, including those related to cost analysis, intergovernmental review, etc., are resolved. The GMO must, also ensure that all necessary signatures are present on the various documents and verify the availability of funds. • The GMO must also enter all appropriate information in GICS and prepare the assistance agreement using the Regional Automated Grants Document System (RAGDS). 6.3 ------- COMPONENTS OF THE AWARD. •4\J Assistance Application Assistance Agreement Applicable Regulations VIEWGRAPH # 4 TITLE: Components of the Award KEY POINTS: • The award includes the following: (1) EPA Assistance Application (by reference) (2) EPA Assistance Agreement (EPA Form 5700-20/20A), including any Terms and Conditions (3) EPA regulations (by reference) • After receiving the award, the applicant or his/her designee has three calendar weeks to sign and return the assistance agreement to the GMO. Failure to do so may result in cancellation of the award offer. 6.4 ------- EXECUTION OF THE ASSISTANCEAG REEMENT Award Official Signs Agreement Appropriate _____ Notifications are Made Agreement is ____ issued to ‘ Recipient Recipient _____ Signs Agreement I Ecountersigned Agreement is — Returned to EPA VIEWGRAPH # 5 TITLE: Execution of the Assistance Agreement KEY POINTS: • Executing an agreement involves obtaining signatures from all parties to the agreement. This illustration describes the primary steps involved in fully executing an assistance agreement. • When the Award Official signs the assistance agreement, EPA assumes its share of the legal obligation, and incurs a fiscal obligation as well. At this time, the GMO must enter the award data in GICS. Once a recipient signs an agreement, they assume a legal obligation. • Next, GAD extracts the necessary Congressional Notification information from GICS and forwards it to the Office of Congressional Liaison (OCL) and to other concerned offices. • The OCL notifies the appropriate Congressional representative or designee at the U.S. Capitol. • Unless the Congressional representative or designee objects, once the five-day Congressional notification requirement is met, the GMO sends the award to the recipient. • In emergencies, the five-day hold (workdays) for Congressional notification may be waived pursuant to OCL procedures. S • Congressional notification is not necessary when a decrease in funding is involved. 6.5 ------- VIEWGRAPH # 6 PREPARATION OF THE FUNDING RECOMMENDATION TITLE: Preparation of the Funding Recommendation KEY POINTS: Generally, the Program Office prepares and forwards to the GMO the funding recommendation, which consists of the following primary documents: (1) the Funding Order (EPA Form 5700-14) optional for regional GMOs, (2) the Commitment Notice (EPA Form 2550-9), and (3) the decision documentation. • The Funding Order identifies ihe proposed and approved funding amounts. Also included in the Funding Order is the name of the assigned Project Officer. It is signed by the Approval Official, who is also responsible for attaching special payment or reimbursement requirements. • The Commitment Notice is used to reserve funds. • The decision documentation summarizes the review, recommends a course of action, and includes any conditions from the program. FUNDING RECOMMENDATiON (1) Assistance Funding Order (EPA Form 5700.14) (2) CommItment Notic. (EPA Form 2550-9) (3) DecIsion Documentation Including Decision Memorandum (if applicable) 6.6 ------- • TERMS & CONDITIONS OF THE ASSISTANCE AGREEMENT • Terms and Conditions • Special Conditions VIEWGRAPH # 7 TITLE: Terms & Conditions of the Assistance Agreement KEY POINTS: • In order to prepare the assistance’ agreement properly, it is important to understand the difference between terms and conditions and special conditions. • Each recipient is subject to certain terms and conditions. These include all applicable provisions of Title 40 of the Code of Federal Regulations as well as other pertinent laws and regulations. • Regarding GAs, information assunng substantial project involvement by EPA must be included either under the terms and conditions section of the assistance agreement or, with EPA approval, solely within the application for the cooperative agreement. • In some cases, recipients are determined to be “high risk” recipients and subject to “special conditions.”’ • A recipient may be considered high nsk if it: (1) has a history of unsatisfactory performance, or (2) is not financially stable, or (3) has a management system which does not meet the management standards set forth in 40 CFR Part 31; or (4) has not conformed to the terms and conditions of a previous award, or (5) is otherwise considered “not responsible.” • For high risk recipients, the following special conditions may be included in the assistance agreement: (1) payment on a reimbursement basis;. (2) withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period; (3) requiring the recipient to obtain more detailed financial reports; (4) additional project monitoring; (5) requiring the recipient to obtain technical or management assistance; or (6) establishing additional prior approvals. 6.7 ------- AMENDMENTS TO THE ASSISTANCE AGREEMENT • increases In Funding • Decreases In Funding • Transfer of Funds VIEWGRAPH # 8 TITLE: Amendments to the Assistance Agreement KEY POINTS: • Whenever the funding needs of a project change, the recipient must prepare and submit a new budget and an amendment application to the assistance agreement. Procedures for revising the project budget will depend on whether funds are being increased, decreased, or transferred between budget periods. • For increases in funding, the recipient must: (1) inform the EPA Project Officer, and (2) send the Project Officer a detailed justification or amendment application. If the Project Officer rejects the applibation, he/she must notify the recipient and forward a copy of the notification to the appropriate GMO. If the Project Officer approves the application, he/she must send relevant documentation to the Approval Official. This documentation includes: (1) a Recommendation Memorandum, (2) a Commitment Notice, and (3) a Funding Order if used in your Region. If the Approval Official concurs with the Project Officers recommendation, he/she must send these doôuments along with the amendment application to the GMO. The award process for funding increase amendments is similar to that of new agreements. (Note: usage of the Commitment Notice varies from one Region to another. Commitment and usage of funds may be approved directly on the award document, which is signed by the GMO and the Project Officer, and assigned a DCN by the SF0. • For decreases in funding, the recipient must: (1) inform the EPA Project Officer, and (2) send him/her a summary discussing how project objectives will continue to be met with fewer funds. Approval of funding decreases follows a course similar to that of funding increases. 6.8 ------- VIEWGRAPH # 8 (cont..) TITLE: Amendments to the Assistance Agreement KEY POINTS: • •When unobligated balances exist, funds may be transferred to a subsequent budget period of the same grant, either as an increase or as an offset, if they meet the requirements of the carryover policy. If the funds are not to be used on the same grant and are still available (i.e. not expired) the Regional Comptroller must de-obligate the funds and request that the HQ Comptroller return these funds to the Region for reobligation to another grant (through a “Carryover Advice of Allowance”). Carryover of expired funds is not allowed. 6.9 ------- ------- ADMINISTRATION OF ASSISTANCE AGREEMENTS BY ThE END OF THIS MODULE YOU WILL BE ABLE TO: • Describe the General Responsibilities of EPA Grants Management Offices (GMOs) during Assistance Administration • Understand Cost Sharing/Matching under Assistance Agreements, Recipient Payment Procedures, and the Criteria used In the Judgement of Allowable Costs • Identify What Types of Administrative Changes Require Formal Amendments and What Types Do Not • Know the Responsibilities and Procedures for Disputes Resolution and Appeals • Know the Responsibilities and Procedures for Obtaining Deviations • Identify the Procedures for Monitoring Recipient Performance and for Dealing with Recipient Noncompliance VIEWGRAPH # 1 TITLE: Administration of Assistance Agreements KEY POINTS: In addition to its responsibilities during the application and award phases, the GMO has many responsibilities once assistance has been awarded. • This module is the first of four modules which discuss the general responsibilities of EPA grants management offices (GMOs), as distinct from those of program offices and Financial Management fOffices (FMO5) during project administration. • Generally, the GMO serves as a source of administrative oversight for all EPA assistance agreements. However, the GMO also serves as the liaison between the region’s Project Officer and FMO, and the recipient’s project manager and administrative staff with regard to the administrative aspects of assistance. 7.1 ------- RECEIPT OF ‘RECIPIENT REPORTS VIEWGRAPH # 2 TITLE: Receipt of Recipient Reports KEY POINTS: A recipient of EPA assistance must submit numerous reports to EPA indicating the use of funding, the status of accomplishments, and recipient compliance with administrative and program requirements. It is the responsibility of the GMO to ensure that the necessary recipient. reports are received by the Project Officer, FMO, and the MBE/WBE Coordinator and that the necessary follow-up actions are taken if reports are overdue, incorrect, or deficient. The GMO also assists the program office with the review and analysis of recipient reports for administrative compliance and consistency with Agency objectives. Recipient Reports GMO Program Office SF0 7.2 ------- COST SHARING • Requirements Vary With Program • Only Allowable Costs Can Be Used • Cannot Use Federal Funds As Match • May Use In-Kind VIEWGRAPH # 3 TITLE: Cost Sharing KEY POINTS: A recipient of EPA assistance must share the cost of such assistance if cost sharing is specified in the regulations applicable to a particular program. Most cost sharing requirements for EPA’s programs are based on Federal statutes. Appendix 14-A of the Assistance Administration Manual contains a list of the statutory/regulatory cost sharing requirements of current, funded EPA programs. However, since cost sharing requirements for each program change from time to time, GMO personnel should verify program requirements. • Recipients can claim only allowable costs to meet cost sharing requirements (Viewgraph #6 below discusses allowable costs). • When an EPA program is subject to minimum recipient cost sharing requirements, the Award Official may negotiate a higher cost share with the recipient whenever such negotiations are justifiable based upon the recipient’s ability to pay. • The Director, Grants Administration Division (Headquarters), may approve a deviation from non-statutory minimum cost sharing requirements (Viewgraphs # 14 and 15 below discuss deviations). • Funds awarded under assistance programs of other Federal agencies cannot be used to meet EPA cost sharing requirements unless EPA’s or the other agency’s legislation explicitly authorizes such use. • Sources of funds for recipient cost sharing may include “in-kind contributions (e.g., facilities, equipment, materials, professional services) provided by non-Federal public agencies, organizations, or individuals. 7.3 ------- METHODS OF PAYMENT • Advance Payment (EPA-ACH or Treasury Check) • Reimbursement Payment (EPA-ACH or Treasury Check) VIEWGRAPH # 4 TITLE: Methods of Payment KEY POINTS: • EPA assistance agreements provide for payment by either of two methods: payment in advance of performance or reimbursement after performance . • The Award Official may authorize advance payment to recipients under most EPA assistance programs when the recipient indicates the need for advance financing. Advance payment is made either by Treasury Check or through the EPA Automated Clearing House (“ACH”, also known as “Vendor Express” -- See Appendix F for more information on ACH), which provides electronic deposit of funds to the financial institution designated by the recipient. • Advance payment requested using the EPA-ACH Payment Request Form will be made in an amount necessary to meet immediate cash requirements or as stipulated in a predetermined payment schedule. • Reimbursement payment requested using SF-270 will be made by Treasury check after the recipient submits a request for reimbursement of EPA ’s share of expenditures incurred for EPA-assisted projects. • The recipient of a WWT construction grant must request funds using SF-271 and will be paid only on a reimbursable basis. • For Superfund, the recipient must identify and charge costs to specific sites, activities, and operable units, as applicable, for drawdown purposes as specified in the Superfund CA. AUTOMATED CLEARING HOUSE Pay to 19 II r911 ..= ...IIaII 7.4 ------- PAYMENT PROCESS GMO Determines Payment Method and SF0 Processes EXAMPLE: REIMBURSEMENT Payment Request GMO and EPA Project ________ Officer Review Recipient Payment Requests GMO Coordinates Approval of Reimbursement Payment - Request wfth SF0 and Program Office GMO and EPA Project ________ Officer Ensure Funds Reach Occupant on Time VIEWGRAPH # 5. TITLE: Payment Process KEY POINTS: The GMO, within statutory/regulatory constraints, determines which payment method will be used by applying several criteria meant to establish, among other things: whether a particular method is authorized for use in the assistance program, and whether the recipient can provide necessary accounting support to obtain and protect the funds, account for expenditures, and fulfill reporting requirements. • After approval of a particular payment method, the FMO is responsible for processing payment requests, performing required accounting, monitoring cash management practices of recipients, and complying with reporting requirements of the U.S. Treasury. • GMOs and FMOs ensure that funds are made available to the recipient in a timely manner and that the payments are proper. GMOs and Project Officers review payment requests and Financial Status Reports (FSR5) and compare them with progress reports to ensure that each of their projects progress satisfactorily and that the conditions of the grant or cooperative agreement are met. • The GMO reviews payment requests for compliance with the administrative requirements of the assistance agreement (e.g., match, cost share, terms and conditions, timeliness). It is responsible for coordinating approvaVdisapproval of payment requests (advance, reimbursement) with the program office and the FMO. It is also responsible for developing and providing the program office with reports on the status of unobligated and unliquidated funds. 7.5 ------- CRITERIA FOR APPROVING COSTS VIEWGRAPH # 6 TITLE: Critena for Approving Costs KEY POINTS: • In order for costs to be approved under an assistance agreement, EPA must determine that the costs are allowable and reasonable. This determination is based on an analysis of: the applicable cost principles, the governing regulations, and the conditions specified in the assistance agreement. • Each recipient must follow the Federal cost principles applicable to that type of organization: - State, local, and Indian tribal governments are subject to 0MB Circular A-87 - Private nonprofit organizations (other than institutions of higher education, hospitals, and organizations excluded in 0MB Circular A-i 22) are subject to 0MB Circular A-i 22 - Educational institutions are subject to 0MB Circular A-2i - For-profit organizations (other than hospitals or organizations excluded in 0MB Circular A-i22) are subject to 48 CFR Part 31. • Recipienté must maintain and report costs in accordance with the regulations that govern the assistance agreement, e.g., 40 CFR Parts 31 and 35, Subpart 0. • The recipients cannot incur costs that are contrary to the specific terms of the agreement or are outside its authorized scope. Before incurring such costs, the recipient must either obtain a deviation or amend the agreement. CHECKUST FOR APPROVING COSTS Costs Are Allowable and Reasonable Costs Conform to 0MB Cost Principles Costs Conform to Applicable Regulations Costs Conform to Terms of AssIstance Agreement Costs Are Incurred During the Project PerIod 7.6 ------- VIEWGRAPH # 6 (cont.) TITLE: Cntena for Approving Costs KEY POINTS: • Costs can only be approved if they are covered by the terms of the assistance agreement. The recipient may only charge costs if they have resulted from obligations made during the approved funding period. If carryover of unobligated funds is permitted by the agreement, obligations may be made in the subsequent funding period. • The recipient must liquidate all obligated balances within 90 days from the end of the funding period. This requirement coincides with the requirements for submitting the FSR. EPA may extend this deadline at the request of the recipient. • Recipients may not incur costs before the Award Official signs the agreement. Once the Award Official signs the agreement, the recipient may incur costs even if the recipient has not yet signed the agreement, provided those costs are identified in the agreement and the recipient does not change the agreement. 7.7 ------- BUDGET CHANGES REQUIRING PRIOR EPA APPROVAL Budget Changes: • Increase In Total Funding Amount • Cumulative Transfer among Direct Cost Categories that Exceed 10% of Total Approved Budget • Transfer of Funds Allotted for Training • Fund or Budget Transfer between Non-Construction and Construction VIEWGRAPH # 7 TITLE: Budget Changes Requiring Pnor EPA Approval KEY POINTS: • Recipients cannot make certain post-award changes in budgets or certain programmatic changes without prior EPA approval and the execution of a formal amendment to the assistance agreement. The request for such a change must be made in the same budget format the recipient used in its application and must be accompanied by a narrative justification for the proposed revision. • 40 CFR Part 31.30 requires Award Official approval of a formal amendment before a State, local, or Indian Tribal government makes the following budget changes : - Any revision which would result in the need for additional funding - Cumulative transfers among direct cost categories, or, if applicable, among separately budgeted programs, projects, functions, or activities which exceed or are expected to exceed 10% of the current total approved budget, whenever the awarding agency’s share exceeds $100,000 - Transfer of funds allotted for training allowances, i.e., from direct payments to trainees to other expense categories - Rebudgeting of funds from construction to non-construction activities, or vice versa. • Some changes require prior approval and may be made by letter rather than execution of a formal amendment. For example, an equipment purchase beyond that specified in the original agreement, requires the prior approval of EPA. 7.8 ------- VIEWGRAPH # 7 (cont.) TITLE: Budget Changes Requiring Prior EPA Approval KEY POINTS: 40 CFR Part 30.700 requires Award Official approval of a formal amendment before a non-government recipient (hospital, institution of higher education, or non-profit organization) makes the following budget changes : - Transferring an award to another recipient - Rebudgeting funds for either construction or non-construction activities if transferring from one activity to the other - Rebudgeting funds for indirect costs to absorb increases in direct costs - Rebudgeting funds for training allowances if transferring to other cost categories. 7.9 ------- PROGRAMMATIC CHANGES REQUIRING A FORMAL AMENDMENT immatic Changes: • Revision to the Project Scope or Objectives • Extension of the Period of Availability of Funds • Change In Key Personnel • Use of Third Parties (Non-construction agreements) VIEWGRAPH # 8 TITLE: Programmatic Changes Requiring A Formal Amendment KEY POINTS: 40 CFR Part 31 requires Award Official approval of a formal amendment before a State, local, or Indian Tribal government makes the following programmatic changes : - Revising the scope or objectives of the project (regardless of whether there is an associated budget revision requiring prior approval --- see p. • 7.12) - Extending the period of availability of funds - Changing key personnel whenever such personnel are specified in an application or an Assistance Agreement (see p. 7.12) - Under construction projects, contracting out, subgranting (if authorized by law) or otherwise obtaining the services of a third party to perform activities which are central to the purposes of the award. This requirement does not apply to the procurement of equipment, supplies, and general support services. • 40 CFR Part 30.700 requires Award Official approval of a formal amendment before a non-government recipient (hospital, institution of higher education, or non-profit organization) makes the following programmatic changes : - Transferring an award from one recipient to another - Changing the objectives of the project - Changing substantially the scope of the project. 7.10 ------- TRANSFERRING AN AWARD • Transfer By Award of New Assistance Agreement • Transfer By Amendment VIEWGRAPH # 9 TITLE: Transferring an Award KEY POINTS: Recipients may request EPA to transfer an assistance project to another recipient for a number of reasons, e.g., transfer of the Project Manager to another recipient organization; reorganization; changes in the recipient organization’s name. There are two types of transfers: award of a new assistance agreement and transfer by amendment. Procedures to follow for each type of transfer may be found in Chapter 34 of the Assistance Administration Manual . Closeout of the original project and an award of a new assistance agreement is justified when a project is transferred to a new. recipient because the Project Manager moves to a new recipient organization. • If a legislative or other legal action (e.g., merger, divestiture, reorganization, or recipient name change) affects the status of the recipient, the Award Official may transfer the original recipient’s award to the new recipient or change the recipient’s name by issuing an assistance amendment. 7.11 ------- VIEWGRAPH # 10 CHANGING THE OBJECTIVE OR SCOPE OF THE PROJECT TITLE: Changing the Objective or Scope of the Project KEY POINTS: Recipients must receive the Award Official’s approval of requests to change a project’s objectives or to make substantial changes in a project’s scope before implementing them. Such changes may include changes in budget or project periods, changes in the project site, and changes in, or temporary absence of, project managers or other key personnel if the change or absence will affect the project’s scope or objectives. • The Project Officer must prepare a written recommendation to the appropriate GMO recommending whether EPA should approve requests for changes in scope or objectives. The GMO must prepare an assistance amendment for requests approved by the Award Official. • The Project Officer must notify recipients in writing of disapprovats of requests for changes in scope or objectives. The letter must explain the reasons for the disapproval. A Project Officer’s failure to disapprove a request for a change in scope or objectives of a project will not commit or obligate EPA to provide additional assistance. • Requests for an extension of the budget or project period must be submitted to, and approved by, the EPA before the current budget or project period expires; otherwise, costs incurred beyond the approved budget or project period are unallowable. Any extension beyond the regulatory duration periods requires a formal deviation. 7.12 ------- INFORMAL CHANGES • Minor Adjustments to Methodology or Approach • Minor Adjustments to Project Budget • Staff Changes VIEWGRAPH # 11 TITLE: Informal Changes KEY POINTS: Recipients may need to change their assistance projects to respond to various changed conditions. Neither a formal amendment nor prior written approval is necessary for minor changes that are consistent with the project objective and within the scope of the assistance agreement. However, such changes should be discussed between the Project Officer and the recipient prior to implementation. For example, recipients may: - Make minor adjustments to the methodology, approach, or other aspects of their project as needed in order to meet objectives or expedite completion - Adjust their project budgets, except adjustments requiring formal amendments, provided they use the funds in accordance with the approved scope of work, EPA regulations, and applicable cost principles. - After the staff assigned to the project, provided the change will not change the objectives of the project. 7.13 ------- DISPUTES • esponsi iuity Tor Disputes Resolution • EPA Actions not Subject to Review VIEWGRAPH # 12 TITLE: Disputes KEY POINTS: Each Award Official (Regional and Headquarters) designates a Disputes Decision Official(s) (a senior EPA employee). The Disputes Decision Official reviews disputes between applicants/recipients and EPA and issues a decision. • Whenever possible, disagreements between EPA and applicants/recipients should be resolved by the EPA Project Officer and the GMO within the branch, division, regional or Headquarters organization closest to the problem and with the authority to resolve the matter. • Most disputes are a result of recipient disagreement with an audit finding(s). It is the DDO’s role to coordinate the resolution of disputes between the recipient, the program office, and the Office of Regional Counsel. The GMO also plays a leading role in the development of regional procedural guidance. • The following EPA actions cannot be disputed: - Denials of requests for a deviation under 40 CFR Part 30, Subpart J (which outlines the procedures for requesting a program deviation) - Bid protest decisions under 40 CFR Part 33 and Part 31 - National Endowment Policy Act decisions under 40 CFR Part 6 - Advanced wastewater treatment decisions of the Administrator - Audit Resolution Board decisions - Debarments/suspensions by the Director, GAD 7.14 ------- VIEWGRAPH # 12 (cont.) TITLE: Disputes KEY POINTS: If an applicant or recipient’disagrees with a decision made by a Disputes Decision Official, the disputant may file a request for a review of the decision. A request for the review of a decision made by a Regional Disputes Decision Official must be addressed to the Regional Administrator. The decision made by the Regional Administrator is usually final, although a discretionary review of the decision by the Assistant Administrator of the program office at Headquarters may be requested, and.may result in a change of official position. A request for the review of a decision made by a Headquarters Disputes Decision Official must be addressed to the Assistant Administrator of the program office at Headquarters. See 40 CFR Part 30, Subpart L or Chapter 35 of the Assistance Administration Manual for further information on disputes resolution. 7.15 ------- FORMAL DEVIATIONS Deviation Requests include: • Name, Assistance Identification Number, Agreement Date, and Award Amount • Section of Regulation From Which a Deviation IsNeeded • Description of Circumstances and Justifications • Statement as to Whether Similar Deviation Has Been Made Previously for the Project In Question VIEWGRAPH # 13 TITLE: Formal Deviations KEY POINTS: Recipients must adhere to EPA’s assistance regulations. In some cases, however, it may be necessary to allow deviations from the regulations. The Director, GAD, is authorized to approve deviations from the non-statutory requirements of the regulations, except for those that implement Executive Order requirements. • Deviation requests for assistance awards administered in Regional Offices must be submitted in writing to the Region or delegated State agency, as appropriate. The Region, through the GMO, or the delegated State agency then submits the request to the Director of GAD. Deviation requests should be submitted as soon as the need for the deviation is known. • Each request for a deviation must contain as a minimum: - The name of the applicant or recipient, the assistance identification number of the application (if available) or assistance award, the date the assistance agreement was awarded, and the dollar value of the application or award and the amount in question; - The section(s) of the regulation from which a deviation is needed; - A complete description of the circumstances, and justification for, the deviation: an explanation of what it will do, and any pertinent background information including a copy of the applicant’s or recipient’s request; - A statement as to whether the same or a similar deviation has been previously requested for the same project, and if so, an explanation as to why the previous request was made and the outcome. • If a deviation is requested for a project administered in a Regional Office, the deviation must also contain as a minimum the Region’s recommendation, including the delegated State’s recommendation, if appropriate, and the name of a contact in the Regional Office who is most familiar with the request 7.16 ------- VIEWGRAPH # 14 DEVIATION APPROVAL OR DISAPPROVAL TITLE: Deviation Approval or Disapproval KEY POINTS: • Deviations are approved or disapproved by the Director, GAD, with the concurrence of the Office of General Counsel and the appropriate program office. • Concurrence in the approval of the deviation by the appropnate Assistant Administrator(s) is required by 0MB where a deviation will affect a group of applicants or recipients (i.e., class deviation). • When deviations are approved before assistance is awarded, approval is contingent upon the approval of the application. • A copy of each written deviation approval or disapproval must be retained in the official EPA assistance file. The provisions of any approved deviation must be incorporated into the assistance agreement. • Decisions made by the Director, GAD, on deviation requests are not subject to the review procedures under 40 CFR Part 30, Subpart L. The Director, GAD, may reconsider decisions in cases where it is believed the decision was based on incomplete information. 