Q/ns
Q>^//cm/a ., cpec-y cf \
h&MQM
QJiatt 20-22, L937
-------
NPS COORDINATORS MEETING
Region 4
Atlanta, Georgia
Final Agenda
May 20-22, 1997
Tuesday. May 20.1997
8:00 - 8:30 I. Opening Session
a. Welcome
b. Agenda Overview/Meeting Rules
c. Announcements
8:30-10:30 II. Tribe/State/EPA Update
Tell Us What's New With Your Program
(New State/Tribal Laws, Policies, State Budgets,
Staffing Changes, FY 98 Federal Budget,
TMDL Lawsuits, etc.).
Maximum 5 minutes per program.
10:30-10:45 Break
10:45-11:45 III. Program Issues
a. Federal Consistency
b. State/Tribe Status Reports
Discuss the following issues as they pertain
to your program:
-Management Plan Updates/Enhanced Benefits
-Watershed Approach Framework
-Performance Partnership Agreements/Grants
-NPS Funding for Tribes
Maximum 10 minutes per program
11:45-1:00 Lunch
1:00-2:30 b. State/Tribe Status Reports—continued
Break
2:30 - 2:45
2:45 - 3:00
Bo Crum, Facilitator
Beverly Bannister
Corrine Wells
Corrine Wells, Facilitator
Each State and Tribe
Patti Lodge, Facilitator
Amy Gambrill
Each State and Tribe
Each State and Tribe
c. Dialog and Discussion on Program Issues,
Including Questions and Answers
3:30-4:30 IV. Grant Administration/319 Projects
Project Summary
(Share at least one good and one bad project.)
Maximum 8 minutes per program.
Betty Barton, Facilitator
Each State and Tribe
4:30
Adjourn
Group Dinner at Mick's
-------
Day 2 - Wednesday. May 21.1997
8:00 -10:30 IV. Grant Administration/319 Projects -continued
a. Project Summary (Continued)
b. Updates on Applicable Regs, Circulars, Interpretations
c. Nonfederal Match/Cost Share Issues
d. Using SEE (Senior Environmental Employees)
Program to Ease State Staff Shortages
e. GRTS
Betty Barton, Facilitator
Each State and Tribe
Dorothy Dimsdale, Brenda Banks
Group Discussion
Tom Welborn
Group Discussion
10:30-10:45 Break
10:45-11:45 f. Project Selection Process Each State and Tribe
How does your program select projects for funding?
Maximum 10 minutes per program.
11:45 -1:00 Lunch
1:00 - 2:15 g. Project Selection Process-continued Each State and Tribe
2:15-2:30 Break
2:30 - 4:30 V. States Needs Survey Follow-up Outside Facilitators
Develop EPA-State-Tribe Action Plans
4:30 Adjourn
Day 3 - Thursday. May 22.1997
8:00- 10:30 VI. Technical Issues
a. TMDLs/303d
b. Streambank Protection/Rcsloration/Evaluation
c. R4 Rosgen Stream Classification Field Guide
d. Restoration Strategies for Closed Shellfish Waters
-fecal coliform, etc
Don Green, Facilitator
Ron Mikulak
General Discussion
Betty Barton
General Discussion
10:30- 10:45 Break
10:45-11:45 e. BMPs-dcveloping, identifying, modifying
f. Animal Waste Issues—EPA and State Updates
11:45- 12:00 Meeting Wrap
12:00 noon Adjourn
General Discussion
Ira Linville
Tom Welborn
Npsmtg2 agn May 19,1997
-------
OneStep®
)»,ir»C¥ CVCTCM ¦
Contents
Directories
index system ¦ state & Tribal NPS Coordinators
¦ State NPS Staff
¦ EPA NPS Staff
Grants
¦ Management Effectiveness References
¦ A-87 Rev.
