fl

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GRANTS MANAGEMENT
  BASIC PROGRAM
   INTRODUCTION

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.
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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

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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

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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

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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

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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

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• 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

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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

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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

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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

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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

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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

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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

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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

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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

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EPA BUDGET
FORMULATION AND EXECUTION
( )
MODULE II

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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REQUIREMENTS GOVERNING
EPA ASSISTANCE AGREEMENTS
#\1 DST4
PRO1
MODULE III

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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40 CFR PART 32
• implements Executive Order 12549, Debarment and
Suspension Rules For Nonprocurement Activities
• Describes Drug-Free Workplace Requirements For
Assistance Recipients
VIEWGRAPH # 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

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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

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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

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40 CFR PARTS 40,45,46, and 47
• PART 40 Requirements for Research and Demonstration Grants
• PART 45 Requirements for Training Assistance
• PART 46 Requirements for Fellowships
• PART 47 Environmental Education Grants
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

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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

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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

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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

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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

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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)
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FEDERALLY.RECOGNIZED INDIAN
TRIBES
40 CFR PARTS 30 AND 33

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40 CFR PART 31 FOR WORK PERFORMED
UNDERTHEAMENDEDSCOPEOFWORK.
4 OCFRPARTS3 OAND33FORALL
(mIERwoRJc
40 CFR PART 31
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40O RPART35.SUBPARTO(AJq ER
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NON.PROflT ORGANIZATIONS
40 CFR PARTS 30 AND 33
40 CFR PARTS 30 AND 33
40 CER PARTS 30 AND 33
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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
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40 CFR PARTS 30 AND 33
40 CFR PARTS 30 AND 33
N/A
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(g
EPA INFORMATION SYSTEMS
MODULE IV

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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THE ASSISTANCE AGREEMENT:
AWARD PHASE
MODULE VI

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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

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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

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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

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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

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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

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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

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• 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

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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

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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

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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

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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

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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.
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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

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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)
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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

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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

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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

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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

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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.
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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

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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.
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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.
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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

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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.
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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.
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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

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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.
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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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CLOSEOUT OF ASSISTANCE AGREEMENTS
BY ThE END OF ThiS MODULE YOU WILL BE ABLE TO:
• Understand the Process For Closeout of Assistance
Agreements
• Describe the Roles and ResponsibIlities During Closeout.
VIEWGRAPH # 1
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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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• 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

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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

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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

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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

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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

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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

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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

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, S7 %
(i).
INTERAGENCY AGREEMENTS
MODULE XIII

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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

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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

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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

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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

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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

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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

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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

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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

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• 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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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,, s
( )
ThE SUPERFUND PROGRAM
MODULE XIV

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.
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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.
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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.
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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

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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, $2 million limit may be granted if:
- There is an immediate risk to public health or welfareor the environment
- Continued response actions are immediately required to prevent, limit,
or mitigate an emergency
- Continued response action is otherwise appropriate and consistent with
the remedial action tp be taken.
• Removal actions at an NPL site must contribute to the efficient performance of
any long-term remedial action with respect to the release or threatened release
of concern.
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REMEDIAL RESPONSE
A Remedial Response Is
Long-Term and Involves One
or More Phases:
• PIuU ,uINy Aaaasim., (PA)
• LlstkIg n NVdo. P ,$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

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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

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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.
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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

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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

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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.
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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.
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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.
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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.
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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.
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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)).
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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

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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

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• 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.
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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.
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• 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).
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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.
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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.
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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.)
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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.
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