7.17 ------- MONITORING RECIPIENT PERFORMANCE • On-Sfte: - Performance reviews - MAP reviews • In-House: - Reports - Payment vs. Progress - Audft Follow-up VIEWGRAPH # 15 TITLE: Monitonng Recipient Performance KEY POINTS: EPA is authorized to audit the financially assisted activities of any recipient organization. However, it is Federal policy to place maximum reliance on a recipient’s own audits if they are carried out in accordance with applicable Federal audit standards. Generally, audits are conducted on an organization-wide basis annually, and include a representative sampling of Federal grants and cooperative agreements (Module XII discusses recipient audits in more detail). • Besides audits, EPA performs a variety of other recipient monitoring activities, both on-site and “in-house” (at Headquarters or a Regional Office). • On-site reviews include the following: - Mid-year and end-of-year reviews to evaluate recipient performance - The Management Assistance Program (MAP) review provides technical assistance to the recipient. This assistance is used to ensure the highest quality recipient management practices, and to avoid future potential audit findings and difficulties by ensuring recipient compliance with EPA regulations. The MAP review is also used to assist the recipient in implementing changes to systems and processes in response to changing requirements, and to follow up on these changes; to discuss any processes with which it is having difficulty; and to clarify the specific regulations that govern the recipient’s cooperative agreements. 7.18 ------- VIEWGRAPH # 15 (cont.) TITLE: Monhtonng Recipient Performance KEY POINTS: “In-House” monitoring activities, those that EPA conducts from Headquarters or a regional office, include the receipt and review of financial status reports, progress reports, and payment requests, as well as audit follow-up. • The SF 269, “Financial Status Report” (FSR), must be reviewed to ensure that the recipient uses EPA funds properly. This review is usually done by the GMO, and a copy is forwarded to the Project Officer. • Quarterly progress reports must be reviewed by the program office to ensure that work performance proceeds according to schedule. • Financial Status Reports are compared to progress reports to alert the Agency in advance to problems the recipient may have in meeting schedules for completing certain work elements, whether the overall approach should be modified, and whether a deviation is needed.. • Payment requests must also be compared to progress reports to ensure that such requests are justifiable against work actually accomplished. • As discussed in Module IV, EPA uses its Management Audit Tracking System (MATS) to ensure complete and timely follow-up on the resolution of all audit (or other review) findings and the completion of all corrective actions. - 7.19 ------- EPA RESPONSE TO RECIPIENT PERFORMANCE • Noncompliance and High Risk Recipients • Performance-based Assistance Policy VIEWGRAPH # 16 TITLE: EPA Response to Recipient Performance KEY POiNTS: EPA assistance administration and program officials are faced with a wide range of potential problems involving program participants. The participant may be an assistance recipient, a contractor, a subcontractor, or a supplier to a recipient. in some cases, the problem may involve a technical matter which can easily be resolved by informal discussions with the participant. At other times, the matter may involve nonperformance, poor performance, or a criminal matter which places the Agency’s assistance programs at significant nsk. To deal with noncompliance or high risk participants, Award Officials may impose special conditions on the award, find a person or organization non-responsible to receive an award, issue stop work orders, withhold payment of funds, terminate or annul an award, or initiate an investigation to determine if further action is necessary. Further, after all administrative remedies are exhausted, the Director, GAD, may suspend and/or debar any person or organization from participation in all EPA assisted activities for a specified period of time. • in 1985, EPA instituted a performance-based assistance policy to ensure a consistent effort within the Agency to assess recipient performance against negotiated commitments, to reward accomplishments, and to correct problems (See Appendix G for a copy of EPA’s Policy on Performance-based Assistance). • Because the remedies for recipient noncompliance may have ramifications outside the Agency, it is important that any Agency action be coordinated among the various offices concerned. Principal participants in the decision to take an action are the program office, assistance administration personnel, and the Office of General or Regional Counsel. The Office of Inspector General (OlG) is also a key participant in suspension or debarment actions or where a matter may involve an audit or potential criminal wrongdoing. 7.20 ------- ------- FINANCIAL MANAGEMENT REQUIREMENTS fOR RECIPIENTS BY ThE END OF ThiS MODULE YOU WILL BE ABLE TO: • identity the Requirements for Accounting and Internal Management Under Assistance Agreements • Identity the Financial Reporting Requirements for Assistance Recipients • identify the Recordkeeping Requirements for Assistance Recipients VIEWGRAPH#1 TITLE: Financial Management Requirements for Recipients KEY POINTS: • The recipient of an EPA assistance agreement must follow certain management and administration requirements found in Agency regulations and guidance. One of the most critical responsibilities of the recipient is to adequately manage funds awarded under the agreement. • This module first identifies the basic recipient requirements for maintaining proper accounting systems and financial records. These basic requirements include those that provide for adequate safeguards against the misuse of funds awarded under an assistance agreement. • Next, the module discusses general financial reporting requirements and identifies the specific reports required to track the status of funds and to request payment for work performed under the agreement. • Finally, the module identifies the financial recordkeeping requirements for recipients and their contractors, including the differences between non-Superfund and Superfund assistance agreements in this area. 8.1 ------- ACCOUNTING AND INTERNAL MANAGEMENT • Recipient’s Accounting System Must: - Track the Financial Activity of each EPA-Assisted Project - Provide Supporting Documentation for Financial Activity • Recipient Must have Controls over Project Funds and Other Assets Rn.ndal Ldg.r ::: .:.:.: .:. .: VIEWGRAPH #2 TITLE: Accounting and Internal Management KEY POINTS: • States that receive non-Superfund assistance agreements must account for such funding in accordance with State laws and procedures and 0MB Circular A-87. • Recipients must have accounting systems that meet certain standards. - The system must provide accurate, current, and complete information on all financial activity under each agreement. - Recipients must maintain source documentation (e.g., purchase requests, invoices, and timesheets) to support the transactions in their accounting systems. These documents must identify the source and use of funds and contain such information as authorizations, obligations, and expenditures. • Recipients must have procedures in place to provide control and accountability for funds, property, and other assets, and to ensure that they are being used only for the purpose authorized in the assistance agreement. Specifically, such control systems should compare the actual expenditures to the amounts budgeted in the assistance agreement to ensure that over-spending does not occur. The systems should also provide adequate methods of authorizing expenditures, safeguard and inventory property, and direct the conduct of cost/price analyses. 8.2 ------- VIEWGRAPH #2 (cont.) TITLE: Accounting and Internal Management KEY POINTS: Supertund regulations define additional requirements for recipients’ accounting and internal management procedures and systems. The system must track expenses by site, activity, and operable unit, as applicable, according to object class. Further, for cost recovery purposes, the source documentation must identify the site, activity, and operable unit to which expenses were charged. The system must provide controls to ensure accurate and complete charging to the appropriate CEACLA site, activity, and operable unit. 8.3 ------- REPORTING UNDER ASSISTANCE AGREEMENTS • Provide Financial Status and Progress • Document Administrative and Programmatic Activities VIEWGRAPH #3 TITLE: Reporting Under Assistance Agreements KEY POINTS: Reports are necessary to provide information to EPA regarding project expenditures and activities. • The recipient is required to submit administrative reports. These reports include financial status, property (covered in Module X), minority and women’s business utilization (covered in the Module IX), relocations and acquisitions, and patents and inventions. • The recipient also is required to submit programmatic reports such as interim progress reports, reports of significant changes, and final reports. - The GMO is responsible for ensuring that recipients submit the required reports. - The Project Officer conducts a programmatic review of the reports based on the programmatic or technical progress of the project(s). • Subsequent viewgraphs will focus on the recipient requirements for reporting on financial status. 8.4 ------- GENERAL REQUIREMENTS FOR FINANCIALREPORTING EPA Reporting Requirements must Adhere to 0MB Guidelines - Utilize 0MB Approved Forms • Adher. to 0MB Llmfts for Reporting Frequency and Required Copies - incorporate Specific Agency Guidance as Necessary - Office of Management and Budget VIEWGRAPH #4 TITLE: General Requirements for Financial Reporting KEY POINTS: • 0MB Circulars A-i 02 and A-i 10 require financial reporting under grants and cooperative agreements. • In these circulars, 0MB prescribes the forms recipients use when reporting expended and non-expended funds, status of cash advances, and requests for advances and reimbursements. (EPA may authorize an exception to this requirement by allowing recipients to submit the information in machine-useable format or on computer print-outs.) • EPA may not require recipients to submit reports more frequently than 0MB requires. (The prescribed reporting frequency will be addressed under the discussion of each report.) Further, EPA may not require submission of more than two copies of the report, in addition to the original. • Despite the restrictions 0MB places on reporting under assistance agreements, it does allow EPA to tailor the forms to the individual recipient as long as EPA does not apply additional requirements. For example, EPAcan extend delivery dates of required reports, instruct recipients to disregard certain items if it does not need the information for its decision making, or waive the requirement to submit certain reports. 8.5 ------- SUMMARY OF REQUIRED FINANCIAL REPORTS RepoctName Fomi Name Due Finandal Status Report . SF 269 or 269 A • Q.Jatefty. Semiannua y. or Annuaiy gODa y sA l lertheEndd(theFinaiBudget Period Federal CesI Transaodon Report SF 272 Generaly Required Semiannually, Within 15 Days from the End ci the Semiannual Period Request for Advance or Reimiw e nt SF 270 • Requ Wed Monthly/Quarterly for Recipients Requesting Re urseme r1 under Non-construction Grants Ontlay Report and Request for Co ittuodon Progran . SF 271 nerly. S annualy, or Annualy • 90 Days AIler the End ci the FioaJ Budget Period • Only Required Under Selected Cirairnetances VIEWGRAPH #5 TITLE: Summary of Required Financial Reports KEY POINTS: • This viewgraph provides a summary of the financial reports required from assistance recipients. • The reports mentioned here are explained further in the following viewgraphs. • With the introduction of the Automated Clearing House (ACH) Payment System, certain requirements of 0MB Circular A-i 10 and 40 CFR Parts 30, 31, and 35 have become obsolete; therefore, these requirements have not been stated here. 8.6 ------- FINANCIAL STATUS REPORT Purpose is to Report the Financial SF 269A Results of a Program (Short Form) • Efther Short or Long Form is Submitted • Frequency of Reporting: • Annually, 90 Days after Fiscal or SF 269 Pro 2 ect Year, Unless Specified by (Long Form) - 30 Days after the End of the Period If Quarterly or Semiannual Reporting Is Specified - At the End of Agreement, 90 Days after End of Budget Period VIEWGRAPH #6 TITLE: Financial Status Report KEY POINTS: The Financial Status Report (FSR) is used by the recipient to report the status of funds. There is a short form (most commonly used) and a long form (for use when there is program income). Recipients of fellowship assistance agreements do not need to submit FSRs. • Program outlays and income can be reported on a cash or accrual basis, depending upon recipient preference. • A “final” FSR must have no unliquidated obligations; if any funds remain unobligated, the report is an “interim” report and the recipient must submit a “final” report after all obligations are liquidated. • EPA cannot require its recipients to submit an FSR more frequently than quarterly; however, EPA may specify the frequency within that limitation. If EPA does not specify the frequency, the recipient will be required to submit the report annually. Further, the recipient must submit a final report upon termination or completion of the project period. • There are additional requirements for Superfund assistance agreements: - Recipients must report financial information by site, activity, and operable unit, as applicable - Recipients must submit an FSR for a CERCLA-funded response activity within 90 days of completing the activity. 8.7 ------- FEDERAL CASH TRANSACTIONS REPORT SF272 • Purpose is to Mon Itor Status of Advances and Disbursements • Generally Required Semiannual Semiannual I’erlod VIEWGRAPH #7 TITLE: Federal Cash Transactions Report KEY POINTS: The Federal Cash Transactions Report (FCTR) is used to monitor funds advanced through the ACH Payment System. In addition, the FCTR provides information on cash disbursements for each assistance agreement. ACH replaces the use of Letters of Credit and Treasury check advances. • Recipients advanced funds through the ACH Payment System must submit the FCTR semiannually within 15 working days following the end of the semiannual period. The semiannual periods end June 30 and December 31 of each year. If the amount of the advance is $1 million or more annually, EPA can require the recipient to submit its FCTR within 15 working days from the end of each month. • For recipients subject to 40 CFR Part 30, EPA may waive this reporting requirement when monthly advances do not exceed $10,000 per recipient. 8.8 ------- REQUEST FOR ADVANCE OR REIMBURSEMENT Only Required for Recipients SF 270 Requesting Reimbursement Under Non-construction Grants c VIEWGRAPH #8 TITLE: Request for Advance or Reimbursement KEY POINTS: • Since the ACH Payment System has eliminated the use of Letter of Credit the Request for Advance or Reimbursement is used to obtain a reimbursement for non-construction grants other than fellowships. This form cannot be used when advances are made to recipients automatically. • Under 40 CFR §30.400(b)(2), recipients receiving assistance through the reimbursement method must submit a Request for Advance or Reimbursement form at least quarterly once the recipient has received the original advance. Further, the recipient may not submit the request more often than monthly. Recipients who do not meet the ACH requirements will be funded through the reimbursement method. • Under 40 CFR §31.41 (b)(3) and 40 CFR Part 35, Subpart 0, recipients receiving assistance through the reimbursement method will not be required to submit this request more often than quarterly. If the frequency of this request is not specified in the assistance agreement, requests may be submitted annually. 8.9 ------- OUTLAY REPORT AND REQUEST FOR REIMBURSEMENT FOR CONSTRUCTION PROGRAMS • Purpose is to Request Reimbursement or Report Outlays Under Construction _________ Grants SF 271 • Frequency of Reporting: - Annually, 90 Days after the Project Period, Unless Specified by EPA - 30 Days after the End of the Period If Quarterly or Semiannual Reporting Is Specified • At the End of Agreement, 90 Days _________________ after End of Budget Period VIEWGRAPH #9 TITLE: Outlay Report and Request for Reimbursement for Construction Programs KEY POINTS: Under 40 CFR Part 31, the Outlay Report and Request for Reimbursement for Construction Programs is used for the following: - Construction activities paid by the reimbursement method, unless EPA prescribes the use of the Request for Advance or Reimbursement form (40 CFR §31.41 (e)(i)) - Construction activities paid by electronic funds transfer (40 CFR §31.41 (e)(2)(i)). • EPA may substitute the Financial Status Report for the Outlay Report and Request for Reimbursement for Construction Programs (40 CFR §31 .41 (e)(2)(iii)). • As with the FSR, outlays can be reportedon a cash or accrual basis; however, EPA must consider the capabilities of the recipient’s accounting system when determining which method will be used (40 CFR §31.41 (e)(3)). • EPA can specify the frequency of submission of this report; however, it cannot require the recipient to submit the report more frequently than quarterly. If EPA does not specify the frequency, the report must be submitted annually. In addition, the recipient must submit a final report upon expiration or termination of the assistance agreement (40 CFR §31.41 (b)(3)). 8.10 ------- VIEWGRAPH #9 TITLE: Outlay Report and Request for Reimbursement for Construction Programs KEY POINTS: Continued • Recipients may not submit their requests for reimbursement more often than monthly unless otherwise provided in the assistance agreements. • Recipients governed by 40 CFR Part 35, Subpart 0, must adhere to the same requirements as recipients governed by 40 CFR Part 31 with respect to this report. • Institution of higher education, hospitals, and other non-profit organizations are authorized to submit this report at least monthly for construction activities funded through the reimbursement method (0MB Circular A-i 10). 8.11 ------- PROGRAM INCOME • Defined as Income Generated or Earned Under an Assistance Agreement • Recorded as Financial Transaction • Used Three Ways: - Deduct from Allowable Costs - Add to Existing Funding - Apply to Recipient Matching Requirements VIEWGRAPH #10 TITLE: Program Income KEY POINTS: • Recipients are encouraged to earn program income in order to defray the cost of projects funded under assistance agreements. • Program income is gross income directly generated by or earned as a result of an activity supported under an agreement during the budget period. (If specified in the agreement, recipients may deduct the reasonable costs of generating program income to determine program income.) Examples of program income include fees from services, rental of property acquired under the agreement, proceeds from the sale of articles fabricated under an agreement, and payments on loans made with agreement funds. • Unless specified in the assistance agreement, program income does not include taxes, assessments, fines, or other revenues generated by the recipient; royalties or license fees for copynghted materials or patents developed by the recipient; or proceeds from the sale of property. In addition, revenue from Waste Water Treatment Construction projects is not program income. • Recipients must document the receipt and expenditure of program income in their accounting records. • There are three means by which recipients can account for and use program income. The first method is the “default” method: this method must be utilized if EPA does not specify one of the two alternative uses in the assistance agreement. - With the “default” method, the program income is deducted from the total allowable costs to offset the respective payment of costs incurred under the agreement. As a rule, the income should be used to offset current costs. 8.12 ------- VIEWGRAPH# 10 (cont.) TITLE: Program Income KEY POINTS: - If specified as an option by EPA, the recipient may use program income to Supplement the funds committed under an assistance agreement by both EPA and the recipient. In this case, the additional funds must be used for the same purpose, and under the same conditions, as the funds approved under the agreement - EPA can also approve use of program income to satisfy the cost sharing requirements under the agreement. In this case, the amount of the award remains the same. • Under alternatives two or three, if the program income exceeds the limits stipulated in the assistance agreement, the recipient must deduct the excess program income from the allowable costs, i.e., the recipient must use the “default” method. • Unless specified in the assistance agreement, recipients have no obligation to account for the disposition of program income earned after expiration of the assistance agreement. 8.13 ------- RECORDKEEPING REQUIREMENTS NON.CONSTRUCflON ASSISTANCE AGREEMENTS • Maintain Complete Project Records • Length of Retention: 3 Years SUPERFUND ASSISTANCE AGREEMENTS • Maintain Complete Site-Specific Records • Length of Retention: 10 Years Unless Cooperative Agreement Specifies Otherwise, or Audit Is in Progress VIEWGRAPH #11 TITLE: Recordkeeping Requirements KEY POINTS: For non-Superfund assistance agreements: Recipients must maintain complete project records which consist of such things as financial and programmatic records, supporting documentation, procurement and property records, and indirect cost rate proposals and accounting records. These records can consist of the original documents or be substituted with microform copies. Under 40 CFR Part 30, recipient records other than real property and nonexpendable personal property records must be maintained for three years from the receipt of the final FSR. For construction awards, the retention period starting date is generally the approval date of EPA’s payment of the project. (Refer to Chapter 14 of the Assistance Administration Manual for detailed instructions.) For research, demonstration, and training programs, the retention period starting date is the receipt date of the final Financial Status Report. Under 40 CFR Part 31, recipient records must be maintained for three years from the date the recipient submits its final expenditure report. Exceptions to this retention period starting date exist for property records; records for income transactions after support; and indirect cost records, including indirect cost rate proposals and cost applications. (These exceptions are detailed in 40 CFR §31.42.) 8.14 ------- VIEWGRAPH #11 (cont.) TITLE: Recordkeeping Requirements KEY POINTS: For Superfund assistance agreements: - The overriding factor in determining recordkeeping requirements is cost recovery. Recipients must maintain records that enable costs to be reported and compiled by site, activity, and operable unit, as applicable. The State Superfund Financial Management and Recortikeeping Guidance suggests the use of site files in order to facilitate the preparation of cost documentation packages used in cost recovery litigation. - Site files should include documentation of payroll, travel, procurement of contractor services, property, indirect costs, and the number of technical hours spent on pre-remedial projects. Documentation of expenditures should be reconciled to the recipient’s accounting system periodically. - Unless otherwise specified, recipients must be able to deliver site-specific records 30 working days after they are requested by an EPA regional office. Such requests are generally made to support cost recovery activities. - As with non-Superfund agreements, these records can consist of the original documents or be substituted with microform copies. However, before destroying the original records under a Superfund agreement, the recipient must obtain EPA award official approval. - Recipients must retain records for ten years, unless otherwise specified in the cooperative agreement, following submission of the final Financial Status Report (FSR). (Exceptions to the starting date for the retention of records described in 40 CFR §31.42(c) (1)and. (2) are also applicable for Superfund agreements.) Further, the recipient must obtain written approval from the EPA award official before destroying any records. • Under all agreements, if any litigation, claim, negotiation, audit, cost recovery (for Superfund assistance agreements), or other activity has begun before the end of the retention period, the recipient must retain all records until the resolution of the activities. 8.15 ------- RECORDKEEPING REQUIREMENTS (CONT.) ALL ASSISTANCE AGREEMENTS • Provide Access to EPA and GAO • Provide Public Access to Records • Ensure Maintenance and Accessibility of Contractor Records VIEWGRAPH #12 TITLE: Recordkeeping Requirements (Cant.) KEY POINTS: • The recipient must make all records available to EPA or GAO for purposes of audits, examinations, excerpts, and transcripts. • Recipients may have to make records available to the public if a request is made under the Freedom of Information Act. • With regard to contractor records: - Under non-Superfund assistance agreements, the recipient must require contractors to maintain records which are directly pertinent to the contract and make them available to the recipient, EPA, and GAO. Like the recipients, the contractors must maintain their records for three years. - Under Superfund agreements, recipients must require contractors to track costs by site, activity, and operable unit, as applicable, and make them available to the recipient, EPA, and GAO. Like the recipients, contractors must maintain their records for ten years, or as otherwise specified in the cooperative agreement. 8.16 ------- ------- PROCUREMENT BY THE END OF THIS MODULE YOU WILL BE ABLE TO:. • identify the Regulations that Apply to Procurement Under Assistance Agreements • Describe the Requirements for Recipient Certification of Procurement Systems and the Standards for Procurement Systems • identify the Different Methods of Procurement • Identify the Different Types of Contracts and When Each is Desirable • Identify Required Contract Provisions • Describe the Requirements for Conducting a Cost and Price Analysis • Understand Other Requirements Surrounding Procurement Under Assistance Agreements VIEWGRAPH#1 TITLE: Procurement KEY POINTS: • Under virtually all assistance agreements, recipients engage in procurement of services, construction, or property. • This module introduces the regulations governing procurements made under the various types of assistance agreements and identifies how they apply to different recipients. • An important aspect of procurement under assistance agreements involves the recipient’s procurement system. This module identifies the means by which a recipient can certify its procurement system and describes the standards which must be met by the recipient’s procurement system, including the need to promote full and open competition. • There are four acceptable methods that can be used for procuring goods and services as well as a variety of procurement contracts. This module describes the advantages and limitations of each of these procurement methods and contracts. Additionally, it describes the requirements for cost, price, and profit analyses. • Finally, this module presents procurement requirements related to the following areas: debarment and suspension; minority-owned, women-owned, and small businesses; labor standards; bonding and insurance; recordkeeping; and reporting. 