¦ 40 CFR 30 Rev. 2
TMDLs
3
Animal Waste
Performance Partnerships
¦ Georgia EPD - Comprehensive Agreement
¦ North Carolina - Air Quality, Water Quality
& RCRA Agreement ej
¦ Mississippi - Pre-Partnership Agreement
CZARA
¦ Coastal States Organization - Concerns ^
¦ NOAA/EPA Response Q
Miscellaneous References
8
9
^ Cardinal"
10
-------
Cardinal0
-------
REGION 4
STATE NONPOINT SOURCE PROGRAM COORDINATORS
Mr. Norman Blakey, Chief Ph. 334/213-4310
Nonpoint Source Unit Fax 334/213-4399
Office of Education and Outreach
Alabama Department of Environmental Management
1890 AA W. L. Dicksinson Drive
Montgomery, Alabama 36109-2600
nb@adem.dot.state.al.us
Mr. Eric H. Livingston Ph. 904/921-9915
Nonpoint Source Management Section Fax 904/921-5217
Florida Department of Environmental Protection
Twin Towers Office Building
2600 Blair Stone Road
Tallahassee, Florida 32399-2400
livingston_e@dep.state.fl.us
Mr. Larry Hedges, Program Manager
Nonpoint Source Program
Georgia Department of Natural Resources
Environmental Protection Division
Floyd Towers East
205 Butler Street, S.E.
Atlanta, Georgia 30334
wmep.larry_hedges@mail.dnr.state.ga.us
Ms. Corrine Wells, Supervisor
NPS Pollution Control Section
Kentucky Natural Resources
& Environmental Protection Cabinet
Department of Environmental Protection
Fort Boone Plaza, 14 Reilly Road
Frankfort, Kentucky 40601
wells_c@mail.nr.state.ky.us
Mr. Robert Seyfarth, Chief
Water Quality Management Branch
Department of Environmental Quality
Office of Pollution Control
P.O. Box 10385
Jackson, Mississippi 39289-0385
rseyfarth@deq.state.ms.us
Ph. 404/656-4887
Fax 404/657-7379
Ph. 502/564-3410
Fax 502/564-4245
Ph. 601/961-5160
Fax 601/961-5376
-------
State Nonpoint Source Coordinators
Page 2
Mr. David Harding Ph. 919/733-5083
NPS Program Coordinator Fax 919/715-5637
Water Quality Section
North Carolina Department of Environment,
Health and Natural Resources
P.O. Box 29535
Raleigh, North Carolina 27626-0535
david@dem.ehnr.state.nc.us
Mr. Doug Fabel
NPS Program Coordinator
Division Water Quality Monitoring
& Shellfish Sanitation
South Carolina Department of Health
& Environmental Control
2600 Bull Street
Columbia, South Carolina 292201
fabeldj@columb35.dhec.state.sc.us
Mr. Greg Upham
Tennessee Department of Agriculture
Ellington Agricultural Center
Nashville, Tennessee 37204
tnnps@juno.com
Ph. 803/734-4837
Fax 803/734-5216
Ph. 615/360-0690
Fax 615/360-0333
-------
EPA Region 4
TRIBAL NONPOINf SOURCE COORDINATORS
5/15/97
Mr. Eddie Almond, Director
Tribal Environmental Office
The Eastern Band of Cherokee Indians
P.O. Box 455
Cherokee, North Carolina 28719
ealmond@dnet.net
Ph. 704/497-3814
Fax 704/497-2952
Ms. Bernadette Hudnell
Mississippi Band of Choctaw Indians
Tribal Office Building
P. O. Box 6010
Philadelphia, MS 39350
bhudnell@netdoor.com
Ph. 601/650-7313
Fax 601/656-0218
Mr. Steve Terry
Miccosukee Tribe of Indians of Florida
P. O. Box 440021; Tamiami Station
Miami, FL 33144
esoterry@shadow.net
Ph. 305/223-8380
Fax 305/553-3644
Mr. Steve Stillwell Ph. 334/368-9136 ext. 681
Poarch Band of Creek Indians
5811 Jack Springs Road
Atmore, AL 36502
Mr. Craig D. Tepper, Director Ph. 954/966-6300
Water Resources Management Fax 954/967-3489
Seminole Tribe of Florida
6300 Stirling Road
Hollywood, Florida 33024-2153
water@gate.net
-------
NONPOINT SOURCE
State Staff Directory
May 15,1997
AL, FL, GA, KY, MS, NC, SC, TN
-------
ALABAMA