9.1 ------- PROCUREMENT REGULATIONS . NON SUPERFUND 40 CFR Part 31 40 CFR Part 33 40 CFR Part 35, Subp.i’t 0 State Local Indian Univ/Non-Profit X X X • x SUPERFUND State Local Indian Univ/Non-Profit x x X X VIEWGRAPH #2 TITLE: Procurement Regulations KEY POINTS: 40 CFR Part 31, “Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments,” governs procurement under non-Superfund assistance agreements to State, local, and Indian Tribal governments. This regulation superceded 40 CFR Part 33 (for the applicable recipients) as of October 1, 1988. • 40 CFR Part 33, “Procurement Under Assistance Agreements,” governs procurement activity for institutions of higher education and other non-profit organizations (including Superfund TAG recipients). • 40 CFR Part 35, Subpart 0, “Cooperative Agreements and Superfund State Contracts for Superfund Response Actions,” governs procurement for all recipients of Superfund assistance agreements (except TAG recipients). • The primary differences between these three governing regulations, with regard to procurement, are: - The definition of small purchase: -- 40 CFR Part 33.290 defines a small purchase as a procurement transaction costing not more than $10,000 -- 40 CFR Parts 31 and 35, Subparts 0 and M define a small purchase as a procurement transaction costing not more than $25,000 9.2 ------- VIEWGRAPH #2 (cont.) TITLE: Procurement Regulations EYPOINTS: - The requirements for cost and price analyses: -- 40 CFR Part 33 requires a cost or price an ysis for actions estimated to exceed $10,000 -- 40 CFR §31.36(1) and 40 CFR 35.6585(a) require a cost or price analysis for all procurements -- 40 CFR §35.4055 addresses cost and price analysis for TAG recipients. 9.3 ------- PROCUREMENT REQUIREMENTS NON -SUPERFUND • States: Follow State Procurement Procedures • Other Recipients: Follow Federal Regulations SUPERFUND • All Recipients: Follow the Federal Regulations VIEWGRAPH #3 TITLE: Procurement Requirements KEY POINTS: • State recipients of non-Superfund assistance agreements will use their own policies and procedures for procurement actions under these agreements. HOwever, the State must ensure that every purchase order and contract includes all applicable Federal clauses. • Other recipients of non-Superfund agreements and recipients of Superfund agreements may use their own procurement policies and practices if they at least meet the requirements of the applicable Federal, State, and local laws and regulations; • Regardless of the type of assistance agreement or the type of recipient, EPA is not a party to any procurement activity or contract under an assistance agreement. 9.4 ------- PROCUREMENT SYSTEM CERTIFICATION • Recipients Must Evaluate Their Procurement Systems and Determine Compliance with the intent of Regulations • if the Recipient Certifies its System: - Certification is Valid for Two Years or the Length of Project Period - EPA Retains Certain Authority • if the Recipient Does Not Certify its System: - The Recipient Must Follow Requirements of 40 CFR Part 31 • The Recipient Must Allow EPA Pre-Award Review of Proposed Procurement Actions Non-Superfund states do not have to submit certification nor allow EPA Pro-Award Review VIEWGRAPH #4 TITLE: Procurement System Certification KEY POINTS: Under 40 CFR Part 33 (for institutions of higher education and other non-profit organizations), 40 CFR Part 35, Subpart 0 (for recipients of Superfund agreements), and 40 CFR Part 31 recipients (except States) must review their procurement systems to determine whether they meet the intent of applicable • Federal requirements. The recipient then completes the “Procurement System Certification” (EPA Form 5700-48) and certifies whether or not its system meets the applicable Federal requirements. • The Procurement System Ce’rtification is submitted with the application. • The certification is valid for two yearsor the length of the project period identified in the assistance agreement, whichever is longer, unless the recipient substantially revises its procurement system or the Award Official determines that the recipient is not following the requirements. If either of these occur, the recipient must conduct another review of its procurement system and resubmit the “Procurement System Certification.” • Even if the recipient certifies its procurement system, the Award Official retains the authority to: - Authorize non-competitive proposals - Approve the use of procurement methods other than formal advertising to obtain remedial action contractors (under 40 CFR Part 35, Subpart 0 only) - Review protests • - Review proposed awards over $25,000 to other than the low bidder (Under 40 CFR Part 31 only) - Approve innovative procurement methods (under 40 CFR Part 33 only). 9.5 ------- VIEWGRAPH #4 (cont.) TITLE: Procu rerneht System Certification KEY POINTS: If the recipient does not certify its procurement system, it must follow the requirements in the governing regulations and allow EPA to perform a pre-award review of proposed procurement actions. Further, the recipient’s contractors must submit their cost and price data on EPA Form 5700-41, “Cost or Price Summary,” or an equivalent form. (Appendix A of 40 CFR Part 33 contains additional requirements for EPA review and approval if the recipient has not certified its procurement system.) • EPA reserves the right to review the recipient’s procurement system or any procurement action under an assistance agreement. • Under 40 CFR Part 31, even if local and Indian Tribal governments self-certify their procurement systems, upon request by EPA, recipients must make available technical specifications on proposed procurements and provide pre-award review of procurement documents. This pre-award review covers instances when EPA determines that the recipient’s procedures do not meet required standards; the procurement exceeds $25,000 and is being awarded without competition or only one bid or offer is received, specifies a “brand name,” or is not being awarded to the low bidder; or a modification changes the scope of the contract by more than $25,000. 9.6 ------- RECIPIENT STANDARDS • Recipients’ Procurement Systems Must Incorporate: - Code of Conduct - Methods of Resolving Contractual and Administrative issues - Protest Procedures - Criterion for Selection of Contractors • intergovernmental Agreements - Value Engineering Clauses • Recipients Must Award Contracts to Responsible Contractors VIEWGRAPH #5 TITLE: Recipient Standards KEY POINTS: • Whether or not recipients certify their procurement system, they must comply with several recipient standards. • Recipients must have a written code of conduct for employees engaging in the award or administration of contracts. Employees may not be involved in such activities if a conflict of interest exists. (Institutions of higher education and other non-profit institutions do not have to have written codes of conduct.) • Recipients must have a means of settling all contractual and administrative issues arising out of procurements under the assistance agreements. The recipients must use sound business judgement and good administrative practice in resolving the issues. EPA will not substitute its judgment for that of the recipient unless it is primarily a Federal concern. • Recipients must have procedures to handle protests and resolve disputes surrounding procurements under assistance agreements. - The protester may pursue the protest with EPA if the recipient violates Federal law or regulations, or if the recipient fails to review a complaint. - EPA will become involved in these instances only after the protestor • exhausts all administrative remedies with the recipient. • Recipients must have written procedures for selecting a contractor. EPA may only assist in the selection by providing technical assistance (under 40 CFR §35.6550 (a)(7)(i)). 9.7 ------- VIEWGRAPH #5 (cont.) TITLE: Recipient Standards KEY POINTS: .• In order to obtain economies of scale and greater efficiency, recipients are encouraged to enter into intergovernmental agreements for the procurement of common goods and services. • Recipients are encouraged to use value engineering clauses (value engineering is a systematic and creative analysis of each contract item or task to ensure the overall lowest cost). These clauses should be used for construction projects if they are of sufficient size to offer reasonable opportunities for cost reductions. • Recipients must award contracts only to responsible contractors who have the ability to perform the work required. In determining whether a contractor is responsible, the recipient should consider such factors as integrity, compliance with policy, record of past performance, and financial and technical resources. In addition, the recipient must maintain a contract administration system to ensure that contractors perform according to the terms and conditions of the contract. • Recipients must review procurement requests to ensure purchases are necessary and not duplicative. • Recipients are encouraged to use Federal excess or surplus property instead of purchasing new property (under 40 CFR Part 31 only). 9.8 ------- CONTRACTOR STANDARDS UNDER SUPERFUND ASSISTANCE AGREEMENTS • Recipients Must Obtain Certain information from Contractors Surrounding: - Relationships with Potentially Responsible Parties - Conflict of interest - Independent Price Determination • Recipients Must Require Contractors to Comply with Certain Other Requirements VIEWGRAPH#6 TITLE: Contractor Standards Under Superfund Assistance Agreements KEY POINTS: • For Superfund assistance agreements, recipients must impose certain standards on contractors. • The recipient must require each prospective contractor to submit, with its bid or proposal: - Information on its financial and business relationship with all potentially • responsible parties (PRPs) at the site or sites with which the contractor will be associated. Potential contractors under a Core Program assistance agreement must report relationships with PRPs for all sites within the recipient’s jurisdiction. - Certification that the contractor has made a complete disclosure. - Statement that the contractor shall disclose any information discovered after submission of the bid or proposal or after award. • The recipient must require contractor notification if there is actual, apparent, or potential conflict of interest with a person working on a contract or having access to records. Recipients must include the following provisions in their contract (except for well-drilling, fence erecting, plumbing, utility hook-ups, security guard services, or electrical services): - Contractors shall not provide data obtained under a contract to any party other than EPA for five years after the completion of the contract. - Contractors shall not accept employment from any party, other than the Federal government, for work directly related to the site(s) covered under the contract for five years after its completion. The recipient, with EPA concurrence, can exempt the contractor from this requirement. • Recipients must require each contractor to include with its bid or proposal a certification that the price was determined without collusion. 9.9 ------- VIEWGRAPH #6 (cont..) TITLE: Contractor Standards Under Superfund Assistance Agreements KEY POINTS: Additionally, the recipient must require each contractor to comply with requirements regarding: - Financial management - Usage rates for equipment - Property management standards - Maintenance and retention of records. 9.10 ------- FULL AND OPEN COMPETITiON • Recipients Must: • impose Reasonable Requirements - Eliminate Geographic Restrictions - Utilize Written Specifications - Provide Adequate Public Notice - Foliow “Buy American” Requirements VIEWGRAPH #7 TITLE: Full and Open Competition KEY POINTS: • Recipients must conduct all procurement transactions in a manner that ensures full and open competition. • Recipients may use a prequalified list of persons, firms, or products provided they ensure that lists are current and include a sufficient number of sources. Further, recipients may not preclude potential bidders from qualifying for the list dunng the solicitation period. (Recipients create prequalified lists by conducting an “initial screening” of potential bidders to determine whether they meet basic requirements.) • Recipients must not impose unreasonable qualification requirements, unnecessary experience or bonding requirements, noncompetitive pricing practices or awards, organizational conflicts of interest, a specific “brand name” product without allowing “an equal” product, or any arbitrary action in the procurement process. • Recipients may not incorporate in-State or local geographical preferences in the evaluation of bids or proposals. Recipients may use geographic location as a criterion for architectural and engineering services as long as there remains an adequate number of qualified bidders. If a project benefits an Indian Tribe, recipients must comply with the Indian Self-Determination and Education Assistance Act of 1975. 9.11 ------- VIEWGRAPH #7 (cont.) TITLE: Full and Open Competition KEY POINTS:’ • Recipients must have written specifications that provide a clear and accurate description of the product or service being procured. These specifications cannot unduly restrict competition unless the features are necessary to: - Test or demonstrate a specific thing - Provide for necessary interchangeability of parts and equipment - Promote innovative technologies. • Recipients must provide adequate time (generally 30 days) between public notice and the deadline for submission of bids or proposals. The notice must be in publications that circulate over a reasonable area. 9.12 ------- PROCUREMENT METHODS • Small Purchase • Sealed Bid • CompetItive Proposals • Noncompetitlve Proposals VIEWGRAPH #8 TITLE: Procurement Methods KEY POINTS: • Depending upon the dollar value and type of goods or services to be purchased, recipients select one of four procurement methods. • Each of the four methods is covered in detail in the following slides. • The procedural provisions for procurements under the sealed bid and competitive proposal methods do not apply to assistance agreements awarded to institutions of higher education and other non-profit institutions, but these recipients must still maximize free and open competition. 9.13 ------- SMALL PURCHASE • is a Simple and informal Procurement Method • Requires Obtaining Quotes from an Adequate Number of Sources VIEWGRAPH #9 TITLE: Small Purchase KEY POINTS: • Small purchase is a relatively simple and informal means of obtaining property or services, that does not cost (in the aggregate) more than: - $25,000 for recipients subject to 40 CFR Part 31, 40 CFR Part 35, Subpart 0, and 40 CFR Part 35, Subpart M. - $10,000 for recipients subject to 40 CFR Part 33. • Recipients must obtain price or rate quotations from an adequate number of qualified sources. • Recipients may not divide a procurement into parts in order to meet the threshold for a small purchase. 9.14 ------- SEALED BID • Use for Construction or Remedial Action Contract • Use In Accordance wfth Certain Requirements: - Advertise for Bids - Defin Items or Services - Open Bids Publicly - Award Contract to Lowest Responsive and Responsible Bidder• Sealed Bid VIEWGRAPH#10 TITLE: Sealed Bid KEY POINTS: The sealed bid procurement method involves publicly soliciting bids and awarding a fixed-price contract to the lowest responsive and responsible bidder. The following conditions are necessary in order for a sealed bid procurement to be appropriate: - A complete, adequate, and realistic description of the goods or services is available. - Two or more responsible bidders are able to compete. - The procurement lends itself to a fixed-price contract and the award can be made on the basis of price. In order to use the sealed bid method, recipients must: - Publicly advertise the invitations for bid (IFB) and solicit bids from an adequate number of known bidders - Provide adequate time between the date of public notice and the date for submission of bids (generally 30 days) 9.15 ------- VIEWGRAPH #10 (cont.) TITLE: Sealed Bid KEY POINTS: - Include in the IFB: -- Specifications and pertinent attachments that allow bidders to properly respond (e.g., statement of work and design drawings and specifications). -- Terms and conditions of the contract (e.g., payment, delivery schedules, point of delivery, and acceptable criteria) -- An explanation of the method of evaluating prices and awarding the contract - Publicly open bids as prescribed in the IFB - Award the fixed price contract to the lowest, responsive, and responsible • bidder. • Recipients may reject all bids if there is a sound, documented reason that is in the best interest of the project. • Under a Supertund assistance agreement, sealed bid is the preferred method of procuring a construction or remedial action contract (except for architectural/engineering services and post-removal site control). Use of any other • method of procurement must be approved by the Award Official. 9.16 ------- COMPETITIVE PROPOSALS • Use when Specifications are hot Completely Defined and Price is not the Basis for Decision • Use in Accordance with Certain Requirements: - Publicize RFP and Evaluation FactoTs - Solicit Proposals from Adequate Number, of Sources - Conduct Evaluations Using Standard Method - Award Contract to Most Advantageous Party VIEWGRAPH #11 TITLE: Competitive Proposals KEY POINTS: Recipients may use the competitive method of procurement when conditions do not exist for a sealed bid procurement, i.e., a complete, adequate, and realistic description’is not available and price is not the principal determining factor. • Under this method, the recipient may award either a fixed-price or a cost-reimbursement contract. • When using the competitive method of procurement, recipients must: - Publicize the request for proposal (RFP) for a sufficient length of time. The RFP must include all evaluation faôtors and their relative weights and contain sufficient information to enable prospective bidders to prepare a proposal. - Solicit proposals from an adequate number of qualified sources. - Uniformly and objectively conduct technical reviews. Recipients must base their evaluation solely on the criteria stated in the RFP. - Negotiate with offerors judged to be in the competitive range to obtain their’ best and final offer. - Award the contract to the responsible firm whose proposal is most advantageous based on price and other factors. • Recipients may use qualifications-based competitive proposal procedures for architectural/engineering services. Using this process, the recipient selects the most highly technically qualified firms and requests them to submit proposals. Once the best technical proposal is selected, the recipient negotiates for fair and reasonable compensation. Price is not a selection factor using this process. 9.17 ------- NONCOMPETITIVE PROPOSALS • Used only if Other Methods are Infeasible • Must be Approved by the Award Official • Require a Corresponding Cost Analysis VIEWGRAPH #12 TITLE: Noncompetitive Proposals KEY POINTS: • Recipients may use noncompetitive proposals only if the other methods of procurement are not feasible because: - The goods or services are available from only one source - The emergency nature of the procurement will not allow the delay caused by competitive procurements. (Under Superfund, a declaration of an emergency under State law does not necessanly constitute an emergency under Superfund.) - After solicitation, competition is determined to be inadequate - The Award Official authorizes the use of a noncompetitive proposal. • When using a noncompetitive proposal, the recipient must conduct a cost analysis. (Cost analysis is covered in detail on viewgraph 18.) 9.18 ------- USE OF SAME ARCHITECT OR ENGINEER • Recipients May Use the Same Archftect or Engineer for Subsequent Phases of a Construction Project or Response Action • This Procurement Is Achieved Without Public Notice or Evaluation of Bids or Proposals VIEWGRAPH #13 TITLE: Use of Same Architect or Engineer KEY POINTS: • A recipient may retain the same architect or engineer for follow-on work as it used during the initial planning or design without further public notice or evaluation of bids. • For WWT assistance agreements this is acceptable provided:• - The recipient is satisfied with the qualifications and performance of the architect or engineer. - The recipient received a facilities planning or design assistance agreement. - The original procurement was conducted in accordance with EPA regulations. - The Award Official approves the noncompetitive proposal for reasons other than simply using the same firm for both phases. - The recipient attests that the original RFP stated the possibility of follow-on work, the architect or engineer was selected in accordance with specified procedures, and there is no conflict of interest or collusion. • For follow-on activities to be performed under a CERCLA remedial response cooperative agreement, the same architect or engineer may be used provided: - The original public notice stated the possibility of follow-on work. - The initial procurement complied with the requirements in 40 CFR Part 35, Subpart 0. 9.19 ------- VIEWGRAPH #13 (cont.) TITLE: Use of Same Architect or Engineer KEY POINTS:• • Where the recipient conducted the RI, FS, or design activities without EPA assistance, but is using CERCLA funds for follow-on activities, the recipient may use the engineer for subsequent work provided the recipient certifies: - Its compliance with the procurement methods in Subpart 0 - The contract’s compliance with EPA requirements. • Additionally, under 40 CFR Part 35, Subpart 0, where EPA conducted the RI, ES, or design activities but the recipient will assume the responsibility for subsequent phases of the response under a cooperative agreement, the recipient may use, with the Award Official’s approval, EPA’s engineer or architect without further public notice or evaluation. 9.20 ------- TYPES OF CONTRACTS • Fixed-Price • Cost Reimbursement • Time and Materials • Percentage-of-Construction Cost • Cost-Pius-Percentage-of-Cost VIEWGRAPH#14 TITLE: Types of Contracts KEY POINTS: Fixed-Price Contracts - Under a fixed-price contract, the recipient and its contractors agree on a price for the items or services to be provided. This price is then fixed, regardless of the actual cost, and can only be changed if a changeorder is negotiated. - This type of contract is used when an item or project scope is clearly defined, e.g., a construction project where the bidding documents include construction drawings and specifications. - Under Superlund, the recipient must award this type of contract when procuring a contract for removal support services, unless it obtains the Award Official’s written approval. • Cost Reimbursement - Under this type of contract, the fee is fixed at the inception of the contract and does not vary with actual costs incurred. The extent of the performance is limited to the estimated cost. - This type of contract should only be used when uncertainties do not permit costs to be estimated with sufficient accuracy to use a fixed-price contract. - The cost-plus-fixed-fee contract is the type of reimbursement contract most commonly used for obtaining services for other than constru tion projects. 9.21 ------- VIEWGRAPH #14 (cont.) TITLE: Types of Contracts KEY POINTS: Time and Materials - These contracts incorporate fixed labor hour rates and the total cost of materials and generally have a fixed cost ceiling. - Recipients may use time and materials contracts only if no other type of contract is suitable and if the contract includes a ceiling price that the contractor exceeds at its own nsk. Percentage-of-Construction Cost and Cost-Plus-Percentage-of-Cost - In these contracts the fee is determined by multiplying the actual cost incurred under the contract by a predetermined percentage. - Because these types of contracts may encourage contractors to incur costs to receive a higher fee, they are prohibited under any EPA-funded assistance agreements. 9.22 ------- CONTRACT PROVISIONS: GENERAL • Nature, Scope, and Extent of Work • Time Frame for Performance • Total Cost Of Contract • Payment Provisions VIEWGRAPH #15 TITLE: Contract Provisions: General KEY POINTS: Each contract must describe the: - Exact work to be performed under the contract. - Time frame for performance (refers to the delivery schedule or performance period for each deliverable). - Total cost of the contract. - Payment provisions for how and when the contractor will be paid. 9.23 ------- CONTRACT PROVISIONS: OTHER • Remedies for Contract Breaches • Termination Requirements • Labor Standards • Reporting Requirements Patent and Copyright Requirements • Recordkeeplng and Record Access Requirements • Violating Facilities Requirements • Energy Efficiency Requirements • Conflict of Interest Requirements • Model Contract Clauses VIEWGRAPH# 16 TITLE: Contract Provisions: Other KEY POINTS: In addition to the general contract provisions, there are other provisions which must be included in contracts awarded under assistance agreements. These provisions, including their applicability, are specified below: - Labor standards as cited in 40 CFR §31.36 (I) (3) - (6) for State, local, and Indian Tribal governments; 40 CFR §33.1016 for institutions of higher education and other non-profit organizations; or 40 CFR §35.6595 for • Superfund recipients - Reportinç requirements for all contracts - Copynçht and patent requirements for contracts other than construction contracts - Violatinç facilities requirements for all contracts in excess of $100,000 - Energy efficiency requirements for all contracts - Conflict of interest for contracts awarded under a Superfund cooperative agreement. 9.24 ------- VIEWGRAPH #16 (cont.) TITLE: Contract Provisions: Other KEY POINTS Also, model clauses (cited in 40 CFR 33.1030 (1987)) must be included in contracts awarded by recipients of Superfund assistance agreements and institutions of higher eduOation or other non-profit organizations. The individual provisions and their applicability are specified below: - Supersession - Pnvity of contract/subagreement • - Changes for construction contracts only - Differing site conditions for construction contracts only - Suspension of work for construction contracts only - Termination - Remedies - Price reduction for defective cost or price data for contracts negotiated between the recipient and its contractor in excess of $100,000; negotiated contract amendments or change orders in excess of $100,000 affecting the price of formally advertised, competitively awarded, fixed-price contracts; or any lower tier contract other than formally advertised, competitively awarded, fixed-price contracts - Audit and access to records - Covenant against contingent fee - Gratuities - Buy American for Wastewater Treatment construction contracts awarded under 40 CFR Part 35, Subparts E and I - Responsibility of the contractor - Final oavment . 9.25 ------- REQUIREMENTS FOR CONTRACTS AWARDED BY A CONTRACTOR • Contractors Must Comply with Certain Requirements In the Award of Subcontracts - Debarment and Suspension - LimitatiOns on Contract Award - Minority and Women’s Business Enterprises and Small Business - Specifications • Federal Cost Principles - Prohibited Contracts - Cost or Price Analysis - Profit Analysis - Contract Provisions VIEWGRAPH #17 TITLE: Requirements for Contracts Awarded by a Contractor KEY POINTS: • A contractor must comply with certain provisions when awarding contracts. • However, these provisions do not apply to contractors who procure materials to produce equipment, materials, or catalog, off-the-shelf, or manufactured items. • Contractors may not award subcontracts to parties on the “List of Parties Excluded from Federal Procurement or Nonprocurement Programs.” • Contractors may award subcontracts only to a responsible contractor and they must ensure that the subcontractor performs in accordance with the provisions of the contract. • Contractors must comply with the Federal requirements regarding minority and women’s business enterprises and small businesses as described on viewgraph 21. • Contractors must provide written specifications of the goods or services to be procured that are clear and accurate. Further, the contractor may not place undue restrictions on competition by specifying a “brand name” item unless they allow an “equal” product to be offered and describe the performance or other relevant requirements to be met. • The contractor must determine allowable costs in accordance with the cost principles applicable to the organization that awarded the contract. (These cost principles are identified in Module lii.) • Contractors may not use cost-plus-percentage-of-cost or percentage-of-construction cost types of contracts. 9.26 ------- VIEWGRAPH #17 (cont.) TITLE: Requirements for Contracts Awarded by a Contractor KEY POINTS: • Contractors must determine the reasonableness of the cost or price and profit when evaluating proposals for subcontracts. (These requirements are described on Viewgraph 18.) • Contractors must include the following clauses, as applicable, in their subcontracts: energy efficiency; violating facilities; patents, inventions, and copyrights; labor standards; conflict of interest; and the model clauses contained in 40 CFR §33.1030. (These clauses are described on Viewgraph 16.) 9.27 ------- COST AND PRICE ANALYSIS I BID3 BID2 • Methods of AnalyzlngBlds BID 1 • Cost Analysis Must Be Performed If: • Inadequate PrIce Competition Exists - Procurement Is Sole Source • Price Analysis Must Be Performed In All Other Instances VIEWGRAPH #18 TITLE: Cost and Price Analysis KEY POINTS: Before the analysis of the bids begins, recipients must make an independent estimate of the cost of the goods or services being procured. • Recipients must conduct a cost or price analysis for all procurement actions, including contract modifications. • A cost analysis is the review and evaluation of each element of contract cost to determine reasonableness, allocability, and allowability; A cost analysis must be performed when adequate price competition is lacking and for non-competitive procurements. A cost analysis is required for: - All negotiated contracts over $25,000 and all change orders regardless of price; - Procurements where the offeror is required to submit the elements of the estimated cost, e.g., professional, consulting, and architectural and engineering services, and - All negotiated contracts and change orders estimated to exceed $10,000 (for institutions of higher education and other non-profit organizations). • Price analysis is the process of evaluating a prospective price without regard to the separate cost elements and proposed profit. Price analysis is based on an adequate price competition, previous experience with similar work, established catalog or market price, law, or regulation. • Under 40 CFR Part 31 and 40 CFR Part 35, Subpart 0, price analysis is required when a cost analysis is not possible. For institutions of higher education and other non-profit organizations, a price analysis isconducted for a formally advertised procurement over $10,000 where there are fewer than three bidders. 9.28 ------- PROFIT ANALYSIS • Is Negotiated as Separate Element of Price • Determines Reasonable Profit: - Complexfty of the Work - Contractor’s investment - Amount of Subcontracting - Quaifty of Past Performance - industry Profit Rates 6 — — — 1 1 VIEWGRAPH #19 TITLE: Profit Analysis KEY POINTS: • Recipients must ensure, that it pays only a fair and reasonable profit or fee to its contractors. In procurements where there is no price competition and in all cases where a cost analysis is performed, recipients must negotiate profit as a separate element of the price. • In order to determine fair and reasonable profit, the recipient should consider: - Complexity of the work - Riskto the contractor, e.g., degree of risk involved in the type of contract (fixed-price versus cost-plus-fixed-fee) or reliability of the cost estimates - Contractors investment, e.g., equipment, overhead, direct labor - Amount of subcontracting - Quality of the contractor’s past performance, e.g., cost efficiency or timely performance - Industry profit rates in the surrounding geographical area for similar work. • Under assistance agreements awarded to institutions of higher education and other non-profit organizations, a profit analysis is not required if: - The recipient receives two or more bids for a formally advertised, competitively bid, fixed-price contract because the profit included is considered reasonable. - The recipient is purchasing off-the-shelf or catalog supplies. 9.29 ------- VIEWGRAPH# 20 CONSULTATION OF DEBARMENT AND SUSPENSION LIST TITLE: Consultation of Debarment and Suspension List KEY POINTS: • Recipients cannot make awards or permit awards (through contracts) to any party on the “List of Parties Excluded from Federal Procurement or Nonprocurement Programs.” • A copy of this list is available through the Grants Management and the Regional Counsel’s Office. • Recipients Must Not Award Contracts to Parties on the Debarment or Suspension List • Recipients Should Consult the List When Evaluating Bids or Proposals 9.30 ------- CONTRACTING WITH MBEIWBE AND SMALL BUSINESSES Comply with Six Affirmative Step8: - Include Qualified MBE WBE and Small Businesses on Solicitation Lists - Actively Solicit MBE/WBE and Small Businesses - Divide Procurements Into Small Tasks • Provide Delivery Schedules Which Allow MBE/WBE and Small Business Participation - Utilize the Small Business Administration and the Minority Business Development Agency - Require Prime Contractor to Follow These Affirmative Actions • Negotiate a Fair Share Objective VIEWGRAPH # 21 TITLE: Contracting With MBE/WBE and Small Businesses KEY POINTS: • A minority business enterprise (MBE) is defined as a business which is certified as socially and economically disadvantaged by the Small Business Administration or as a minority business enterprise by a State or Federal agency, or is an independent business concern which is at least 51 percent owned and controlled by minority group members who are U.S. citizens. • A women’s business enterprise (WBE) is a business certified as such by a State or Federal agency or one which is at least 51 percent owned by women who also control and operate it and are U.S. citizens. • Recipients of assistance agreements must comply with the six affirmative steps pertaining to MBE/WBE and small businesses (except for institutions of higher education and other non-profit organizations). Specifically, recipients must: - Include qualified MBEIWBE and small businesses on solicitation lists - Actively solicit these firms whenever they are potential sources - Divide the contracts into smaller tasks or quantities to permit maximum participation when economically feasible - Offer delivery schedules which allow MBEIWBE and small business participation when requirements permit - Use the services of the Small Business Administration and the Minority Business Development Agency of the Commerce Department - Require the contractor to take these affirmative steps when subcontracts are let by a contractor under an assistance agreement. 9.31 ------- VIEWGRAPH #21 (cont.) TITLE: Contracting With MBE/WBE and Small Businesses KEY POINTS: S • Recipients must also negotiate “fair share” objectives for all awards. These fair share objectives must be negotiated before the recipient awards any contracts. - The Clean Air Act requires, at a minimum, a 10% fair share objective on all clean air research awards. - At least an 8% fair share objective on all other awards. • Superfund Core Program assistance may be used for tasks which encourage the utilization of small, minority, and women’s businesses for Superfund projects. • Recipients are also encouraged to use labor surplus area business enterprises. 9.32 ------- LABOR STANDARDS REQUIREMENTS • EPA Must Ensure Compliance with Labor Standards • Recipients Must Include Labor Standards Requirements in Construction Contracts VIEWGRAPH # 22 TITLE: Labor Standards Requirements KEY POINTS: • EPA must ensure that all recipients of assistance agreements and their contractors comply with applicable labor standards. • Recipients must comply with the requirements for minimum wage (Davis-Bacon Act), standard work day (Contract Work Hours and Safety Standards Act), and the prohibition against the kickback of wages (Copeland Act) for the construction projects funded under an assistance agreement. The recipient is responsible for ensuring that contractors and subcontractors comply with the regulations and for reporting violations. • The recipient must address the following areas in its contracts for construction projects: - Compliance with Executive Order 11246, “Equal Employment Opportunity” -- All construction contracts over $10,000 - Compliance with the Copeland “Anti-Kickback” Act -- All contracts and subgrants for construction or repair. - Compliance with the Davis-Bacon Act -- Construction contracts over $2,000 when required by legislation; i.e. Construction Grants, Superfund, and SRF. - Compliance with the Contract Work Hours and Safety Standards Act - - Construction contracts over $2,000, and other contracts over $2,500 which involve employment of mechanics as laborers. • For construction contracts under Superfund assistance agreements, the recipient is required to include a copy of EPA Form 5720-4, “Labor Standards Provisions for Federally Assisted Construction Contracts.” 9.33 ------- BONDING AND INSURANCE REQUIREMENTS • Apply to Assistance Agreements forConstruction • Are Utilized to Secure The Awarding Agency’s interest • Differ for Contracts Which are Less Than or Equal to $100,000 and Those Which are Greater Than $100,000 • May Exceed the Recipient’s internal Bonding and Insurance Requirements VIEWGRAPH # 23 TITLE: Bonding and Insurance Requirements KEY POINTS: • Recipients and contractors with assistance agreements for construction must conform to certain bonding and insurance requirements. Adequate bonding and insurance requirements allow EPA to secure its financial interest in construction projects, i.e., guarantee the return of EPA’s financial stake in the event the project is not completed. • For contracts of $100,000 or less, the recipient incorporates its own internal bonding and insurance requirements into the contract. • For contracts over $100,000, the recipient may be allowed to use its own bonding and insurance requirements only if EPA deems these requirements sufficient for secunng the Federal financial interest in a construction project. If EPA disallows such use, the recipient must incorporate the following: - A “bid guarantee” from each bidder equivalent to five percent of the bid price. The “bid guarantee” must include a firm commitment such as a bid bond, certified check, or other negotiable instrument. - A “performance bond” for 100 percent of the contract price. The performance bond guarantees the contractor will finish the work. - A “payment bond” for 100 percent of the contract price. The payment bond guarantees the contractor will pay the subcontractors. • In addition to the above requirements, recipients of Superfund assistance must require their contractors to obtain pollution liability insurance and accident/catastrophic loss insurance. If the contractor cannot obtain adequate pollution liability insurance, EPA may insure the contractor for liabilities other than those arising out of the contractors gross negligence. 9.34 ------- RECORDKEEPING REQUIREMENTS FOR PROCUREMENT ACTIONS • General Requirements • Requirements for Contracts In Excess of $25,000 VIEWGRAPH # 24 TITLE: Recordkeeping Requirements• For Procurement Actions KEY POINTS: Recipients must maintain historical records of a procurement. At a minimum, these records will include the procurement method rationale, the basis for contract type, the basis for the contractor price, and the contractor selection/rejection rationale. For procurements in excess of $25,000 (or $10,000 for recipients subject to 40 CFR Part 33), recipients must maintain records or files that document the basis for the contractor selection; a written justification for selecting the procurement method; a written justification for use of any specification which does not provide for maximum free and open competition; a written justification for the choice of contract type; and the basis for the award cost or price, including documentation of negotiations and a copy of the cost or price analysis. 9.35 ------- REQUIRED PROCUREMENT REPORTS • Report of Construction Contracts • Department of Labor (DOL) Reports • MBE/WBE Reports VIEWGRAPH# 25 TITLE: Required Procurement Reports KEY POINTS: Within ten calendar days after the award, recipients must notify the Department of Labor Regional Office of Compliance, in writing, of each construction contract which has, or is expected to have, an aggregate value of over $10,000. The notice shall include the name, address, telephone number, and employee identification number of the construction contractor; the amount of the award; the estimated starting and completion dates; the project number, name, and site location of the project. Recipients must report the use of MBE and WBE firms by submitting a completed Minority and Women’s Business Utilization Report (SF-334) to the Award Official quarterly or annually. This report is due either within 30 days after the end of each Federal fiscal quarter or the Fiscal year, depending on the program and type of recipient. 9.36 ------- ------- PROPERTY MANAGEMENT BY THE END OF THIS MODULE YOU WILL BE ABLE TO: • Define Property According to Its Various Classifications • Describe the Requirements Governing the Acquisition, Management, and Disposition of Equipment and Supplies • Describe the Requirements Governing the Acquisition, Use, and Disposition of Real Property • Describe the Requirements Governing Relocation Assistance Providod under Certain Assistance Programs • Describe the Requirements Governing Ownership, Use, and Disposition of Intangible Property Created or Developed with EPA Assistance VIEWGRAPH # I TITLE: Property Management KEY POINTS: • This module begins by defining the three classifications of property that can be acquired under an assistance agreement: personal property, real property, and intangible property. • The module covers the requirements for acquiring, managing, and disposing of each type of property under EPA assistance programs, including requirements specific to Superfund. The discussion also addresses theseS requirements as they vary in their application to different types of recipients, e.g., States versus non-profit organizations. • In conjunction with the acquisition of real property, this module will cover the requirements for the provision of relocation assistance. • The regulations pertinent to this discussion are: 40 CFR Part 30 for institutions of higher education and other non-profit organizations; 40 CFR Part 31, for assistance agreements to States, local governments, and Indian Tribes; 40 CFR Part 35, Subparts M arid 0, for assistance agreements awarded with CERCLA funds; 40 CFR Part 35, Subpart I, for Waste Water Treatment Construction grants; and 49 CFR Part 24 for regulations and procedures for complying with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. • Additionally, EPA ’s Personal Property Management Policy establishes • poUcies for the management and control of its personal property. 10.1 • ------- CLASSIFICATION OF PROPERTY Personal Property Real Property Intangible Property VIEWGRAPH #2 TITLE: Classification of Property KEY POINTS: There are two types of personal property: equipment and supplies. - For all EPA assistance programs awarded to States, local governments, and Indian Tribes, equipment is defined as tangible, non-expendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. For all assistance agreements awarded to States, local governments, universities, non profits, and Indian Tribes prior to October 1, 1988 (the effective date of 40 CFR Part 31), and Superfund assistance agreements awarded on or prior to January 27, 1989 (the effective date of 40 CFR Part 35, Subpart 0, interim final rule), equipment is defined as items with a useful life of at least two years and an acquisition cost of $1,000. - Supplies under all EPA assistance programs are defined as tangible personal property other than equipment. • Real property under all EPAassistance programs is defined as land, including land improvements, structures, and iight-of-ways, excluding movable machinery and equipment. Intangible property includes copyrights, rights in data, and patents. 10.2 ------- ACQUISITION OF PERSONAL PROPERTY ALL ASSISTANCE AGREEMENTS - Purchase must be Authorized in the Assistance Agreement - Acquisition must Occur During the BudgeVProject Period SUPERFUND ASSISTANCE AGREEMENTS - Recipient must Consider Alternative Means of Obtaining Equipment - Costs must be Charged by Site, Activity, and Operable Unit (As Applicable) VIEWGRAPH #3 TITLE: Acquisition of Personal Property KEY POINTS: In order to purchase personal property under an assistance agreement, it must first be authorized in the agreement. • Recipients may purchase property only during the budget or project period of the assistance agreements. • In addition to the requirements governing the acquisition of personal property under all assistance agreements, 40 CFR Part 35, Subpart 0, places additional requirements upon Superfund assistance agreement recipients. One key concern is that the recipient consider three methods for obtaining property: purchase with recipient funds and charge EPA a fee based on an approved usage rate; borrow Federally owned property; or use CERCLA funds. - If a piece of equipment is to be obtained using CERCLA funds, the recipient must conduct a cost comparison analysis to determine the most cost effective means of obtaining it, i.e., lease, use contractor services, or purchase. This analysis must be submitted to EPA for approval before obtaining the equipment. - All costs associated with obtaining property under a Superfund assistance agreement must be recorded by site, activity, and operable unit, as applicable, except activities under pre-remedial or Core Program cooperative agreements. • The title to personal property purchased under an assistance agreement is always vested with the recipient; however, EPA reserves the right to transfer title to another entity within 120 days of the end of the project. • When Federally owned property is provided to the recipient, the title remains with the Federal government. • The title to supplies vests with the recipient. 10.3 ------- MANAGEMENT OF PERSONAL PROPERTY • Maintain Adequate Records • Maintain Adequate Safeguards Against Loss, Damage, or Theft • Conduct Physical Inventory • Ensur. Proper Maintenance VIEWGRAPH #4 TITLE: Management of Personal Property KEY POINTS: States that receive non-Superfund assistance agreements will manage property according to State laws and procedures. Other recipients such as local and Indian Tribal governments, institutions of higher education, and other non-profit organizations must comply with EPA regulations. Recipients of Superfund assistance agreements may use their own property management system if their system meets the standards set in 40 CFR Part 35, Subpart 0. Recipients must maintain records for personal property obtained with assistance funds. For equipment, these records must include a description of the equipment, serial number, source, who holds title, acquisition date, cost, percentage of Federal interest in the cost, location, use, condition, and ultimate disposition data. All Federally owned equipment must be identified as Federal property. For records of supplies, information must be provided in as much detail as practical. • Recipients must conduct a physical inventory at least every two years and reconcile the results with the property records. (Recipients must conduct an annual inventory for Federally owned property.) • Recipients must have a control system in place to safeguard property from loss, damage, or theft and have procedures to investigate any such incidents. • Recipients must ensure adequate maintenance of the property, e.g., servicing automobiles or calibrating sampling devices. 10.4 ------- USE OF EQUIPMENT NOI4SUPERFUND ASSiSTANCE AGREEMENTS • Us. Equlpmànt for Program or Project as Long as Needed • Mak. Equipment Available for other Federally Supported Programs or Projects SUPERFUND ASSISTANCE AGREEMENTS • Document Use by Site, Activity, and Operable Unit (As Applicable) VIEWGRAPH #5 TITLE: Use of Equipment KEY POINTS: States that receive non-Superfundassjstance agreements will use equipment according to State laws and procedures. Other recipients must comply with EPA regulations. - Equipment must be used on the project for which it was purchased, even after the project is no longer supported by Federal funds. -. Recipients can also use equipment on other Federally supported projects; however, this use cannot interfere with the work on the project for which the equipment was purchased and preference must be given to projects funded by the awarding agency. If applicable, user fees can be charged to other projects. Recipients of Superfund assistance agreements must document the use of property by site, activity, and operable unit, as applicable. If equipment is used on sites, activities, or operable units to which the equipment cost was not originally charged, the recipient must develop and use an EPA approved usage rate to allocate the cost of the equipment. 10.5 ------- DISPOSITION OF EQUIPMENT: NON-SUPERFUND RECIPIENT CATEGORIES OBLIGATiON TO Slatss Dstsnnln.d by Slats Law EPA Non. Local and Indian Tubal Gov.rnjn.ig Equlpmwvt ha. a Fair Markst Valu. of Ls.. Than $5000 Equlpnwnt ha. a Fair Markat Valu. Non. Raimbur.. EPA lnatttutf on, of High., Education or Olh.t NOn.PTOSI Organbatlon. Over $5000 Non .Exp.ndat,l. Pa,.onaI Pmpe.ly Purchaa ,d for G. at. , Than $1000 Par Unit Expandabi. Pr.on.l Property which baa a F.lr Markst Valu. of Raimbur.. EPA Raimburo. EPA VIEWGRApH #6 TITLE: Disposition of Equipment: Non-Superfunci KEY POINTS: States will dispose of equipment according to State laws and procedures. Other recipients must comply with EPA regulations. -. When equipment obtained under a non-Superfund assistance agreement is no longer needed for that project, the recipient may use it on another project that is or has been supported by a Federal agency. If the recipient does not need the equipment , it must then follow the applicable procedures to dispose of the equipment. • Under 40 CFR Part 31.32, local and Indian Tribal governments, when disposing of equipment, must determine the current per unit fair market value of the equipment. - If the value is less than $5,000, then the recipient has no obligation to reimburse EPA. It may retain the equipment, sell it, or otherwise dispose of it. - If the value is greater than $5,000, the recipient may retain the equipment for its own use or sell the equipment. However, the recipient must reimburse EPA for its proportionate share of the current market value or the sale price. 10.6 ------- VIEWGRAPH #6 (cont.) TITLE: Disposition of Equipment: Non-Superfund KEY PO!NTS: Under 40 CFR §30.532, university and non-profit recipients must assess the value of property to be disposed and reimburse EPA as follows: - If the property was purchased for more than $1,000 per unit and is nonexpendable, the recipient must reimburse EPA for its proportionate share of the current fair market value. - If the purchase price of the nonexpendable property is less than $1,000, the recipient may either keep the property or sell it and keep the proceeds. Exception: profit-making organizations must reimburse EPA for its proportionate share of the current fair market value. - If the equipment is expendable, the fair market value is used to determine the obligation to EPA. For expendable equipment with a fair market value of $1,000 in aggregate, the recipient must reimburse EPA for its proportionate share.. • Any recipient may claim the cost of disposal against EPA’s proportionate share that would otherwise be reimbursed. • If the equipment is Federally owned, the recipient must request disposition instructions from EPA. 10.7 ------- VIEWGRApH #7 DISPOSITION OF EQUIPMENT: SUPERFIJND EQUIPMENT NO LONGER NEEDED OR AT THE END OF THE PROJECT PERIOD TITLE: Disposition of Equipment: Superfund KEY POINTS: Under a Supertund assistance agreement, equipment disposition must occur either when the equipment is no longer needed on the project for which it was originally purchased or at the end of the project period. These criteria differ from those under a non-Superfund assistance agreement where the equipment can be used on any other Federally supported project after it is no longer needed on the original project. • At disposition, the recipient must prepare an inventory report. This report contains a description of all equipment purchased with CERCLA funds; the condition of the equipment; verification of the equipment’s current use and the continued need for the equipment by site, activity, and operable unit; notification of lost or stolen property; and a request for disposition instructions. (If an inventory report is being prepared at the end of the project period, it must also contain a description and value of remaining supplies.) • An additional item that must be documented in the inventory report is an analysis of the cost-effectiveness of leaving the equipment in place versus removing the equipment and disposing of it. This analysis serves as the basis for determining the final disposition of the equipment purchased under the assistance agreement. - If it is more cost effective to leave the equipment in place, the recipient must recommend that course in the inventory report. 10.8 ------- VIEWGRAPH #7 (cont..) TITLE: Disposition of Equipment: Superfund. KEY POINTS: - If it is more cost effective to remove the equipment, the recipient must determine the residual fair market value of the equipment. -- If the value of the equipment is less than $5,000, the recipient may use it on an other CERCLA site. However, at the time of final disposition, the recipient must reimburse Superfund for EPA’s interest in the equipment. -- If the residual fair market value is $5,000 or more, the recipient must request disposition instructions in the inventory report. There are four options for disposal: use the equipment on another CERCLA project, keep the equipment (subject to concurrence between EPA and the recipient), sell the equipment, or return the equipment to EPA. Each of these options necessitates appropriate reimbursement to the original site or the Trust Fund, as applicable. If the equipment is Federally owned, the recipient must obtain disposition instructions from EPA. 10.9 ------- DISPOSITION OF SUPPLIES: NON-SUPERFUND SUPPUES NOT NEEDED ON ANOThER FEDERAL PROJECT OR AT ThE END OF ThE PROJECT PERIOD DstsrrnIn. Valus VIEWGRAPH #8 TITLE: Disposition of Supplies:. Non-Superfund KEY POINTS: • Disposition of supplies needs to occur when the assistance agreement terminates, or when the project ends and the supplies are not needed on any other Federally supported project. • Similar to the regulations governing the disposition of equipment, $5,000 is the threshold that determines what procedures must be followed for the disposition of supplies. The value of supplies is assessed as the aggregate fair market value of the residual inventory of unused supplies. - If the value is under $5,000, the recipient may keep them and does not have to compensate EPA. - If the value is over $5,000, upon final disposition, the recipient must compensate EPA for its interest in the supplies. 