Name & Contact Information
TitlG and/or Description
Sue Robertson
AL Department of Environmental Management
Office of Education & Outreach
1890 AA W. L. Dicksinson Drive
Montgomery, AL 36109-2600
Ph. 334/213-4307
Fax 334/213-4399
srr(S>adem. state, al. us
Division Chief, Office of
Education & Outreach
Norman Blakey
Ph. 334/213-4310
nb@adem.state.al.us
Chief, NPS Unit
Tony Cofer
Ph. 334/213-4317
tlc@adem. state, al. us
Project Coordinator
Steve Foster
Ph. 334/213-4309
scf@adem. state, al. us
Project Coordinator
Patricia Hurley
Ph. 334/213-4323
pah@adem.state.al.us
Project Coordinator
Betty Sims
Ph. 334/213-4306
hhsrSariem state al ns
Secretary
-------
FLORIDA
Name & Contact Information
Title and/or Description
Eric H. Livingston
FL Department of Environmental Protection
Nonpoint Source Management Section MS 3570
Twin Towers Office Building
2600 Blair Stone Road
Tallahassee, FL 32399-2400
Ph. 904/921-9915
Fax 904/921-5217
LIVINGSTON E@dep.state.fl.us
Chief, NPS Management
Section
Vacant
Secretary
David Beebe
ph. 904/921-9459
BEEBE D@dep.state.fl.us
Finance & Accounting
Manager
Jennie M. Bodiford
ph. 904/921-9479
BODIFORD J@dep.state.fl.us
Grant Specialist
Dave Worley
Ph. 904/921-9919
WORLEY_D@dep.state.fl.us
Environmental Specialist
Coastal Issues, Land
Management & Contract
Management
Mike Thomas
Ph. 904/921-9411
THOMAS_ M@dep.state.fl.us
Professional Engineer
Agricultural NPS Management
& BMPs
Mike Scheinkman
Ph. 904/921-9918
SCHEINKMAN M@dep.state.fl.us
Environmental Specialist
Lake Management & Contract
Management
Dan DeWist
Ph. 904/921-9866
DEWI EST_D@dep.state.fl.us
Environmental Specialist
Erosion, Sediment, &
Stormwater Inspector Training
& Certification Program
Patti Sanzone
Ph. 904/921-9917
SANZONE_P@dep.state.fl.us
Environmental Specialist
-------
GEORGIA
Name & Contact Information
Title arid/or Description
Larry Hedges
GA Department of Natural Resources
Environmental Protection Division
Floyd Towers East
205 Butler Street, S.E.
Atlanta, GA 30334
Ph. 404/656-4887
Fax 404/657-7379
larry hedges@mail.dnr.state.ga.us
NPS Program Manager
Frank Carubba
ph. 404/657-9488
frank carubba@mail.dnr.state.ga.us
319 Unit Coordinator
Broughton Caldwell
ph. 404/651-5492
broughton_caldwell@mail.dnr.state.ga.us
Environmental Specialist
Vacant
ph. 404/656-0099
Adopt-A-Stream
Coordinator
Terry Green
ph. 404/651-5482
terry green@mail.dnr.state.ga.us
Unit Coordinator
Joe McCoy
ph. 404/651-5481
joe mccoy@mail.dnr.state.ga.us
Environmental Specialist
Eve Funderburk
ph. 404/656-0069
eve funderburk@mail.dnr.state.ga.us
Environmental Specialist
Linda George
ph. 404/656-6329
linda_george@mail.dnr.state.ga.us
Environmental Specialist
Ted Mikalsen
ph. 404/651-5494
Ted_Mikalsen@mail.dnr.state.ga.us
Urban & Forestry Activities
Petey Giroux
ph. 404/651-9998
petey_giroux@mail.dnr.state.ga.us
NPS Education Coordinator
-------
KENTUCKY
Name & Contact Information
Title and/or Description
Corrine Wells
KY Natural Resources & Environmental Protection
Cabinet
Department of Environmental Protection
Fort Boone Plaza, 14 Reilly Road
Frankfort, KY 40601
Ph. 502/564-3410, ext. 495
Fax 502/564-4245
wells c@mail.nr.state.ky.us
Supervisor, NPS Pollution
Control Section
Mariam Wiley
Ph. 502/564-3410, ext. 471
wiley m@mail.nr.state.ky.us
NPS Section Secretary
Kathleen O'LKeary
Ph. 502/564-3410, ext. 467
oleary@mail.nr.state.ky.us
NPS Contract Manager
Lajuanda Maybriar
Ph. 502/564-3410, ext. 481