10.10 ------- DISPOSITION OF SUPPLIES: SUPERFUND END OF ThE PROJECT PERIOD’ $5,000 or Mo,. U .. on h.r 1 CERCLAPro3.ct S 4 • K..porS.ut ‘I , I R.Imburs. L K.sporS.II ____________ ________ R mburss Original NoObIIgaUon VIEWGRAPH #9 TITLE: Disposition of Supplies: Superfund KEY POINTS: • Recipients must dispose of supplies purchased under a Superfund assistance agreement at the end of the project period. • At this time, the recipient must determine the aggregate fair market value of the supplies. If the value is less than $5,000, the recipient may use the supplies on another CERCLA project. If the supplies are not needed on another CERCLA project, the recipient may either keep or sell the supplies with no obligation for reimbursing Superfund. • If the value of the supplies equals or is greater than $5,000, the recipient has three options for disposition: - Use the supplies on another CEACLA project and reimburse the project for which the supplies were purchased. - ‘ Keep the supplies and reimburse Superfund for EPA’s interest in the supplies. This option must be agreed upon by the recipient and EPA. - Sell the supplies and reimburse Superfund for EPA’s interest in the supplies. S U.s on hsr CERCLA Pro4sc* 10.11 ------- REAL PROPERTY ACQUISITION • Gain Approval In Assistance Agreement • Acquir. Under Two Types of Agreements: - Waste Water Treatment Construction Grants - Sup.rfund Assistance Agreements • Title Vests with Recipient VIEWGRAPH #10 TITLE: Real Property Acquisition KEY POINTS: Generally, EPA authorizes the acquisition of real property under two types of assistance agreements: Waste Water Treatment Construction grants and Superfund cooperative agreements. The acquisition of real property must be approved in the assistance agreement or an amendment to the agreement. - Under the Clean Water Act, EPA awards Waste Water Treatment Construction grants which authorize the acquisition of real property when it is an integral part of the treatment process or when it will be used for ultimate disposition of residues resulting from treatment. (The regulation governing the acquisition of real property under Construction Grants is found in 40 CFR Part 35, Subpart I.) - Under Superfund agreements, the acquisition of real property is approved if EPA determines that, based on the remedy selection, an interest in real property must be acquired in order to conduct the remedial action. (The regulation governing the acquisition of real property under Superfund assistance agreements is found in 40 CFR Part 35, Subpart 0.) The acquisition of real property under both Waste Water Treatment Construction grants and Superfund assistance agreements is also subject to the provisions of 49 CFR Part 24, “Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs.” (Prior to March 2, 1989, this regulation governing compliance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 was found in 40 CFR Part 4.) Under all assistance agreements, the title to real property must be vested in the recipient or sub-grantee upon acquisition. 10.12 ------- VIEWGRAPH #10 (cont.) TITLE: Real Property Acquisition KEY POINTS: For Superfund assistance agreements, CERCLA, Section 104 (j) requires a State or Indian Tribe, (to the extent of its legal authority), to provide the assurance that it wilt acquire and hold the real property interest before receiving a Remedial Action cooperative agreement. If necessary, the Federal government may acquire the interest in the real property and require the State or Indian Tribe, (to the extent of its legal authority), to agree to accept transfer of the acquired interest before completion of the response action. • regulation requires the Indian Tribe to acquire or assume title to the real property only “to the extent of its legal authority.” This exception is intended primarily to accommodate an Indian Tribe that does not have the legal authority to acquire real property. 10.13 ------- REAL PROPERTY USE AND DISPOSITION • Use for Authorized Purpose • Disposal Options - Retain - S.ll Property - TrwisferT lt i o VIEWGRAPH #11 TITLE: Real Property Use and Disposition KEY POINTS: • Real property is to be used only for the purpose authorized in the assistance agreement, and should be retained only as long as it is needed. • When the real property is no longer needed for the original purpose, the recipient must request disposition instructions from EPA. There are three alternative methods available to the recipient for disposing of real property: - Retain and compensate EPA for its share. Under 40 CFR Part 31, EPA will be compensated according to its percentage of interest in the original purchase applied to the current fair market value of the real property. - Sell the real property and compensate EPA for its share. EPA will be compensated according to its percentage of interest in the original purchase applied to the proceeds of the sale, minus reasonable selling expenses. - Transfer title to EPA or a third-party approved by EPA. The recipient will be compensated according to its percentage of interest in the original purchase applied to the current fair market value of the property. 10.14 ------- RELOCA11ON ASSISTANCE VIEWGRAPH #12 • Provided as Part of Real Property Acqulsftion • Provisions identified under 49 CFR Part 24 TITLE: Relocation Assistance KEY POINTS: • The acquisition of real property and/or the implementation of a response action at a site can necessitate the relocation of residents. In these instances, there are regulations governing the requirements and procedures for conducting relocation activities. • 49CFR Part 24covers: - General relocation requirements, including relocation notices; comparable replacement dwellings; relocation planning, advisory services, and coordination; eviction for cause; claims for relocation payments; and treatment of relocation payments - Payments for moving and related expenses, including payment for actual reasonable expenses, fixed payment, and re-establishment expenses for residential and non-residential moves - Replacement housing payments for varying periods of time - Payment of expenses for mobile homes. 10.15 ------- INTANGIBLE PROPERTY VIEWGRAPH #13 • EPA Retains Rights to: - Copyrighted Materials • Products Developed or Purchased under Assistance Agreements TITLE: Intangible Property KEY POINTS: • EPA reserves a royalty-free, nonexciusive, and irrevocable license to reproduce, publish, or otherwise use intangible property, i.e., copyrights and patents: - Developed under an assistance agreement - Purchased with assistance agreement support. • 40 CFR Parts 30, 31 and 35, Subpart 0 require that all contracts let by the recipient must include notice of EPA’s requirements with regard to the development or acquisition of intangible property. 10.16 ------- ------- CLOSEOUT OF ASSISTANCE AGREEMENTS BY ThE END OF ThiS MODULE YOU WILL BE ABLE TO: • Understand the Process For Closeout of Assistance Agreements • Describe the Roles and ResponsibIlities During Closeout. VIEWGRAPH # 1 IITLE: Closeout of Assistance Agreements KEY POINTS: This module describes the major steps of the closeout process for EPA program and project-type assistance agreements and indicates unique closeout procedures for: (1) Waste Water Treatment construction grants (WWT construction grants), (2) Continuing Environmental Support grants, and (3) Superfund Cooperative Agreements (Superfund CAs). This module also describes the specific roles and responsibilities of EPA staff and recipients during closeout. 11.1 ------- PURPOSE OF CLOSEOUT Proper Closeout Ensures the Completion of All: Technical Work VIEWGRAPH # Administrative Work TITLE: Purpose of Closeout KEY POINTS: • The closeout process is a systematic method of ensuring that all technical work (e.g. product development, construction) and administrative requirements (e.g., review of FSRs) have been finalized. • Closeout is performed when a project ends due to completion or termination. A project may be terminated because of insufficient funds, complications with the response action, or, in the case of a Superfund project, a change in the lead (i.e., from State to Federal). • Closeout ensures a final accounting of expenditures and a determination from • the Proget Officer that all technical work has been completed and is satisfactory. Closeout also ensures that any remaining unliquidated obligation balances are promptly deobligated for possible use on funding other projects. I .*d 2 11.2 ------- SOURCES OF REQUIREMENTS • 40CFRPart31,Subpar D • 40 CFR Part 30, Subpart H • 40 CFR Part 35, Subpart 0 S VIEWGRAPH # 3 TIE: Sources of Requirements r EY POINTS: 40 CFR Part 31 provides closeout requirements for grants to States, Indian Tribes, and local governments. Specifically, it states that EPA staff must.notify the recipient before the end of the last budget period and provide forms the recipient must file during the closeout process. It also describes other activities which must precede a closeout: (1) receipt of required reports, (2) disposition or recovery of Federally owned assets, and (3) adjustment of the award amount and the amount of Federal cash paid the recipient. • 40 CFR Part 30 provides closeout requirements for universities, hospitals, and other non-profit organizations. • 40 CFR Part 35 Subpart 0 lists the requirements for closeout of a Superfund CA. • Chapter 40 of the EPA Assistance Administration Manual (AAM) also provides policies and procedures for closeout. • A task force is currently working to develop new agency policy on closeout for Construction Grants, program and project grants, and Superfund GAs. Manual Chapter 40 F R S a, tO 11.3 ------- TIMING OF CLOSEOUT TYPE OF AGREEMENT TIMING OF CLOSEOUT -- Project Or.,*s, Including WWT Construction When Progect Ends Contlnidng Environmental When Last Continuation Agreement Programs Ends Pra-Bem.dlai CA When PA & SI Actlvftl.s Are Completed SlngI. Sits CA When Work I. Conipl.t.d Multi-Sits CA When Work is Complstsd at Each Site/Activity and upon Completion of AU Site ActIVities Car. Program CA When Managerial and Administrative Responsibilities Have Been Completed All Whsn terminated or annviled VIEWGRAPH# 4 TITLE: Timing of Closeout KEY POINTS: • Formal closeout can occur only when all parties are satisfied with the final product (e.g., that the facility is working as designed), all eligible costs have been accepted, all repayments have been received, all grant conditions have been met, and all issues resulting from audits have been resolved. The timing of closeout depends primarily on the type of agreement or contract. The viewgraph illustrates when closeout of various types of agreements should take place. • Closeout of most non-Superfund project grants, including WWT construction grants, begins when the project has been completed satisfactorily. • Closeout of Continuing Environmental Program grants begins on the date the last Continuation Agreement expires. • Closeout of Superfund Cooperative Agreements occurs at the following times: - Pre-remedial - when all preliminary assessment] site inspection (PA/SI) activities have been completed or terminated at all sites. - Single-Site CA - when all activities covered by the statement of work (SOW) are completed or terminated at that site. - Multi-Site Cooperative Agreement (MSCA) - is somewhat different from other CAs. Closeout of an individual site covered by the MSCA ôccurs when all activities at that site are completed or terminated. Closeout of the MSCA occurs when all activities at all sites covered by the SOW have been completed or terminated. - Core Program Cooperative Agreements (CPCAs) - when the State has completed the activities specified in the SOW. 11.4 ------- lN ATING CLOSEOUT To Inflate Cioseout GMOs Must: • Obtain “Status Report of Projects Completed But Not Closed Out” • Ensure the Accuracy of the Status Report • Send “Reminder Lefter” For Projects Scheduled to End In 90 Days • Update GICS When the Status of Project Changes VIEWGRAPH # 5 TITLE: Initiating Closeout Y POINTS: Periodically, the grants management office (GMO) obtains and reviews the “Status Report of Projects Completed But Not Closed Out” through the Grants Information Control System (G ICS). For projects scheduled to end in 90 days, the GMOs should prepàre and send a “Reminder Letter to remind the recipient and Project Officer of the upcoming closeout, and update GICS when the status changes. 11.5 ------- DELIVERY OF PRODUCTS AND REPORTS ThE RECIPIENT MUST DEUVER: VIEWGRAPH # 6 TITLE: Delivery of Products and Reports KEY POINTS: • In accordance with the assistance agreement, the recipient must deliver a satisfactory final product(s), including all deliverables. • The GMO must receive the Project Officer’s assurance of satisfactory completion of all program requirements and ensure the receipt of all required reports. These reports may include: - Financial Status Report - SF 269 - Final Progress Report - Federally owned Property Report - Invention Report - EPA Form 3340-3 - Final Request for Payment - SF 270 - Outlay Report and Request for Reimbursement - SF 271 • Satisfactory Final Product • Output Commitments • Required Reports 11.6 ------- EVALUATION OF FINAL REPORTS • Final Progress Report • Federally Owned Property Report I Disposition of Property • Final Financial Status Report • Invention Report • Other Required Reports VIEWGRAPH # 7 TITLE: Evaluation of Final Reports KEY POINTS: The final stage in the closeout process involves EPA’s review of the final reports. If inaccuracies or problems are identified during this stage, the Project Officer/GMO must work with the recipient to resolve these problems. If the final report will be published, it must be reviewed through the EPA publication review process and the Project Officer and the Award Official are responsible for ensuring this process is used. For all Final Progress Reports accepted for publication, the Project Officer submits a Technical Data Report (EPA Form 2220-1) to the appropnate grants specialist and submits a Technical Data Report and two copies of the Final Progress Report to the Headquarters library. • Before closeout can be completed, the recipient must ensure the proper disposal of all Federally owned property. Once the GMO receives the recipient’s list of Federally owned property, it must notify the recipient of property disposition requirements, if applicable. • Final Financial Status Reports must reflect the proper reconciliation of all accounting data including all necessary cash and cost adjustments. Suôh adjustments may include settlement of obligated yet unexpended funds, payments owed EPA, and requests for reimbursements. The grants specialist is responsible for reviewing the final Financial Status Report and providing copies to the Project Officer and FMO for their review. • Other required reports, including progress reports, are reviewed according to program-specific policies and procedures and terms/conditions of the Assistance Agreement. S S S S 11.7 ------- VIE WGRAPH # 7 (cont.) TITLE: Evaluation of Final Reports KEY POINTS: After all applicable final reports have been received and reviewed, the GMO will prepare a closeout amendment using the Assistance Adjustment Notice (EPA Form 5700-42), which indicates the grant/CA is complete. At this time the GMO notifies the FMO to deobligate any unhiquidated obligation balances. If a recipient owes EPA funds, the recipient has 30 days to pay this debt. The GMO will inform the FMO of the debt in order that an accounts receivable can be established in IFMS. The assistance agreement cannot be closed out until the debt is paid. 11.8 ------- CLOSEOUT OF WWT CONSTRUC11ON GRANTS RECIPIENT REQUIREMENTS VIEWGRAPH # 8 TILE: Closeout of WWT Construction Grants / Recipient Requirements KEY POINTS: Closeout procedures for WWT construction grants vary somewhat from those that apply to most other EPA assistance programs. The GMO’s role will vary depending on what has been delegated to the States in accordance with Regional procedures. • For example, the Final Progress Report in construction grants is the Project Performance Certification (PPC) in which grantees certify that the WWT is operating as designed. • Delegated States review and validate the PPCs and review the final payment request which includes the States’ final eligible cost determination based on the final “Outlay Report and Request for Reimbursements” (SF-271) and any grant amendments. • Delegated States submit final payment requests to EPA (Program and GMO offices); GMO processes the final payment request (which includes processing any grant amendments and notifying FMOs regarding increases or decreases to grant amounts) and prepares the submission to the EPA Office of the Inspector General (EPA OIG) according to cntena established by the EPA 01G. • For more information, refer to the Handbpok for Procedures . Construction Grants Program for Municipal WWT5, and Regional procedural manuals. 11.9 ------- CLOSEOUT OF SUPERFUND CA• Category Recipient Role EPA Role Uquldatlon o( Unobllgat.d Fund. • Rsquests Amendments • Amends CA Technical Issue. • writes and Submit. Final Tschnlcal Report • Follows Through on DSIICIS nCIS. Financial Issue. • Submit. Final Financial Report • • • Assur.. All Audit Exceptions A,. Resolved s.ttle. aming. and Payment. RevIsw. and Approves Financial Status Report L.gal Issues • • Complete. Cost R.cov.,y Requirements Provld.s Notification of Settlements • RS .OIVS. ArY DispUtes Institutional • Provides Assuranc, that • t. Ciosur. In File. Maintain. Official Records Institutional Control., If Rsquirsd, ars In Place • VIEWGRAPH # 9 TITLE: Closeout of Supertund CA KEY POINTS: This viewgraph illustrates the closeout requirements for Supertund CAs. Many closeout requirements are the same for Superfund and non-Superfund assistance agreements. The pnmary difference between closeout of Superfund and non-Superfund agreements is the record retention requirement. • Under Superfund CAs, the recipient must keep all records for at least ten years after the submission of the final Financial Status Report, unless stated otherwise in the cooperative agreement, and must receive the Award Official’s • approval before destroying any original file documents. For those agreements selected for audit during the ten-year penod, the recipient must keep the documents until the audit is completed and all issues resolved, if the activities go beyond the ten-year period. Normally, record retention requirements extend for only three years under other EPA assistance programs. • Supertund Assistance Agreements are subject to audit as are non-Superfund AAs. However, audit is not a pre-requirment prior to closeout. 11.10 ------- CLOSEOUT OF CONTINUING ENVIRONMENTAL PROGRAM AGREEMENTS Project Officer Prepares Closeout Evaluation • GMO Conducts Financial Status Report Review VIEWGRAPH # 10 TITLE: Closeout of Continuing Environmental Program Agreements KEY POINTS: Closeout of Continuing Environmental Program grants will be completed by EPA within 180 days following the end of the approved budget period. • The Project Officer evaluates the recipient’s performance to determine if all objectives, outputs, and reporting requirements as set forth in the assistance agreement have been satisfactorily met. The Project Officer prepares a written end-of-year closeout evaluation of the recipient’s performance within 90 days • following the end of the budget period. The evaluation is signed by the appropriate program Division Director and a copy is provided to the recipient and • the GMO for inclusion in the official administrative file. • The GMO must ensure that the recipient has submitted the Financial Status Report (FSR) within 90 days of the end of the budget period. The GMO will coordinate a review of the FSR for conformance of expenditures reported to the total amount authorized in the assistance agreement. • The GMO must follow the Agency’s carryover policy (EPA Policy Statement No. 88-09) to ensure that any remaining funds are carried forward to the next year. • The Project Officer or the grants specialist may initiate a request for audit by the Office of the InspectorGeneral (OIG) when the recipient’s performance or management of grant funds is suspect. If an audit is to be conducted by the OIG, theofficial file will not be closed until all audit exceptions have been reconciled. 11.11 ------- AUDITS MODULE XII ------- AUDITS BY THE END OF This MODULE YOU WILL BE ABLE TO: • Describe the Roles of the GMO during Audits • Discuss the Various Types of Audits Used to Evaluate EPA Programs and Financial Assistance Recipients • Identify the EPA Officials involved with the Audit Process • Understand the Basic Components of the Audit Process • Describe the Single Audit Act Requirements • identity the Major Provisions of the inspector General Act VIEWGRAPH # I TITLE: Audits KEY POINTS: • This module describes the roles of the GMO during audits. As background, this module identifies various types. of audits, the officials involved with the audit process, and the basic components of the audit process. Further, this module describes the Single Audit Act requirements and the major provisions of the Inspector General Act Amendments of 1988. 12.1 ------- TYPES OF AUDITS Internal Audits External Audits ff ll i t 1 VIEWGRApH# 2 TITLE: Types of Audits KEY POINTS: Internal audits are performance audits that examine the programs or operations of Federal agencies. (However, as part of an internal audit, State agencies or assistance recipients may be evaluated to provide further information about the performance of a Federal agency.) Internal audits are used to test the adequacy of an organization’s regulatory compliance and financial reporting. Additionally, they are used to test the effectiveness of its resource management, operating procedures, program results, and financial operations. Internal audits may be expanded scope audits which evaluate the entire organization or limited scope audits which cover only one or two of an organization’s programs or operations. Internal audits of EPA are conducted by the U.S. General Accounting Office (GAO) or EPA’s Office of the Inspector General (EPA OlG). 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, dunng, or after the completion of a project. Examples of external audits include single audits, pre-award audits, interim and final cost audits, and indirect cost audits. - Single audits are financial and compliance audits of State and local governments that are performed in accordance with the Single Audit Act of 1984 (Public Law 98-502) and 0MB Circular A-i 28, and 0MB Circular A-i 33. - 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. 12.2 ------- VIEWGRAPH #2 (cont.,) TITLE: Types of Audits KEY POINTS: • - Indirect cost audits are reviews conducted to determine whether the prospective indirect cost rate properly allocates allowable costs. • Audits of recipients may be requested by the Award Official when considered necessary. These requests should be made on EPA Form 5700-29 “Assistance Audit Request,” and should be submitted directly to the appropriate Divisional Office of the Assistant Inspector General of Audits (DIGA). • EPA is authorized to audit the financially-assisted activities of any recipient organization. However, it is Federal policy to place maximum reliance on a recipient’s own audits (i.e., Single Audits) if they are carried out in accordance with applicable Federal audit standards. • Both internal and external audits should be conducted in compliance with the GAO booklet, “Standards for Audits of Government Organizations, Programs, Activities, and Functions.” Further, 0MB Circular A-73 “Audit of Federal Operations and Programs,” provides guidance relating to the internal and external audit functions of all agencies of the executive branch of the Federal Government. 12.3 ------- AUDIT OFFICIALS • Inspector General • AgencyAudlt Follow-up Official • Headquarters or Regional Audit Follow-up Coordinator • Action Officials • Award Officials VIEWGRAPH # 3 TITLE: Audit Officials KEY POINTS: On behalf of EPA’s Inspector General, the Office of the Assistant Inspector General for Audits (OAIGA) arranges for and monitors the audits of EPA’s financial assistance program activities. The OAIGA also monitors the adequacy of Single Audits of recipients. Below this level are several Divisional Inspector General for Audits (DIGA) who perform audits of the recipients in their geographic area of responsibility. • The Agency Audit Follow-up Official is responsible for Agency-wide audit resolution and implementation of required corrective actions. The Assistant Administrator for Administration and Resources Management is the Agency Audit Follow-up Official. • The Audit Follow-up Coordinator (AFC) is responsible for the day-to-day activities that relate to audit management, response, and resolution. • The Action Official is responsible for responding (on behalf of the audited • organization) to the draft and final reports. (Usually, the GMO is delegated the Action Official function.) • Award Officials are responsible (through the AFC) for completing corresponding project files, which include documents and correspondence relevant to the prospective audits. They have the authority to submit assistance-related audit requests. 12.4 ------- AUDIT PHASES Audit Request + I Survey + I Pilot Audit + Follow-on Audits r Nationwide Report VIEWGRAPH # 4 TITLE: Audit Phases KEY POINTS: • Audit requests that pertain to EPA programs or operations may be submitted to EPA OIG or GAO by a Federal Agency (including the OlG), a member of Congress, or a Congressional Committee. • After the OlG receives an audit request, it conducts a survey . During the survey, background information on a program, activity, or function is collected. Based on the survey results, a decision is made about whether or not to perform a pilot audit. , • During a pilot audit , the auditorperforms a detailed review of the areas identified in the survey phase as worthy of additional attention. The pilot audit is a limited scope audit that is performed at one location. • . If nationwide issues are being evaluated, or there is an indication that similar conditions exist throughout the program or organization being investigated, follow-on audits are performed. A follow-on audit further investigates the areas examined during the pilot audit. In a follow-on audit more than one location may be examined. • If follow-on audits are performed, a nationwide report may be issued. A nationwide report is a consolidation of the results of follow-on audits at several locations around the country. If one region is involved, the report is issued to the Regional Administrator; if several regions are involved, the report is issued to the Assistant Administrator. 0 12.5 ------- • THE AUDIT PROCESS [ Entrance Conference $ • Advisement of Findings • + Draft Report + [ Exit Conference $ Final Report + Audit Resolution VIEWGRAPH # 5 TITLE: The Audit Process KEY POINTS: • This viewgraph illustrates the process typically undertaken each time an EPA audit is conducted. • At the entrance conference, the auditors explain the purpose and scope of the audit and receive comments from the organization being audited regarding potential audit areas. All personnel with extensive knowledge of the area being audited should be at the entrance conference. • During the audit, the auditors provide the organization with feedback about preliminary findings and developing issues. If the organization believes that any of these findings are invalid based on factual information, it should discuss this with the auditors. Further, significant or sensitive findings should be brought to the attention of the organization’s senior management immediately. • Shortly after the audit is completed, a draft report is issued. The report contains the auditor’s findings and documentation to support these findings. • After receiving the draft report, the organization is expected to provide a written response to the audit findings contained in the draft report within 30 days. The organization’s .response should concur with the findings or provide an explanation for its disagreement. If the organization has planned or implemented corrective actions, these should be documented in the response as well. • 0 0 • At the exit conference, the auditors discuss the audit findings with the organization to clarify any questions they may have about the audit. 12.6 ------- VIEWGRAPH #5 (cont.) TITLE: The Audit Process KEY POINTS: • After the exit conference, the auditors develop a final audit report containing their findings and recommendations. After receiving this report, the organization’s management has 90 days to provide OIG with a response that either documents concurrence with the audit report or proposes alternative corrective actions for addressing the findings. • Audit resolution occurs either when a “final determination” is issued (in the case of an external audit), or when a “final response” is issued (in the case of an internal audit). For EPA OlG audits containing significant findings of $100,000 or more, the Action Official must obtain the concurrence of the EPA OlG on proposed corrective action. • If the Action Official and EPA OIG do not reach agreement on an audit, the EPA OlG may refer the case to the Audit Review .Group (ARG), which reviews the case and issues a recommendation. The Audit Resolution Board (ARB) reviews the ARG recommendations and issues a final decision that is binding on the agency. - ARG members are: • Chairperson - AA, OARM’s Senior Staff Designee responsible for audit resolution • Associate General Counsel for Grants, Contracts and General Law • A Deputy Regional Administrator (one-year, rotating term) • Advisors: IG and AA for program audited - ARB members are: .• Chairperson - AA, OARM’s Senior Staff Designee responsible for audit resolution • Associate General Counsel for Grants, Contracts and General Law • A Deputy Regional Administrator (one-year, rotating term) • Advisors: Assistant IG for Audits; Office Director for program audited, and Director, Office of Administration 12 7 ------- AUDIT FOLLOW-Up COORDINATOR (AFC) RESPONSIBILITIES • Audft Coordination and Management Assistance • Audit Resolution VIEWGRApH # 6 TITLE: Audit Follow-up Coordinator (AFC) Responsibilities KEY POINTS: Audit Coordination and Management Assistance . The Audit Follow-up Coordinator (AFC) serves as the initial contact point and as the on-going liaison between the region and the audit organization. The AFC regularly reviews the annual audit plans of audit organizations (e.g., the OlG annual audit plan) and alerts the region of an intention to audit. The AFC then coordinates the entrance ‘and exit conferences, provides documentation, and answers questions posed by the auditors before and during the audit. If significant issues arise during the audit, the AFC notifies the Grants Administration Division (GAD) at EPA headquarters. Audit Resolution . Following the audit, the Action Official should transmit to the AFC a copy of the final audit report (less any classified or irrelevant material) within 15 days of the report date. The cover letter should advise the AFC of the information expected in response to the audit findings. Upon receipt of the audit report, the AFC distributes the report for review by the appropriate regional officials. After these officials have reviewed the audit report, the AFC coordihates the region’s response to the audit report. The AFC is also responsible for monitoring the progress of corrective actions. If the State has been delegated audit resolution responsibility for Waste Water Treatment (WWT) construction grants, regional offices must coordinate the resolution of an audit of a local government recipient with the State. The Region and the State should, if possible, develop a coordinated position on the audit findings, the recommendations, and the recipient’s response before the State presents any determinations to the recipient and before the Action Official issues a final determination. 12.8 ------- GMO RESPONSIBILITIES IN AUDITS • Responding to Audft Questions Pertaining to Assistance Agreements • Ensuring Recipient Completes Corrective Actions • Performs Audit Follow-up Function • Ensuring Recipient Follows Single Audit Act Requirements, as Applicable VIEWGRApH# 7 TITLE: GMO Responsibilities in Audits. KEY POINTS: • EPA has cognizance for audit responsibilities over certain State and local agencies as determined by the Office of Management and Budget. • Entities receiving assistance from EPA may direct audit questions pertaining to assistance agreements to the GMO. • The GMO may also help to ensure that the recipient completes corrective actions described in EPA’s cover letter and with performing various audit follow-up functions. Additional information on GMO audit follow-up functions can be found in the Audit Handbook for EPA Managers published by EPA’s Resource Management Division. • The GMO must also ensure that the entities under EPA audit cognizance follow applicable Single Audit Act requirements. 12.9 ------- THE SINGLE AUDIT ACT OF 1984 AND STATE, LOCAL GOVERNMENTS, AND INDIAN TRIBES • Financial and Compliance Audits Generally are Required Annually - Single Audit Act 1984 - 0MB Circular A-128 “Audits of State and Local Governments” • Other Audits may be Required VIEWGRAPH # 8 TITLE: The Single Audit Act of 1984 and States, Local Governments, and Indian Tribes KEY POINTS: The Single Audit Act of 1984 requires States, local governments, and Indian Tribes receiving greater than $25,000 in Federal assistance per year to perform a financial and compliance audit annually, unless legislation allows the audits to be performed biannually. Generally, this audit must be performed on an organization-wide basis. Further, this audit must be conducted by auditors that are independent of the recipient organization. • 0MB Circular A-i 28 “Audits of State and Local Governments,” issued April 12, 1985, provides Federal agencies with policy guidance for implementing the requirements of the Single Audit Act of 1984. • After conducting a single audit, the recipient sends the final audit report to the cognizant agency’s 01G. The OIG examines the report and determines if it satisfies Federal regulations. • The Single Audit Act discourages agency audits of areas sufficiently addressed in an organization’s single audit. However, EPA may request other audits when necessary including: pre-award audits; interim and final cost audits; indirect cost audits; and audits which evaluate unresolved financial and compliance issues, economy and efficiency issues, or program results. 12.10 ------- AUDITS OF NON-GOVERNMENT RECIPIENTS • Audfts of lnetftutlons of Higher Learning and Other Private Non-prof ft Organizations: - Organization-wide Audits are Required at Least Every Two Years • Audfts are Required Following Completion of a Project If Necessary • Audfts of For-profit Organizations, Foreign Organizations, and Individuals: - Project-by-Project Audits May be Required -: Audits are Requested at the Discretion of the EPA Project Officer and the Award Official VIEWGRAPH 1 10 TITLE: Audits of Non-goverriment Recipients KEY POINTS: • Non-government recipients of EPA financial assistance include: institutions of higher learning and other private non-profit organizations, for-profit organizations, individuals, and foreign organizations. The audit requirements for these parties are described below. • The primary audit requirements governing institutions of higher learning and other non-profit organizations are contained in 0MB Circular A-i 33 “Audits of Institutions of Higher Learning and Other Non-profit Institutions.” The provisions of this Circular are similar to those of 0MB Circular A-i 28. Under 0MB Circular A-i 33, institutions of highereducation and other non-profit organizations are responsible for arranging audits of their activities at least every two years. These audits are to be relied upon by. EPA to the maximum extent possible. Moreover, if requested by the EPA Project Officer or the Award Official, EPA-supported activities maybe audited following completion of a project. • For-profit organizations, individuals, and foreign organizations are subject to individual audits on a project-by-project basis rather than an organization-wide basis. These audits are requested at the discretion of the EPA Project Officer and Award Official, and scheduled by the DIGA. 12.11 ------- INSPECTOR GENERAL ACT AMENDMENTS OF 1988 Mad. Significant Changes to the Audit Resolution, Follow-up, and Reporting Process • Expanded EPA ’s Audit Requirements to Include Semi-annual Reporting to Congress • Led to the Development ole Now Corrective Action Tracking System VIEWGRApH # 9 TITLE: Inspector General Act Amendments of 1988 KEY POINTS: • Under the Inspector General Act Amendments, EPA management must track audit follow-up actions until all corrective actions identified in its management decision are complete. Further, EPA management must report to Congress semi-annually on the status of audit resolution and follow-up activities, as well as provide an explanation for audits not resolved within 180 days and final actions that have remained incomplete for one year or more. Currently, EPA’s Resource Management Division prepares the semi-annual report to Congress on audit resolution and implementation of corrective action. • The Management Audit Tracking System (MATS) is a centralized system developed to monitor and manage the implementation of required corrective actions. The system provides EPA with a management tool to use in the audit process. Using this system, AFCs report the status of their corrective action for both performance audits and financial and compliance audits. 12.12 ------- , S7 % (i). INTERAGENCY AGREEMENTS MODULE XIII ------- INTERAGENCy AGREEMENTS BY THE END OF THIS MODULE YOU WILL BE ABLE TO: • Define an Interagency Agreement (lAG) • Identify when to use an lAG versus a Contract, Cooperative Agreement, or Grant • Identify the Different Funding Methods for lAGs • Identify the Types of Superfund lAGs • Outline the Roles and Responsibilities of the Various EPA Offices for lAGs • Explain the Specific Requirements for Superfund lAGs • identify Some of the Other Agencies with Which EPA has lAGs • identify Additional Guidance and Training Programs on lAGs VIEWGRAPH # 1 TITLE: Interagency Agreements KEY POINTS: By the end of this module you will be able to explain what an interagency agreement (lAG) is and when and why it is used. • We will also identify and review the different types of lAGs. This will culminate in an explanation of the funding methods used by EPA and other Federal agencies. • Additionally, since Superfund lAGs have been’increasing in number, we will identify the various types of Superfund lAGs. • The roles and responsibilities of the various offices within EPA for lAGs will be outlined, noting the roles of each office for Headquarters-initiated lAGs versus regionally initiated lAGs. • We will discuss the specific requirements, and their reasons, for Superfund lAGs. Additionally, we will identify the agencies with which EPA has most of its Superfund lAGs. • Finally, we will outline guidance available specifically for interagency agreements. 13.1 ------- DEFINITION OF AN lAG An lAG is a Written Agreement between EPA and another Federal, State, or Local Agency which: • Provides lot Goods or Services in Exchange for Funds OR • Provides for Mission Support or Establishes Environmental Policy without Exchange of Funds VIEWGRAPH # 2 TITLE: Definition of an lAG KEY POINTS: An lAG is a written agreement between Federal agencies under which goods and services are provided in exchange for funds, or where services are provided without the exchange of funds. “IAG is an abbreviation for both Federal interagency agreements and intergovernmental agreements between a Federal agency and a State or local government. • Agreement for Goods and Services: These lAGs are agreements in which one agency provides goods or services to the other agency in exchange for funds, or in which the parties have a mutual need for the goods or services and share in the cost of the work performed under the agreements. • Policy Agreement or Memorandum of Understanding: This isan agreement which sets forth basic policies and procedures governing the relationship between two agencies on matters of mutual interest and responsibility. There is no exchange of funds under this type of agreement . 13.2 ------- PURPOSE OF USING lAGS • lAGs are used to Improve the Economy and Efficiency of Obtaining Goods and Servlce& • Superfund uses lAGs wfth the Corps of Engineers Extensively to Accomplish Site Cleanup. VIEWGRAPH # 3 TITLE: Purpose of Using lAGS KEY POINTS: • To maximize economy and efficiency in government, in accordance with the Economy Act of 1932 and the Intergovernmental Cooperation Act of 1968, lAGs are used to allow Federal agencies with greater capabilities in given areas to provide goods, services, or specialized contract support services for other agencies with less experience. • EPA interagenôy agreements and amendments may be entered into only when the originating office determines that: -. It is consistent with EPA’s mission. - Statutory authority for the proposed agreement exists; no funds may be transferred under an agreement unless both agencies have the authority to perform the activities included under the agreement. - Acquisition of goods and services from a commercial source is not feasible or cost effective. - The activities performed under the proposed agreement will be performed in accordance with accepted scientific or technical standards. - There are sufficient resources to cover the cost of the work under the agreement. • In the Superfund program, lAGs are used to enable the accomplishment of Superfund goals. Presently, the Corp of Engineers performs approximately 90% of the site cleanup work; thus most lAGs are with the Corps. 13.3 ------- TYPES OF lAGS Funds Into EPA Funds out of EPA Most commonly used by the Superfund Program VIEWGRAPH # 4 TITLE: Types of lAGS KEY POINTS: lAGs are classified by the direction that funds flow into and out of the Agency. There are therefore, two types of lAGs: those in which funds flow into EPA from another agency (“FUnds In”), and those in which funds flow out of EPA to another agency (“Funds Out”). • The “Funds In” agreements are lAGs in which EPA provides goods or services to another agency. Ways to transfer funds include: - Allocation Transfer-in - Reimbursement. • The “Funds Out” agreements are lAGs in which EPA ethploys another agency to provide support in meeting program objectives. Ways to transfer funds include: - Allocation Transfer-out - Disbursement. • “Funds Out” lAGS are those most commonly used by the Superfund program to receive support for achieving the program’s mission. ALLOCATION TRANSFER-IN REIMBURSEMENT 13.4 ------- ALLOCATION TRANSFER-IN (FUNDS IN) • EPA Delivers Goods or Services on Behalf of another Federal Agency • The Other Agency Transfers Obligation and Spending Authority to EPA, so that EPA can Pay its Expenses VIEWGRAPH # 5 TITLE: Allocation Transfer-In (Funds In) KEY POINTS: • Under the allocation transfer-in, another agency transfers obligation and spending authority to EPA so that EPA can carry out statutory objectives for which the other agency received funds in its appropnation. • For instance, allocation transfer-in lAGs are used when the other agency has the responsibility to perform cleanup work that is germane to EPA, or in which the amount of work is large enough that the arrangement would be more appropriately administered under a transfer of obligation authority than through a reimbursement lAG. • However, the other agency remains responsible for the “parent” appropriation for budget and reporting purposes. • Allocation transfer-in lAGs are seldom used. To use this type of lAG, one must first receive approval from the Office of the Comptroller. 13.5 ------- REIMBURSEMENT (FUNDS IN) • EPA Provides Goods or Services to Another Federal, State, or Local Agency • EPA Is Reimbursed for fts Expenses VIEWGRApH # 6 TITLE: Reimbursement (Funds In) KEY POINTS: Under a reimbursement lAG, EPA delivers goods or services to or on behalf of another agency. When EPA is acting on behalf of another Federal agency, the Agency is reimbursed for its expenses through a Federal agency lAG. When EPA is providing services to a State or local government, the Agency is reimbursed for its expenses through an Intergovernmental Agreement. (Note: the abbreviation “lAG” is used for both interagency and intergovernmental agreements.) • EPA uses reimbursable authority provided by the Office of Management and Budget (0MB), which is conveyed to the originating program offices by the EPA Office of the Comptroller through a reimbursable advice of allowance. The EPA Project Officer must first request the Office of Comptroller to provide a reimbursable Advice of Allowance before this type of JAG can be used. • Funds under the allowance can be expended only for reimbursable activities as defined in the lAG’s statement of work. EPA is reimbursed either by advance payment or by repayment. • Under a reimbursement lAG, if EPA fails to recover funds from the other agency, its own funds must be used to cover the expended amounts. • Reimbursement Intergovernmental Agreements are most commonly used to provide ADP timeshare services on EPA’s computers at RIP. • Reimbursement agreements are not commonly used in the Superfund program; however, over the years several reimbursement agreements have been executed. These are usually: - To provide lab support - To detail EPA personnel to another agency - To allow another agency access to EPA’s contracts, i.e., ERCS contracts. 13.6 ------- ALLOCATION TRANSFER-OUT (FUNDS OUT) Another Federal Agency Carries out Activities In Support of EPA Transfers Obligation and Spending Authority to the other Federal Agency VIEWGRAPH # 7 c TffLE: Allocation Transfer-Out (Funds Out) KEY POINTS: • An allocation transfer-out lAG is used when EPA delegates obligation and spending authority to another agency to carry out activities directly in support of statutory objectives. For example, Congress may, for reasons of efficiency, give EPA an appropriation that includes funds specifically designated for another agency’s use. EPA remains responsible for the “parent” appropriation for budget and reporting purposes. V • The funds for the entire amount of the lAG are withdrawn from the appropriate EPA allowance and placed in the EPA operating plan. To • keep these same funds from being obligated by EPA, the funds are then set aside in the Allocation Transfer Reserve. The transfer allocation mechanism is similar to the Comptroller providing allowances to EPA program offices to carryout specific functions. • EPA transfers funds based on a scope of work for a specified time period and, in the case of Superfund, on a site-specific basis. The other agency submits status reports periodically tà the program office and submits monthly financial reports to the Financial Reports and Analysis Branch (FRAB), Financial Management Division. • The Project Officer must get prior approval from the Office of the Comptroller to use this type of lAG. 13.7 V ------- DISBURSEMENT (FUNDS OUT) • Another Federal Agency Provides Goods or Services. • EPA Provides Funds to the other Agency for Its Expenses VIEWGRAPH # 8 TITLE: Disbursement (Funds Out) KEY POINTS: • Under a disbursement lAG, another Federal agency delivers goods or services to EPA, and EPA disbUrses funds to the other agency’s account to pay for that agency’s expenses. This category of lAG is similar in concept to obtaining goods or services from a contractor. • EPA pays the other agencies either by advance payment or by repayment. In other words, EPA either pays the other agency before goods and services are received, or EPA repays the other agency after• the goods and services have been provided. (These funding methods are discussed more in the next shde.) • Examples of agencies with whom EPA has disbursement agreements are the U.S. Coast Guard, the U.S. Army Corps of Engineers, and the Internal Revenue Service. 13.8 ------- • FUNDING METHODS LAGS 1. Funds-In Funds-out Allocation Reimbursements Allocation Disbursements Transfer-In Transfer-cut 3 AdVW CS Repayment Advance Repayment Payment Payment 1. Types of lAGs 2. Categories 3. Payment Method VIEWGRAPH # 9 TITLE: Funding Methods KEY POINTS: • A major difference among lAGs is the method of funding. There are three funding methods for lAGs: the aHocation transfer mechanism (both in and out), advance payment, and repayment. • Allocation transfers provide funds at the appropnation level. This is a funding method, not a payment method . because no actual payment or repayment occurs. The allocation transfer mechanism typically transfers obligation and spending authority from one Federal agency to another Federal agency at the appropriation level. • When funding occurs through an allocation transfer, the other agency provides budget and outlay projections of the obligations and expenditures it plans to make dunng the quarter. The other agency also submits SF-133’s to the EPA Comptroller to report on obligations made under the lAG. • Using the repayment method, one Federal agency bills the other agency for goods that have been delivered or services that have been performed. This payment method is one of the most commonly used and is what has been referred to in the past as “reimbursables.” • Under the advance payment method, one agency transfers monies to the other agency before work is begun. The agency receiving the monies sends the other agency periodic status reports, letters, memos, etc., indicating how the funds are being used. 13.9 ------- TYPES OF SUPERFUND lAGS (FUNDS OUT) • Ongoing Responslbllfties • Site-Specific • n rI& tginglhv VIEWGRAPH # 10 TITLE: Types of Superfund lAGs (Funds Out) KEY POINTS: Within the Funds Outs class, there are three types of lAGs which are most commonly used by the Superfund program. These are usually referred to as ongoing responsibilities, site-specific, and generic or standby (multi-site) lAGs. • In most cases, ongoing responsibilities lAGs are initiated and administered in Headquarters. When EPA works with another agency, EPA Headquarters will usually execute an agreement with the Headquarters office of the other agency to cover expenses associated with administrative and planning activities, always of a non-site-specific nature. One exception is EPA’s ongoing responsibilities with the U.S. Coast Guard, under which site-specific work is performed. • These ongoing responsibilities lAGs are not available for use by regional offices; however, Regions may initiate their own versions of these agreements to allow the other agency to perform any administrative activities that may arise which are not covered by either the Headquarters on-going responsibilities lAG or a site-specific lAG. • Site-specific lAGs are initiated and managed by the Regions. Whenever work is done at a site by another Federal agency, the EPA Regional Program Office is responsible for initiating a site-specific lAG. Typically these lAGs are for support during emergency responses, permanent and temporary relocations, remedial designs, remedial actions, and enforcement actions. These site-specific lAGs are disbursement or allocation transfer-out lAGs. • Generic lAGs, rather than site-specific lAGs, may be used to obligate funds for future work at several sites in cases in which site-specific assignments have not yet been identified. Generic lAGs are used for repetitive assignments for one type of work. A generic lAG is also usually for small dollar amounts to allow work to begin through work authorizations until a site-specific lAG is in place. Expenditures must still be tracked site-specifically by the other agency. 13.10 ------- VIEWGRAPH # 10 (cont.) TITLE: Types of Superfund lAGs (Funds Out) KEY POINTS: • One example of how generic agreements are used would be to obtain • technical assistance from the U.S. Army Corps of Engineers during EPA-lead phases of remedial response activities. Generic lAGs are also used to have the Department of Interior or the National Oceanic and Atmospheric Administration conduct preliminary natural resource surveys. • All Superfund lAGs are similar in that they contain terms and conditions for record retention, reporting, cost recovery, and MBE use. The cost documentation required in Superfund lAGs distinguish them from other EPA lAGs. These Superfund-specific requirements are discussed later in this module. 13.11 ------- PROGRAM OFFICE L.R ns I [ gIonau Program onlceJ __________________ Negotiate and Prepare lAG Packages for Agreements Inftlated In the Regions • RAs Division Dk.ctor • — Offics,. VIEWGRApH # 11 TITLE: Program Office KEY POINTS: • Regional Program Offices negotiate site-specific disbursement lAG packages, site-specific allocation transfer-out lAGs, and reimbursement and allocation transfer-in lAG packages for agreements initiated in the Regions. • Headquarters Program Offices negotiate lAGs for ongoing responsibilities lAGs, and reimbursement and allocation transfer-in lAGs. • For lAGS within their areas of responsibility, Assistant Administrators, Associate Administrators, and Directors of Headquarters Program Offices are responsible for the following: - Ensuring that agreements are developed and managed in accordance with EPA guidance and Federal regulations - Determining that proposed agreements are consistent with EPA’s mission - Developing and negotiating lAGs - Designating Project Officers for lAGs. • Project Officers, in either Headquarters or the Region, provide technical and managerial oversight of lAGs. Some of their responsibilities include: - Maintaining working lAG files - Negotiating the agreement and obtaining required originating office signatures - Assembling an lAG package, and submitting the package for administrative review, approval, and execution Headquarters adquarters Program Office ] Negotiate and Prepare lAG Packages for Agreements Inftlated In Headquarters • Assistant Administrators • Associat, Administrators Offic. Directors • ed Officsrs 13.12 ------- VIEWGRAPH # 11 (cont.) TITLE: Program Office KEY POINTS: Project Officer’s responsibilities (cont.): - Recording on EPA Form 2550-8, “Report of Reimbursable Services Rendered”, the cost that EPA incurs in performing work under.the reimbursable agreement and forwarding it to the Cincinnati Financial Management Center (CFMC) in order to ensure that EPA bills other agencies for the work it has performed - Receiving and reviewing detailed cost information submitted by other agencies under disbursement agreements - Approving vouchers and On-line Payment and Collection System (OPAC) and Simplified Interagency Billings and Collection System (SIBAC) billings received via CFMC from other agencies requesting, payment for goods and services provided to EPA, after determining that performance is in accordance with the agreement - Forwarding approved vouchers to CFMC for payment within five days of receipt - Monitoring the JAG to determine when amendments are required for time extension and additional funding, and when close-out is appropriate - Providing documentation to GAD or the Regional GMO for closeout of lAGs. 13.13 ------- REGIONAL ADMINISTRATOR • Reviews and Approves lAGs or Delegates this Function • Assigns Responsibility • Establishes Procedures for Management of lAGs VIEWGRAPH # 12 TITLE: Regional Administrator KEY POINTS: It is the responsibility of the Regional Administrators (RA), or their designees, to review, approve and execute all EPA agreements or amendments that originate in the regional offices. The RA establishes procedures to ensure that regional agreements are developed and managed in accordance with relevant guidance and are consistent with EPA’s mission. 13.14 ------- REGIONAL GRANTS MANAGEMENT OFFICE FOR lAGS ISSUED BY ThE REGION: • Assign. lAG Number • Reviews/Approves lAG • Submits lAG to other Agency for Approval • Distributes Signed lAG • Enters lAG Data into Grants Information Control System (GICS) • Provides Administrative Oversight for the lAG • May Review and Co-sign Vouchers VIEWGRAPH # 13 TITLE: Regional Grants Management Office V KEY POINTS: • The regional GMO conducts administrative and financial reviews and manages lAGs. . V • The Grants Management Office also: - Assists in the development of lAGs as requested by the originating office V - Assigns the. lAG number - Enters lAG data into the Grants Information Control System (GICS) and may prepare the lAG document using the Interagency Agreement Management System (IAMS) - Reviews the lAG for administrative compliance and processes it for signature - Submits the lAG to the other agency for approval V - Distributes the signed lAG to Headquarters, the Cincinnati Financial Management Center (CFMC), and the program office - Verifies that funds are committed in the Automated Document Control Register (ADCR) -. Provides the administrative oversight for the lAG - Closes out the lAG after the Project Officer certifies work is complete. • The Grants Management Office also establishes the official agreement file. V • For specific responsibilities and procedural steps for the Grants Management Office, refer to the lAG Policy and Procedures Compendium (which includes Chapter 51 of the Assistance Administration Manual ) and Regional Processing of Superfund Interagency Agreements . 13.15 ------- SERVICING FINANCE OFFICE FOR DISBURSEMENT lAGS: • Assigns Accounting Data • Commits Funds in the ADCR • Enters Commitment Into the IFMS FOR REIMBURSEMENT AND ALLOCA11ON TRANSFER-IN lAGS: • Establish Account Number In IFMS (except ADP timeshare) VIEWGRAPH # 14 TITLE: Servicing Finance Office KEY POINTS: • The Servicing Finance Office (SF0) has various responsibilities depending on the type of lAG. • For disbursement lAGs, the SF0 assigns accounting data, commits funds in the Automated Document Control Register (ADCR), and enters the commitment into the Integrated Financial Management System (IFMS). • For reimbursement lAGS and allocation transfer-in lAGs, the SF0 establishes an account number in the IFMS (except for ADP timeshare). • Procedures and roles vary among Regions; in some, commitment of funds and commitment entry into IFMS are performed by the program office. 13.16 ------- PROGRAM OFFICE PROGRAM OFFICE: • Prepares Funding Packages • Reviews and Approves lAGs • Enters Commitment into the IFMS • Reviews Vouchers for Ongoing Responsibilities lAGs and U.S. Coast Guard-lead Removals VIEWGRAPH # 15 TITLE: Program Office KEY POINTS: • For the Office of Emergency and Remedial Response (OERR) lAGs, the Resources Management Section prepares funding packages, processes tAGs, enters commitments into the IFMS, and reviews vouchers for ongoing responsibility lAGs and USCG-Iead removals. • For non-OERR lAGs, these functions are performed by the appropriate program office. 