E-Mail Address:
Environmental Biologist
Wendy Romain
Ph. 502/564-3410, ext. 661
romain@mail.nr.state.ky.us
NPS Contract Manager
Peter Goodmann
Ph. 502/564-3410, ext. 458
E-Mail Address:
Groundwater Branch Manager
David Leo
Ph. 502/564-3410, ext. 443
E-Mail Address:
Technical Services Section
Supervisor
Jack Moody
Ph. 502/564-3410, ext. 318
E-Mail Address:
Technical Services Section
-------
MISSISSIPP
Name & Contact Information
Title and/or Description
Robert Seyfarth
MS Department of Environmental Quality
Office of Pollution Control
P.O. Box 10385
Jackson, MS 39289-0385
Ph. 601/961-5160
Fax 601/961-5376
rseyfarth@its.state.ms.us
Chief Water Quality
Management Branch
Zoffee Damash
Ph. 601/961-5137
E-Mail Address:
Assist NPS Coordinator
Rob Millettee
Ph. 601/961-5149
E-Mail Address:
Complaint Response
Enforcement
Laura Beiser
Ph. 601/961-5373
E-Mail Address:
Education Specialist
Randy Reed
Ph. 601/961-5158
E-Mail Address:
Assist & Monitoring
-------
NORTH CAROLINA
Name & Contact Information
Title and/or Description
Brian Bledsoe
NC Department of Environment, Health & Natural
Resources
P.O. Box 29535
Raleigh, NC 27626-0535
Ph. 919/733-5083
Fax 919/715-5637
brian@dem.ehnr.state.nc.us
Acting NPS Program
Coordinator Water Quality
Section
Linda Hargrove
Ph. 919/733-5083, ext. 352
linda@dem.ehnr.state.nc.us
Evironmental Engineer
Rich Gannon
Ph. 919/733-5083, ext. 356
rinh^3)dpm.ehnr.statp nnus
Environmental Specialist
-------
SOUTH CAROLINA
Name & Contact Information
Title and/or Description
Doug Fabel
SC Department of Health & Environmental Control
2600 Bull Street
Columbia, South Carolina 292201
Ph. 803/734-4837
Fax 803/734-5216
fabeldj@columb32.dhec.state.us
NPS Program Coordinator
Division of Water Quality
Wanda Hutto
Ph. 803/734-4813
hi ittnwkfo)r:nli imh3? rihen Rtatfi us
Grants Coordinator
-------
TENNESSEE
Name & Contact information
Title and/or Description
Greg Upham
TN Department of Agriculture
Ellington Agricultural Center
Hogan Road
Nashville, TN 37204
Ph. 615/360-0690
Fax 615/360-0335
tnnps@juno.com
Manager Nonpoint Source Manager
Jennifer Thompson
Ph. #615/360-0689
tnnps@iuno.com
Environmental Specialist
Public Awareness & Project
Management
Mandy Clark
Ph. 615/359-2211
Educational Consultant
Education
Tim Thompson
Ph. #615/360-0553
tnnps@juno.com
Environmental Specialist
Project Management
Vacant
Secretary
Don Green
Ph. 615/360-0692
tnnps@juno.com
Assistant Manager
-------
EPA Region 4
SURFACE WATER QUALITY GRANTS PROJECT OFFICERS
Coastal Programs and Surface Water Quality Grants Section
Fax(404) 562-9343
Section Chief
Bo Crum (404) 562-9352
Alabama & Poarch Tribe
Steve Blackburn (404) 562-9397
blackburn.steven@epamail.epa.gov
Florida & Seminole & Miccosukee Tribes
Drew Kendall
kendall.drew@epamail.epa.gov
Georgia
Kevin Thames (404) 562-9384
thames.kevin@epamail.epa.gov
Kentucky
Betty Barton (404) 562-9381
barton.betty@epamail.epa.gov
Mississippi & Choctaw Tribe
Ron Phelps (404) 562-9390
phelps.ron@epamail.epa.gov
North Carolina & Cherokee Tribe
Mark Nuhfer (404) 562-9393
nuhfer.mark@epamail.epa.gov
South Carolina
Duane Robertson (404) 562-9398
robertson.duane@epamail.epa.gov
Tennessee
Howard Marshall (404) 562-9392
marshall.howard@epamail.epa.gov
Watershed Support Specialist
Glenda Miller (404) 562-9389
miller.glenda@epamail.epa.gov
Office Automation Assistant
Tressa Turner (404) 562-9366
Revised May 15,1997
-------
Cardinal
-------
.'sXv.vXs-.