13.17 ------- GRANTS ADMINISTRATION DIVISION GAD Is responsible for overall administrative management of lAGs Including: • Issuing lAG Identification Numbers • Assigning lAG Numbers for Headquarters-lnftlated lAGs • Developing Policy and Procedures • Establishing and Maintaining Financial Management Systems FOR HEADQUARTERS-INI11ATED lAGS, GAD: • Reviews and Approves lAGs • Enters lAG data into GICS • Authorizes Closeout • Provides Training VIEWGRAPH U 16 TITLE: Grants Administration Division KEY POINTS: It is the responsibility of the Grants Administration Division to: - Develop and implement agency-wide administrative policy and procedures for lAGs - Assist in the development of lAGs as requested by the originating office - Establish and maintain systems for financial management, internal control, and reporting for all lAGs in coordination with the Financial Management Division - P.rovide the Cincinnati Financial Management Center (CFMC) with copies of the Funds-in reimbursement and Funds-out disbursement lAGs - Provide the Financial Management Division/Financial Reports and Analysis Branch with copies of the Funds-in and Funds-out allocation transfer lAGs - Conduct periodic monitoring of lAGs - Review, approve, and execute all EPA agreements or amendments which originate in Headquarters - Enter all information on Headquarters lAGs into the Grants Information Control System (GIGS) - Ensure closeout of all Headquarters lAGs. - Provide guidance, assistance and training for Headquarters and Regional offices. 13.18 ------- CINCINNATI FINANCIAL MANAGEMENT CENTER FOR HEADQUARTERS. AND REGIONAL-INmATED lAGS: • Acts as Servicing Finance Office • Records Obligations Into the IFMS • Performs Financial Closeout FOR DISBURSEMENT lAGS: • Processes Vouchers for Payment • Maintains Sepaate Site-specific Payment Documents for Superfund lAGs FOR REIMBURSEMENT lAGS: • Establishes Reimbursable Account, Assigning Account Number • Bills other Agency and Creates Account ReceIvable in the IFMS • Enters Payment Data into the iFMS • Maintains Payment Files and follows up on Past-due Bills VIEWGRAPH # 17 TITLE: Cincinnati Financial Management Center KEY POINTS: • The Cincinnati Financial Management Center is the central servicing finance office for all payments and receipts on EPA interagency agreements. • For Headquarters and Regional lAGs, CFMC records obligations into the IFMS and performs financial closeout. • For disbursement lAGs, CFMC processes vouchers for payment and • maintains separate files of site-specific payment documents to support cost reóovery. • For reimbursement lAGs, CFMC sets up the reimbursable account, assigns an account number (except for ADP timeshare agreements), bills the other agency, creates the account receivable in the IFMS, enters the payment data into the IFMS, maintains unpaid bill and paid bill files, and follows up on past-due bills. • CFMC also provides information about the financial requirements of lAGs and works with the Project Officers, GAD and the regional offices to close out agreements. 13.19 ------- OFFICE OF COMPTROLLER BUDGET DIVISION FOR ALLOCATiON TRANSFER-OUT lAGS: • Sets aside Funds In the EPA Operating Plan • Prepares Memorandum Requesting the Transfer of Required Funds • Authorizes Transfer of Funds • Sends Signed Memorandum to FRAS for Execution of Tr sfer FOR REIMBURSEMENT lAGS: • Seeks Reimbursable Authority from 0MB • Issues Advice of Allowance FOR ALLOCATION TRANSFER-IN lAGS: • Approves Allocation Transfer Mechanism • Makes Funds available to Allowance Holder VIEWGRAPH # 18 TITLE: Office of Comptroller Budget Division KEY POINTS: For allocation transfer-out lAGs, the Budget Division of the Office of Comptroller is responsible for: - Setting aside funds in the EPA Operating Plan - Preparing the memorandum which requests the transfer of funds - Authorizing the transfer of funds and sending the signed memorandum to the Financial Reports and Analysis Branch for execution of the transfer. For reimbursement lAGs, the Budget Division: - Reviews requests from allowance holders for reimbursable authority - Obtains reimbursable authority from 0MB - Issues Advices of Allowance to the allowance holder for that authority. For allocation transfer-in lAGs, the Budget Division approves the allocation transfer mechanism and makes funds available to the allowance holder. 13.20 ------- OFFICE OF COMPTROLLER FINANCIAL MANAGEMENT DIVISION FINANCIAL REPORTS AND ANALYSIS BRANCH FOR ALL ALLOCATiON TRANSFER lAGS: • Receives and Reviews Agreements • RecordslAGDatalnthelFpjS • Monitors Closeout of the lAGs • Adjusts Final Amounts In IFMS FOR ALLOCATiON TRANSFER-IN lAGS: • Notifies Budget Division that other Agency has Completed SF1151 • Prepares Status Reports for other Agency • Prepares and Distributes SF1151 for lAG Closeout FOR ALLOCATiON TRANSFER-OUT lAGS: • Receives Status Reports from other Agency • Initiates Transfer of Funds via the SF 1151 • Receives SF 1151 for Final Adjustment to Closeout lAG VIEWGRAPH # 19 TITLE: Office of Comptroller Financial Management Division Financial Reports and Analysis Branch KEY PO!NTS: • For all allocation transfer lAGs, the Office of the Comptroller/Financial Management Division/Financia! Reports and Analysis Branch receives and reviews all agreements, records the amount of the allocation transfer lAG in the Integrated Financial Management System, monitors the closeout of the lAGs, and prepares entry into IFMS to adjust final amounts. • For allocation transfer-in lAGs, the Financial Reports and Analysis Branch: - Notifies the Budget Division that the other agency has completed SF 1151 so that it can make funds available to the allowance holder - Prepares status reports for the other agency, including the monthly SF 133, “Report on Budget Execution”; quarterly SF 225, “Report on Obligations”; TFS 2108, “Year End Closing Statement”; and Annual Federal agency financial reports (SF 220, SF 220-1, SF 220-8, SF 220-9, SF 221, SF 222, and SF 223) - Prepares and distributes SF 1151 for final adjustment to close out the lAGs. • For allocation transfer-out lAGs, FRAB receives monthly, quarterly, and annual reports from other agencies; initiates transfer of funds via the SF 1151; and receives the SF 1151 for final adjustment to close out the lAG. 13.21 ------- SUPERFUND-SPECIFIC lAG REQUIREMENTS • Cost Recovery and Record Retention • Reporting Requirements • Statutory Authorities VIEWGRAPH # 20 TITLE: Superfund-Specific lAG Requirements KEY POINTS: • All Superfund lAGs are similar in that they contain special conditions for record retention, reporting, and cost documentation. These requirements are necessary for cost recovery actions. • Recovery of costs for cleaning up hazardous wastes at sites plays a major role in replenishing the Hazardous Substances Trust Fund (Superfund), thereby providing funds for additional cleanup work. • As a result of the necessity to maintain accurate cost recovery documents, the other agencies must agree to meet the site-specific financial management and recordkeeping responsibilities outlined in EPA’s Superfund FinancialManagement and Recordkeeping Guidance for Federal Agencies and the relevant special conditions of the lAG. • In order to pursue a CERCLA cost recovery action against a responsible party, the government must be able to prove three points: the party was responsible for the release or potential release of a hazardous substance; the work the government did at the site was necessary to remedy or prevent the release of a hazardous substance; and the government can accurately document the cost of the remedy or prevention. A Federal agency performing work under an lAG will have to provide EPA and the Department of Justice attorneys with appropriate documentation in order to prove these three points. • For these reasons, it is very important that records be retained both by the other Federal agency and its grant recipients/contractors. Currently Superfund regulations require that records be retained for a period of 10 years after submission of final reports. After 10 years, the other agency must obtain written permission from the appropriate EPA authorized official before disposing of any records. 13.22 ------- VIEWGRAPH # 20 .(cont.) TITLE: Superfund-Specitic lAG Requirements KEY POINTS: • With regard to reporting requirements, the other agencies must provide progress reports to the EPA Regional Project Officer and the appropriate office in EPA Headquarters. • Other agencies may also be required to provide cost-related progress and final property inventory reports as agreed upon in the lAG. • As mentioned previously, the Economy Act provides authority for EPA to enter into interagency agreements with other Federal agencies. However, CERCLA, as amended by the Superfund Amendments and Reauthorization Act, is the primary authority for Superfund lAGs. Additional delegated responsibilities for Superfund were provided in Executive Order 12580, a presidential order that was written to correspond to CERCLA, as amended. • Regional Processinç of Interagency Agreements and Managing Superfund Interagency Agreements provide detailed information and requirements. 13.23 ------- OTHER FEDERAL AGENCIES • U.S. Coast Guard U.S. Army Corps of Engineers • National Oceanic and Atmospheric Administration • Department of Interior - Bureau of Reclamation - U.S. Fish and Wildlife Service - U.S. Geological Survey Department of Health and Human Services VIEWGRAPH # 21 TITLE: Other Federal Agencies KEY POINTS: This slide provides a list of the other Federal agencies most often used by EPA to assist with its environmental efforts. An awareness of the types of assistance (developing the statement of work, reviewing design packages, etc.) provided by these agencies as well as specific services they perform will help provide a basis for understanding how they assist with EPA activities. • The U.S. Coast Guard provides removal support to EPA under site-specific disbursement lAGs. • The U.S. Army Corps of Engineers can provide support for either EPA-lead or State-lead, Fund-financed projects. The Corps assists in remedial designs, remedial actions, and enforcement actions. • The Bureau of Reclamation provides assistance at hazardous waste sites during remedial designs, remedial actions, and enforcement actions. It may also provide technical assistance to EPA. • U.S. Fish and Wildlife Service and U.S. Geological Survey can provide EPA with technical assistance, especially during hazardous waste remedial response or enforcement actions. • Two agencies, the National Oceanic and Atmospheric Administration and the Department of Interior, provide Preliminary Natural Resource Surveys to EPA. • EPA has lAGs with other Federal agencies. However, the agencies discussed here represent the primary agencies involved in EPA programs. • The Department of Health and Human Services often provides heatthcare-related services to EPA under and lAG. 13.24 ------- lAG GUIDANCE lnteraaencv Aareement Policy and Procedures Comoendlum • Chapter 51 of the __________________ Manual . “Managing Interagency Agreements” • RMDS 2550C, Chapter 4 “interagency Agreements” VIEWGRAPH # 22 TITLE: lAG Guidance KEY POINTS: • The purpose of this training module is to provide a general overview of lAGs. It is not designed to provide a thorough discussion of lAGs. For additional details concerning use of lAGs and the administration of them, specific documents and training are available. • The lAG Compendium is a compilation of all information pertaining to lAGs. It includes information in general terms, so that it applies to all EPA programs and offices that use lAGs. This document was revised in September 1988. It is specifically directed to EPA program, administrative, and financial staff who have an active part in developing • and administenng lAGs. The office responsible for the production of the lAG Compendium is the Headquarters Grants Information and Analysis Branch (GIAB). This Branch can provide copies of this document upPn request. •. Chapter 51 of the Assistance Administration Manual is also Chapter 1 of the lAG Compendium . This chapter is part of the Grants Administration Division’s policy document. It provides information on all of the policies and procedures for the development, execution, administration, and closeout of lAGs between EPA and other agencies. A copy can also be obtained from GIAB. • Chapter 4 of the Resources Management Directives System 2550C provides an overview of the administration of those interagency and • intergovernmental agreements in which funds are exchanged. It also presents the budgetary and financial management policies and procedures specific to those agreements. This chapter is being finalized with comments received during grfen border review. • .13.25 ------- SUPERFUND lAG GUIDANCE • Suoerfund Program: Realonal interagency Agreements Handbook • Suoerfund Financial Management and RecordkeeDfn g Guidance for Federal Agencies • yp rf nd Remedial Deslan and Remedial Action Guidance • Chapter III of the u 9 rfund Removal Procedures . “Program Operations • RMDS 2550D, Chapter 6 “Superfund interagency Agreements - Update” VIEWGRAPH # 23 TITLE: Superfund lAG Guidance KEY POINTS: The Superfund Program: Regional Interagency Agreements Handbook , OSWER Directive 9295.0-01, was created to provide guidance on the normal operating procedures associated with the origination, execution, and closeout of Supertund lAGs. It was created for the Regions, especially Superfund regional program office staff and other regional office staff that interface with the Superfund program office dunng the lAG process. Copies can be obtained from the OERR or the Office of Waste Programs Enforcement. The Superfund Financial Management and Recordkeeping Guidance for Federal Agencies details the Superfund cost documentation and recordkeeping that EPA requires of other Federal agencies, as well as information on what these requirements are and suggestions for meeting them. It can be obtained from the Superfund Accounting Branch in the Office of the Comptroller, FMD. • The Superfund Remedial Design and Remedial Action Guidance is an OSWER Directive developed by the Office of Emergency and Remedial Response. This document includes information for EPA, State, U.S. Corps of Engineers, and private parties and defines responsibilities for planing, administering, and managing RD and RA projects. • Chapter III of the Superfund Removal Procedures , contains information on the use of lAGs in a removal action. Specifically, it highlights lAGs with the U.S. Coast Guard, the Federal Emergency Management Agency, or the Agency for Toxic Substances and Disease Registry. The procedures are currently being revised into a series of documents. • Chapter 6 of Resources Management Directives System 25500 provides an overview of the procedures for administering Superfund lAGs. Classes of lAGS, roles and responsibilities of offices within EPA, and the financial processes for each type of lAG are outlined. This chapter is currently under revision. 13.26 ------- ,, s ( ) ThE SUPERFUND PROGRAM MODULE XIV ------- ThE SUPERFUND PROGRAM BY ThE END OF This MODULE YOU WILL BE ABLE TO: • Explain the Purpose of the Superfund Program • Identity the StatUte and Regulations that Govern the Suporfund Program • identify the Various Types of Assistance Available Under the Superfund Program • Outline Recipient ResponsibIlItIes for Superfund Responses • Explain the Role and General Content of superfund ( rativs Agreements and Superfund State Contracts VIEWGRAPH # 1 TITLE:, The Superfund Program KEY POINTS: In order to plan and implement Superfund cooperative agreements (CAs) and Superfund State Contracts (SSCs) effectively, both Regional and State staff must have a sound understanding of the Superfund program and the statutes and regulations that govern site cleanups. This session is a general introduction to Superfund for Regional grants personnel. As such, it avoids a technical discussion of the program. • This module identifies the various types of assistance available under the Superfund program and introduces the general content of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA), the National Contingency Plan (NCP), and 40 CFR Part 35, Subpart 0. • This module also discusses the roles of recipients in the design and implementation of Superfund responses. This includes a treatment of the role and general content of Superlund CAs, including the provision of CERCLA 104(c) assurances, and an explanation of the role and general content of both two- and three-party Superfund State Contracts (SSCs). Finally, this module introduces other assistance offered under the Superfund program, including Technical Assistance Grants (TAGs), Superfund Innovative Technology Evaluation Program (SITE) grants, research grants, and grants to Environmental Research Centers (ERCs). 14.1 ------- CERCLA VIEWGRAPH # 2 TITLE: CERCLA KEY POINTS: Problem : Past Waste Disposal Solution : Superfund Trust Fund • CERCLA was the solution to a gap in Federal environmental authority -- it is a unique statute that provides response capabilities, a mechanism for funding response, and the basis for establishing the liability of responsible parties. • Superfund is multi-media in effect; it covers releases of hazardous substances into the land, air, and surface and ground water. • The Superfund program consists primarily of removal, pre-remedial, remedial, and enforcement activities. Program : Superfund Responses 14.2 ------- ThE PROGRAM MISSION The Mission of CERCLA Is Straightforward: • Find the Nation’s Worst Chemical Contamination Sftes and Clean Them Up • Set Up the Legal and institutional Mechanisms to Clean up Sites Fast • Use the Response Trust Fund to Get the Job Done VIEWGRAPH # 3 TITLE: The Program Mission KEY POINTS: The fund size increased from $1.6 billion to $8.5 billion over five years. • The tax structure for generating the Fund includes: - Broad-based corporate tax ($2.5 billion) - Chemical feedstock tax ($1.4 billion) - Petroleum tax ($2.75 billion) Additional contributions to the Fund are planned from general revenues ($1.25 billion), interest and cost recoveries ($600 million). In 1990, Congress extended the program tol 994. 14.3 ------- RELEASE AND CERCLA RESPONSE CERCLA Applies Whenever: • A Hazardous Substance - as Defined in CERCLA 101 (14) - Is Released or Threatens Release Into the Environment • A Release of a Pollutant or Contaminant Poses an Imminent or Substantial Endangerment to Public Health or Welfare VIEWGRApH # 4 TITLE: Release and CEACLA Response KEY POINTS: • CERCLA Section 101(14) defines “hazardous substance,” incorporates substances designated under other ‘Federal statutes and designates additional substances. • Petroleum, crude oil, and natural gas are excluded from the definition of hazardous substances. • As set forth in CERCLA §1 01 (33), the definition of a pollutant or contaminant includes any element, substance, compound or mixture which after release into the environment and upon exposure, ingestion, inhalation or assimilation into any organism will or may reasonably be anticipated to Oause death, disease, etc. • For a hazardous substance, there is no “threat threshold”; that is, EPA need not prove that the release poses a threat to human health or the environment, just that there is a release or threat of release. • For a pollutant or contaminant, EPA must find that the release poses an imminent and substantial danger to the public health or welfare. • Section 101(22) defines “release” very broadly as “any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment. .. .“ excluding releases in the workplace, in conjunction with transportation engines and associated with nuclear facilities. 14.4 ------- VIEWGRAPH # 4 (Cont.) TITLE: Release and CERCLA Response KEY POINTS: Removal or remedial action cannot be taken to address a release or threatened release: - Of naturally occurring substances, e.g., radon - Of a substance that is part of a structure and is hazardous solely to those subject to exposure within the structure - Of a substance entering into public/private drinking water supplies due to system deterioration. 14.5 ------- WHERE CERCLA APPLIES CERCLA Broadly Defines the Term “Environment”: • Navigable Waters of the U.S. Waters of the Contiguous Zone • Ocean Waters Managed Exclusively by the U.S. • Surface Water, Ground Water, Drinking Water Supply, Land Surface, Subsurface Strata and Ambient Air Within the U.S. or Its Jurisdiction VIEWGRApH # 5 TITLE: Where CERCLA Applies KEY POINTS: Section 101(8) defines “environment” in extremely broad terms: navigable waters of the United States, waters of the contiguous zone, ocean waters managed exclusively by the United States, surface water, ground water, drinking water supply, land surface, subsurface strata, and ambient air within the U.S. or its jurisdiction. 14.6 ------- ThE REGULATORY FRAMEWORK FOR SUPERFUND RESPONSE AND STATE INVOLVEMENT NCP 0 . I- NCP The National Oil and Hazardous Substances Pollution Contingency Plan (NCP) 40 CFR Part 35, Subpart 0, Cooperative Agreements and Superfund State Contracts for Superfund Response Actions VIEWGRAPH # 6 TrFLE: The Regulatory Framework For Superfund Response and State Involvement KEY POINTS: • The NCP provides the guidelines for planning and conducting response activities. • The NCP was first published in 1982. A revised NCP was promulgated on March 8, 1990. • It is important to become familiar with the elements of Subpart F, State Involvement in Hazardous Substances Response. This section of the NCP outlines the State’s role during EPA-lead response actions and identifies those instances when EPA must consult with the State. • 40 CFR Part 35, Subpart 0, codifies recipient requirements for administering CERCLA-funded cooperative agreements and Superfund State Contracts for non State-lead remedial responses. The final rule was published in the Federal Register on JUne 5, 1990. 14.7 ------- CERCLA DOES NOT OPERATE ALONE IN ThE ENVIRONMENTAL ARENA Related Federal Environmental Laws May Apply to CERCLA Response ActIons: - Resource Conservation and Recovery Act (RCRA) - Toxic Substances Control Act (TSCA) - Clean Water Act (CWA) - Clean Air Act (CAA) - Safe Drinking Water Act (SDWA) - Marine Protection Research and Sanctuary Act (MPRSA) State Environmental and Public Health Laws and Regulations May Also Be Applicable or Relevant and Appropriate VIEWGRAPH # 7 TITLE: CERCLA Does Not Operate Alone in the Environmental Arena KEY POINTS: Superfund is the fund of last resort, It is intended to augment other Federal or State authorities, Its cleanup activities focus on those sites that cannot be cleaned up under other government programs, whether Federal or State. Superfund looks to various Federal and State environmental and public health laws for cleanup standards. A continuing challenge to the Superfund program is determining how clean is clean. The revised NCP addresses this question, looking at applicable or relevant and appropriate Federal and State requirements (ARARs) from other environmental laws. 14.8 ------- PARTiCIPANTS IN ThE IMPLEMENTATION OF SUPERFUND States, Political Subdivisions, and Federally Recognized Indian Tribes are Eligible for Cooperative Agreements to Perform the Following Activities: • Removal Activities • Pre-Remedial Activities • Remedial Activities • Enforcement Activities ___ _______ • Core Program Activities • Support Agency Activities VIE WGRAPH # 8 TITLE: Participants in the Implementation of Superfund KEY POINTS: States, political subdivisions, and Indian Tribes may receive Trust Fund money to participate in the Superfund Program. States, political subdivisions, and Indian Tribes may be eligible for cooperative agreements to perform pre-remedial, remedial, enforcement, removal, Core Program, and support agency activities. Political subdivisions are units of government determined by the State to have met the State’s legislative definition. Examples of political subdivisions include county governments, townships, water districts, and parishes. • To be eligible for a cooperative agreement, an Indian Tribe must be Federally-recognized, have jurisdiction over the site (which must be listed on the NPL), have the ability to carry out response activities, and must have the ability to administer a Superfund CA. • In order to be eligible for enforcement cooperative agreements, States, political subdivisions, and Indian Tribes must demonstrate that they have the authority, jurisdiction, and the necessary administrative capabilities to compel responsible party cleanup of a site, or perform cleanup cost recovery. • States, political subdivisions, and Indian Tribes may apply for removal response cooperative agreements when a planning period of more than six months is expected. 14.9 ------- SUPERFUND COOPERATIVE AGREEMENT • Transfers Money or Services to the State or Other Recipient for Lead or Support Agency Activities • Allows the State or Other Recipient to Take Responsibility for Leading the Response • Defines the Level of EPA involvement • Secures the State’s CERCLA Assurances VIEWGRAPH # 9 TITLE: Superfund Cooperative Agreement KEY POINTS: A Superfund Cooperative Agreement(Superfund CA) is a Federal funding mechanism that transfers funds to a State, political subdivision, or federally recognized Indian Tribe to carry out a program that will benefit the public, and allows for substantial Federal involvement in the design and implementation of that program. A Superfund CA is a versatile funding mechanism because it can be applied to a wide range of activities from the very beginning to the conclusion of a cleanup effort. • A Superfund CA, in particular, is an agreement between EPA and a State, political subdivision, or Indian Tribe that forms a working relationship in which both parties provide funding and services related to the design and implementation of Superfund responses. • Through a Superfund CA, EPA provides funds to a State to carry out site cleanup or to conduct activities related to cleanup, such as enforcement actions. Core Program CAs provide non-site specific funds to States to improve administrative functions and compliance with CEACLA. States, however, may be required to cover a percentage of the cost for both cleanup activities and nOn-site specific funding, which is documented in the Superfund CA. (More detail on cost sharing is given later.) • Under a Superfund CA, the State leads the cleanup activity and EPA provides technical and administrative assistance. The Superfund CA application process is designed so that these roles can be clearly and specifically delineated. EPA: To-Do List State: Assurances 14.10 ------- VIEWGRAPH # 9 (Cont.) TiTLE: Superfund Cooperative Agreement KEY POINTS: CAs thus provide an opportunity for the recipients to become actively. involved in and responsible for the national cleanup effort that EPA is promoting through Superfund. GAs also allow EPA to stay directly involved in the planning and implementation of a recipient-lead cleanup. 14.11 ------- AUThORIZA11ON OF SUPERFUND COOPERA11VE AGREEMENTS VLEWGRAPH # 10 Legislation and Regulations That Authorize Superfund CAs include: • The Federal Grant and Cooperative Agreement Act of 1977 • CERCLA, Section 104(dXl) • “Cooperative Agreements and Supertund State Contracts for Superfund Response Actions,” 40 CFR Part 35, Subpart 0 TITLE: Authorization of Superfund Cooperative Agreements KEY POINTS: • The Federal Grant and Cooperative Agreement Act of 1977 defines grants and cooperative agreements. EPA’s assistance regulations describe how to apply for and manage a grant or Superfund CA to carry out prescribed, authorized activities. • Under CERCLA 1 04(d)(1), EPA has the authority to transfer funds,and authorize State-lead Superfund responses through a Superfund CA. • “Cooperative Agreements and Superfund State Contracts for Superfund Response Actions,” 40 CFR Part 35, Subpart 0 codifies the requirements governing CERCLA-funded CAs and SSCs. 14.12 ------- SUPERFUND RESPONSE ACTIVITIES H aidou. Hateflale • Removal • Remedial Re8ponse • Enforcement VIEWGRAPH # 11 TITLE: Superfund Response Activities. KEY POINTS: There are three different types of response activities now defined by Superfund legislation: removal, remedial (including pre-remedial), and enforcement activities. • Removals include both time-critical and non-time-critical responses at a site and are limited in scope and duration to $2 million and 12 months. • Remedial actions are long-term actions taken to prevent, minimize or mitigate exposure and damage to human health or the environment. • When CERCLA was amended, enforcement was included as a response, even though it is not a cleanup activity. Enforcement is the activities EPA or the recipient undertakes to recover costs for cleanup from responsible parties, or to compel a responsible party to clean up a site. 14.13 ------- REMOVAL Hazardous Matertais • Generally Short-Term • An Erneigency Situation • Umfted to $2 MillIon and 12 Months • Consistent With Long-Term Remedial Action When Done at an NPL Site VIEWGRAPH # 12 TITLE: Removal KEY POINTS: Removal actions are short-term actions designed to protect the public from threats to public health, welfare or the environment. Removals can be triggered by burning, leaking, explosion, or other hazardous occurrences. • The removal program provides a flexible response authority since removals can take place at both National Priority Ust (NPL) and non-NPL sites. The NPL contains the sites that are considered of high priority for Fund-financed cleanup, and that are eligible for remedial activities. • States generally undertake removal actions only if a planning period of at least 6 months exists. Removals that must be performed within 6 months are usually handled by EPA. • Removal actions include the following response activities: - Collection and analysis of samples - Provision of alternative water supplies - Installation of security fencing/guard - Treatment of on-site waste - Source control - Evacuation of threatened individuals. 14.14 ------- VIEWGRAPH # 12 (cont.) TITLE: Removal KEY POINTS: Many times additional actions are required to maintain the integrity of the removal. In these instances, States may be required to undertake post removal site control. All State expenses for activities associated with the site • control are wcreditable if the site is eventually listed on the NPL and the expenses are verified by EPA to be direct, out-of-pocket, non-Federal dollars. • A removal can extend up to $2 million and 12 months. The dollar limit includes all obligations from the Fund associated with a particular site, except for costs of §104(b) preliminary assessments and site investigations. The 12-month limit is calculated in calendar days from the date on-site removal work begins, to the date of demobilization from the site. • An exemption to the 12 month, $2 million limit may be granted if: - There is an immediate risk to public health or welfareor the environment - Continued response actions are immediately required to prevent, limit, or mitigate an emergency - Continued response action is otherwise appropriate and consistent with the remedial action tp be taken. • Removal actions at an NPL site must contribute to the efficient performance of any long-term remedial action with respect to the release or threatened release of concern. 14.15 ------- REMEDIAL RESPONSE A Remedial Response Is Long-Term and Involves One or More Phases: • PIuU ,uINy Aaaasim., (PA) • LlstkIg n NVdo. P ,$cdty List (NPt) • R.msdisl ss gat1an( ) • F.salbIItysam(Fs) • Rsm.dy SsisctiaiVR.co,d DscLsIon (ROD) • flsmsdlst Ossign (RD) • R.msdlsi Ac cn (RA) • puvflcnsi . d Fw c oi (OAF) • Ops,s a . d Mslnt., nc (O&M) VIEWGRAPH # 13 TITLE: Remedial Response KEY POINTS: • A remedial response can be undertaken by a government body using the Fund or by a responsible party that has made a commitment or settlement to clean up the site, or has been compelled to do so by a court order. • The Preliminary Assessment (PA), the first phase of a remedial response, is the initial assessment and involves limited actual analysis (so called desk-top review). • The SI may lead to a Hazardous Ranking System (HAS) evaluation (based on limited sampling, weighted for population). The HAS identifies those sites that pose the greatest risk to human health and the environment. An HAS score of 28.5 places a site on the National Priority List (NPL). 14.16 ------- VIEWGRAPH # 13 (cont.) TITLE: Remedial Response KEY POINTS: • NPL listing is required to conduct Fund-financed remedial actions. • Listing on the NPL does not establish the order in which sites will be cleaned up. The order of site cleanup depends on several factors: State ability to provide assurances, studies needed, etc. The final decision on the order of cleanup lies with EPA. • A Remedial Investigation (RI) emphasizes data collection and site characterization. A Feasibility Study (FS) focuses on development of specific alternatives based on general response actions identified in the RI to address site contamination problems. During the FS, the following factors are examined: - Engineering — can it be done? - Cost — is it cost-effective? - Health and Environment -- does it provide a remedy for the problem? - Permanent solutions and alternative treatment — to what extent can these be used? • On average, an RI/FS takes about two years to complete and costs $750,000. The public is encouraged to participate in this activity by, among other things, attending public information meetings to discuss findings and response alternatives. • The Record of Decision (ROD) is the decision document that indicates the selected remedy. Currently, only EPA may select the remedy at a Fund-financed site. • Remedial Design (AD) is the preparation of the plans and specifications to accomplish remedial action. On average, RD takes about one year and costs $700,000. • Remedial Action (RA) is the irnplementat ion or construction of the remedy itself. • Operational and Functional (O&F) is the period that is necessary to ensure the remedy is performing as designed. EPA will provide RA funding until a remedy is Operational and Functional for up to one year. In the case of ground and surface water restoration, EPA may continue funding RA activities until the water meets the protective level as defined in the ROD or up to 10 years. • Operation and Maintenance (O&M) are measures necessary to maintain the effectiveness of the response. O&M is the sole responsibility of the State. 14.17 ------- ENFORCEMENT • Search for Potentially ResponSible Parties •. Negotiation and Litigation to Compel Responsible Party Cleanups • Oversight of Responsible Party Remedial Response • Recovery of Cleanup Costs VIEWGRAPH # 14 TITLE: Enforcement KEY POINTS: Enforcement’s main goal is to compel those responsible for a release of hazardous waste to pay for and/or conduct the cleanup of that release. Once viable responsible parties (RPs) have been identified, enforcement actions include issuing direct administrative orders, reaching out of court settlements, or taking parties to court to compel them to conduct cleanup activities. • EPA or a State will be responsible for oversight of a cleanup carried out by a responsible party. This determination generally is made by of the Region and the State, and is based on that agency’s ability to perform. • If a responsible party cannot be identified quickly enough to address an imminent and substantial endangerment, the Federal Government will respond to the release. Or, if a settlement cannot be reached with an RP, the Federal Government will take action and then seek to recover the cost of response from the AP. EPA policy is to recover costs as each phase is completed, beginning with RI/FS; however, cost recovery can occur at any time in the process. 14.18 ------- SUPPORT AGENCY CAs • Recipients Can Defray the Cost of Their Participation During an EPA-Lead Response • CAs for Support Agency Activftles Can be Awarded to States, Poifticai Subdivisions, and Indian Tribes VIEWGRAPH # 1 TITLE: Support Agency CAs KEY POINTS: • Support Agency CAs provide recipients with funding to promote involvement during EPA-lead response activities. States may also be awarded support agency CAs to undertake a portion of the activities associated with the response. For example, States may use a support agency CA to analyze samples at State laboratories or to initiate the community relations plan. • Section 121(f) of CERCLA and Subpart F of the NCP indicates that State involvement is required for numerous Superfund activities:. - Decisions concerning PA, SI, and HRS activities - Concurrence in deleting sites from the NPL - Long-term planning of remedial responses within the State - Review and comments on any 1) RI/FS activity, 2) all documents leading to issuance of the ROD, 3) the planned RA identified in the ROD, 4) engineering design following selection of an RA, and 5) other technical data reports, decisions, or findings relating to remedial implementation. • Support agency CAs may be awarded as a lump sum if the recipient demonstrates the financial and management capabilities to track all expenditures by site, activity, and operable unit, as applicable. • A support agency CA must not be used to document the State’s assurances. An SSC is necessary to accomplish this purpose. 14.19 ------- CORE PROGRAM CAs Cor. Program CA. Provide Non-Sfte-Speclflc Funding for States and Indian Tribes to: • Establish Procedures for Emergency Responses and Remediatlon of Environmental and Health Risks • Develop Provisions to Satisfy all Requirements and Assurances • Provide General Program Management and Supervision, and Interagency Coordination • tyg ______ Support VIEWGRAPH # 16 TITLE: Coi Program CAs KEY POINTS: • EPA will award a Core Program CA only to the State agency designated by the Governor. • States and Indian Tribes are eligible to receive Core Program CAs (CPCAs) to development and maintain capacity for managing and implementing CERCLA responses. CPCAs cover a State or Indian Tribe’s cost for general management and administration responsibilities that cannot be accounted for on a site-specific basis. • An Attorney General or a political subdivision may implement tasks funded • through a Core Program cooperative agreement if it is more economical for the recipient and benefits to such entities are provided for in an intergovernmental agreement. • There are 6 areas of Core spending: - Establishing emergency response and longer-term remediation • procedures includes developing generic health and safety plans, quality assurance project plans, and community relations plans. - Developing provisions to handle all requirements and assurances includes fiscal and contract management activities for CERCLA such as establishing a fund or financing mechanism to pay for studies and remedial activities (although Core money cannot be used to finance such a fund or financing mechanism). 14.20 ------- VIEWGRAPH # 16 (cont.) TiTLE: Coit Program CAs KEY POINTS: - CPCAs can be used by States to enhance interagency coordination, legal support associated with proper administration of the recipient’s CEACLA program, and management of the State’s overall CERCLA program. Legal assistance relating to CERCLA would include such activities as document review for legal sufficiency, development and refinement of the enforcement program, development of legal authorities, and legal assistance for coordinating applicable or relevant and appropnate requirement (ARAR) identification. - Hiring and training staff for CERCLA includes clerical or administrative support, which cannot be charged to site-specific CAs. - General program management and supervision to support CERCLA would include program planning and direction. - Interagency coordination would include such activities as EPA/State coordination and joint development of strategies, reporting, developing and maintenance of tracking systems, non-site-specific travel, and identification of State ARARs. • All CPCAs are “stand alone” agreements that cannot be merged with any other CAs for a site response. • To receive a CPCA, States must provide a .10% match from direct, out-of-pocket, non-Federal funds. States may use in-kind services to offset their cost share requirements; however, credits earned on a site-specific basis cannot be applied. 14.21 ------- SUPERFUND STATE CONTRACT An SSC Is a Legally Binding Agreement That: • Documents State Assurances for EPA or Polftical Subdivision-Lead Response • Outlines Payment Terms and Statements of Work for the Response $$ + SOW • Identifies Requirements and/or Concerns Related to the Site and the Responsibilities of Each Party During the Response VIEWGRAPH # 17 TiTLE: Superfund State Contract KEY POiNTS: A Superfund State Contract is a mechanism created just for the Superfund program and is not used for any other EPA program. • Unlike a Superfund CA, a Superfund State Contract (SSC) does not award money. Rather, an SSC is a legal document that is required when either EPA or a political subdivision is the lead agency for a response. The .SSC is used to collect the State’s cost share payment while the Superfund CA authorizes EPA to award Funds to begin remedial activity. • An SSC serves two important functions. First, by laying out the roles of each party, an SSC ensures State involvement when the State is not taking primary responsibility for response. Second, the SSC is necessary to document the State’s CEACLA assurances when it is serving as a support agency. • The SSC also lists all program requirements, including EPA-State communication during the response, enforcement and cost recovery • coordination, and identification of EPA and State contacts and roles. 14.22 ------- REQUIREMENT FOR A SUPERFUND STATE CONTRACT 2-Party SSC EPA-Lead ___ 3-Party SSC Poiftical Sub-division Lead VIEWGRAPH # 18 TiTLE: Requirement for a Superfund State Contract KEY POINTS: • A 2-party SSC is required when EPA is planning to lead a remedial action and needs to establish a legal agreement I collect the State’s cost share and obtain other assurances. • A 3-party SSC is required when a political subdivision leads a response action to ensure State involvement as required under CERCLA Section 121(f) and Subpart F of the NCP. If the political subdivision carries out the RA, the SSC is necessary as a legal document to authorize the collection of the State’s cost share and to obtain State assurances. If the original SSC does not address RD/RA activities, it must be amended to expand the scope of work and to provide State assurances before RA commences. • Similar to States, an SSC is required between EPA and a Federally recognized Indian Tribe before an EPA-lead remedial action can take place. • The requirements for administering SSCs for non State-lead remedial responses are codified in EPA’s regulation, “Cooperative Agreements and Superfund State Contracts for Superfund Response Actions,” 40 CFR Part 35, Subpart 0. 14.23 ------- EPA-RECIPIENT ROLES IN SUPERFUND RESPONSE • EPA Hold. Prims Responsibility PA - ad Forth. R.spon.e • State, Political Subdivision, or Indian Tribe May Assist • Support Agency • Stat. Must Provide Assurances Before Fund-Flnanc.d Rem.dlai Action Recipient - Lead . Recipient Holds Prime Responsibility For the Response • EPA I. Responsible For Ov.r.lgld Support Agency • Stat. Must Provide Assurances Before Fund.FInanc.d Remedial ____ Action (except for Indian Tribe. lead) VIEWGRAPH #20 TITLE: EPA-Recipient Roles in Superfund Response KEY POINTS: • EPA and the State hold annual meetings to decide who will take the lead responsibility for each site in the State. • When EPA takes primary responsibility for a response, the State, a political subdivision thereof, or an Indian Tribe may function as a support agency. As a support agency, a State, political subdivision, or Indian Tribe may hold some key responsibilities, but it does not take on the major portion of tasks for the response. • When a State takes the lead, EPA takes on a secondary role and functions as the support agency. • The State must provide certain assurances for both EPA- and State-lead responses. The mechanisms for obtaining these assurances are a Superfund CA for a State-lead response, or a Superfund State Contract for an EPA-lead response. 14.24. ------- CERCLA ASSURANCES VIEWGRAPH #21 • Cost Share • Operation and Maintenance • Off-Site Storage, Treatment, or Disposal • Twenty-year Waste Capacity • Real Property Acquisition TiTLE: CERCLA Assurances KEY POINTS: • There are five assurances required by CEACLA. These assurances are required before EPA or a State may initiate a remedial action. They may also be applicable for removal actions. Each of these assurances will be discussed in the viewgraphs that follow. 14.25 ------- COST SHARING • States Must Share in Costs of Clean-Up Action • Percentage of State’s Cost Share Depends on: - Type of Response • Operator of Facility at Time of Hazardous Waste Release • Cost Share May Be Affected by Credits VIEWGRAPH #23 TITLE: Cost Sharing KEY POINTS: As part of the EPA-State partnership,. CERCLA requires States to share in the cost of Fund-financed response actions performed at sites on the NPL. State cost share ‘is determined by the type of response that is taking place at a site, and who operated the site at the time of the hazardous waste release. Details concerning how to calculate a State’s percentage of cost share will follow. • For publicly operated sites, CERCLA now requires that States must pay at least 50 percent of all response costs (after pre-remedial activities) at the time of an RA. Before SARA amended CERCLA, the 50 percent cost share requirement applied only to publicly owned sites. • Under certain circumstances, credits earned for funding previous responses at NPL sites may be used as cost share (see 35.6285 (c)). 14.26 ------- HOW STATES COST SHARE States Can Provide Their Cost Share with: • CERCLA’ CASH SERVICES CREDIT VIEWGRAPH #25 TITLE: How States Cost Shai KEY POINTS: • States can meet their cost share by providing cash at the time of remedial action, by providing services (e.g., staff time or equipment), or by applying verified CERCLA credit earned through implementation of a Superfund response. • States cannot pay their cost share with Federal funds, property, or services received under another assistance agreement, unless specifically authorized by another statute. • A State will not be reimbursed for costs incurred before a remedial Superfund CA is awarded; or for costs incurred that are inconsistent with the ROD. • The lead State agency is responsible for providing the cost share, but it may enter into intergovernmental agreements with other State agencies or political subdivisions to acquire assistance in meeting the cost share. • Services and equipment cannot be used to meet the SSC cost share unless the State also enters into a SACA and subsequently documents the Superfund CA in the SSC. S Accaii, ( 14.27 ------- OPERATION AND MAINTENANCE State Cleanup • State Assumes Full Responsibility for O&M, Including Maintaining Institutional Controls • EPA Ensures Remedy Is O&F For Up To One Year, Except in Cases Concerning Ground and Surface Water VIEWGRAPH # 26 TITLE: Operation and Maintenance KEY POINTS: • As part of RA, EPA may provide funds for up to one year to ensure the remedy at a site is operational and functional. • However, in the case of ground and surface water restoration, EPA may fund the RA until the water meets the levels specified in the ROD, up to 10 years. The 10-year clock will begin once the last operable unit is in place. EPA encourages States to take the lead for this portion of RA through a Superfund CA if the State does not already have one. • The State must assume all responsibility for O&M at both EPA- and State-lead responses. These responsibilities include maintaining institutional controls and funding and carrying out all O&M activities. • Whenever feasible, the State may negotiate with the local government or political subdivision to undertake O&M activities on behalf of the State. 14.28 ------- • OFF-SITE TREATMENT, STORAGE, OR DISPOSAL Off-She Treatment, Storage, or Disposal Requires an Acceptable Faclifty Which Must: • Meet Requirements of the Resource Conservation and Recovery Act (RCRA) • Have Sufficient Capacity to Handle Waste From Sfte(s) VIEWGRAPH #27 TITLE: Off-Site Treatment, Storage, or Disposal KEY POINTS: The purpose of this assurance is to ensure available and acceptable facilities for the treatment, storage, and disposal of CERCLA wastes, and to avoid having these wastes contribute to future environmental problems. • When an off-site facility is necessary for either remedial or removal actions, the facility must be acceptable to EPA. To determine the acceptability of a facility, EPA will use its cntena for off-site treatment, storage, and disposal of hazardous waste for Superfund sites, in compliance with the requirements of Subtitle C of the Resource Conservation and Recovery Act (RCRA). • When CERCLA waste is to be disposed of outside the State or Indian Tribal lands where the waste is located, the State or Indian Tribe must provide written notification to the appropriate environmental official within the receiving State or Indian Tribal jurisdiction. 14.29 ------- TWENTY-YEAR WASTE CAPACITY 1 H H • States Must Asèure that They Have Adequate Capacity for Disposal or Treatment of Hazardous Wastes for the Next 20 Years • if th. Available Facilities are Outside the State, They Must B. Used In Accordance with an Interstate or Regional Agreement VIEWGRAPH #28 TITLE: Twenty-Year Waste Capacity KEY POINTS: States are required by CERCLA to assure that they have adequate capacity for disposal or treatment of hazardous wastes generated in the State for 20 years following the award date of the CA. • States provide this assurance through of a Capacity Assurance Plan (CAP) that must be approved by EPA. A State that does not have an EPA-approved CAP cannot meet this assurance. • If a State does not have adequate capacity for waste disposal within its borders, the State may coordinate with other States to ensure available facilities for waste disposal outside its borders. To facilitate this arrangement, many States have already negotiated interstate or Regional Agreements for waste transport or disposal. • Specific guidance on the development of CAPs appeared in the Federal Register, Volume 53, December 29, 1988, pp. 52783 - 52784. 14.30 ------- • ACCEPTiNG INTEREST IN REAL PROPERTY • To Implement an RA for a Superfund Response, Acquisition of Real Property May Be Necessary If Property Is Acquired by the Federal Government (EPA-Lead), States Must Assure That They Will Accept Transfer of Acquired interest On or Before Completion of the Response Action VIEWGRAPH #29 TITLE: Accepting Interest in Real Property KEY POINTS: If EPA determines that an interest in real property must be acquired in order to conduct a response action, as a general rule, the State or Indian Tribe in which the property is located must agree to acquire and hold the necessary property interest. Where the property interest is acquired by the United States government as part of a permanent relocation or other response action, the State or Indian Tribe must agree to accept transfer of the acquired interest on or before completion of the response action. In the case of permanent relocations and certain other response actions, it is necessary to acquire ownership or some lesser interest in real property. EPA will determine when an acquisition of any property interest is necessary. Generally, the States or Indian Tribes will carry out the required acquisition and hold title to the property interest. However, there may be instances in which the State lacks authority to condemn or otherwise acquire property. The United States government may then agree to acquire the necessary interest, but only if the State first agrees to accept transfer of the acquired interest. • For each approved acquisition, States and Indian Tribes must comply with applicable Federal regulations for real property acquisition (See 49 CFR Part 24). 14.31 ------- OThER AGREEMENTS IMPORTANT FOR SUPERFUND • Superfund Memorandum of Agreement • Interagency Agraement • Superfund Grant or Research CA VIEWGRAPH #31 TITLE: Other Agreements Important for Superfund KEY POINTS: There are other types of assistance and acquisition mechanisms that are important for the Superfund program, such as the Superfund Memoranda of Agreement, Interagency Agreements, Technical Assistance Grants and Research GAs. How these mechanisms compare to CAs and SSCs will be discussed in the following viewgraphs. 14.32 ------- DEFINING EPA AND STATE ROLES ThROUGH SMOAs Regional State Planning SMOA • Definftlon of EPA and State Roles for Planned Superfund Program • Process and Procedures for EPA-State interaction During Conduct of Superfund Program VIEWGRAPH #32 TITLE: Defining EPA and State Roles Through SMOAs KEY POINTS: A Supertund Memorandum of Agreement (SMOA) is a planning document that EPA and a State negotiate to define their roles for implementing Superfund responses within that State. A SMOA is intended to ensure that the State has an opportunity to participate in Superfund responses, to determine pnonties, to delineate lead and support agencies for different responses, to increase the number of Superfund activities that take place in a State, and to improve EPA-State collaboration. • SMOAs are not required for State involvement in response actions and are not legally binding, but each State and Region are encouraged to enter into a SMOA. • A SMOA does not supercede a Superfund CA or SSC but is intended to complement response agreements and facilitate the assignment of EPNState roles and responsibilities negotiated during annual consultations. Specific issues/items described in the SMOA (such as review times) should also be clearly documented in the Superfund CA or SSC in order to make them legally binding. 14.33 ------- INTERAGENCY AGREEMENT FOR EPA-LEAD SUPERFUND RESPONSE • To Document SOW and Roles and ReSoon.ibIJfties for a Superfund Response • Signatories May include: EPA - Another Government Agency VIEWGRAPH #33 TITLE: Interagency Agreement for EPA-lead Superfund Response KEY POINTS: An Interagency Agreement (lAG) is a legally binding, obligating document between EPA and another Federal agency under which goods and services are provided. An lAG documents the statement of work (SOW) and roles and responsibilities. • States awarded CAs may also use lAGs to transfer Fund money to other State agencies that may undertake some portion of the response actions. • Specifically, EPA uses an lAG when the U.S. Army Corps of Engineers (COE) manages an AD/RA response at an EPA-lead site. • Development of an lAG requires setting up an appropriate accounting system for implementing the lAG. All Superfund lAGs contain special provisions for record retention, reporting, and cost recovery. Cost documentation requirements in Superfund lAGs distinguish them from other lAGs with EPA. These requirements are necessary to support unique cost recovery efforts under Superfund. (See Module XIII.) 14.34 ------- SUPERFUND GRANTS AND OThER ASSISTANCE • Technical Assistance Grants (TAGs) • Superfund Innovative Technology Evaluation Program (SITE) • Research Grants Environmental Research Centers (ERCs) VIEWGRAPH #34 TITLE: Superfund Grants and Other Assistance KEY POINTS: • There are several types of grants that are available under the Superfund program: Technical Assistance Grants (TAGs), grants for Superfund Innovative Technology Evaluation (SITE), and research grants. In addition, there is funding through GAs for research activities at Environmental Research Centers (ERCs). • TAGs are available to any group of individuals that may be affected by an actual or potential hazardous release at any facility on the NPL Only one TAG per site is awarded. The grant, up to $50,000, may be used to obtain technical assistance for interpreting information regarding the site. In some cases, EPA may allow a waiver of the $50,000 limit. The grants are intended to help people gain a better understanding of the technical issues pertaining to sites in their community, to hire advisors if necessary, and to be able to participate in the program and comment on site-related documents. The group must contribute a minimum of 20% of the total costs of the technical assistance project. • The SITE program was developed to provide an adequate technological data base to support the Superfund program. The goal of the SITE program is to promote the use of new methods for disposal of hazardous waste other than land disposal and to develop new means of measurement and monitonng technologies. • Research grants fund activities such as research and training related to the generation and disposal of hazardous waste and the dissemination of pertinent findings on the subject. Research grants apply to studies in the areas of environmental science and engineering. • ERCs receive funding through GAs, not grants, to conduct research in areas specifically designated by EPA. There are currently eight ERCs and most of them are associated with a laboratory of the Office of Research and Development (ORD). Many of these áenters are carrying out research that is pertinent to the Superfund program. 14.35 ------- |