!p«ntg»tip:mmmiiiiiiuiiu
'Vff/i nn^/t /r7tr/t/ff/r/tt i
m&mm
\ •:
REGION 4
-------
EPA INCREASED GRANTS
MANAGEMENT EMPHASIS
1996 FEDERAL MANAGER'S FINANCIAL
INTEGRITY ACT REPORT TO THE
PRESIDENT CITED GRANTS
MANAGEMENT AS EPA MATERIAL
WEAKNESS
I- ADMINISTRATOR BROWNER AND
DEPUTY ADMINISTRATOR HANSEN
TRACKING PROGRESS OF EPA GRANTS
MANAGEMENT
-------
L iSPECTOR GE1 ,ERAL MARTIN S
TESTIMONY TO CONGRESS
^^^1996
"...EPA did not get what it paid for. These
conditions occurred because recipients did not
always fulfill their responsibilities to carry out the
activities specified in the assistance agreements..!
For the most part, these problems also existed
because EPA did not fulfill its obligation to
adequately monitor assistance agreement
activities, and apply the sanctions available when
recipients did not perform."
-------
IM SPECTOR MARTIN'S TESTIMONY
(Cont.)
"...This audit showed that project officers and
grants specialists...did not thoroughly review
grant applications, perform site visits, review
payment requests, obtain single audit reports,
provide final certifications, or complete
closeouts. In effect, EPA merely awarded the
assistance agreements and paid the recipients'
claims without knowing whether the costs were
legitimate, or the work...was performed."
-------
INSPECTOR MARflN'S TESTIMONY
(Cont.)
-------
CURRENT OIG AUDIT FINDINGS
"...WE FOUND THAT...TURNOVER
OF...PROJECT OFFICERS WAS HIGH AND
THEIR INSIGHT...WAS LOST BECAUSE NO
[PROGRAM/PROJECT] EVALUATIONS
WERE DOCUMENTED."
¦ EPA RESPONSIBILITY: DOCUMENT
EVALUATIONS/REVIEWS
¦ RECIPIENT RESPONSIBILITY: PROVIDE
INFORMATION TO PROJECT OFFICER FOR
DOCUMENTATION.
mmwmm
-------
CURRENT OIG AUDIT FINDINGS
(Cont.)
¦ ¦ ¦ I
' ¦ ¦ ¦
AND ANALYZE INFORMATION ON AN
ONGOING BASIS. SUCH ACTIONS WOULD
HAVE RESULTED IN IMPROVING THE
MANAGEMENT AND THE SUCCESS OF THE
PROGRAM."
¦ EPA RESPONSIBILITY: NEGOTIATE UP FRONT
INFORMATION GATHERING WITH STATES.
¦ RECIPIENT RESPONSIBILITY: PROVIDE
NEGOTIATED INFORMATION TO EPA IN TIMELY
-------
CURRENT OIG AUDIT FINDINGS
(Cont.)
"THE PROJECT OFFICER SHOULD
PERFORM A SUBSTANTIVE REVIEW OF
FINAL REPORTS AND FOLLOW-UP WITH
GRANTEES THAT DO NOT SUBMIT ONE
TIMELY. "
EPA RESPONSIBILITY: TIMELY REVIEW OF
FINAL REPORTS FOR GRANTS CLOSE OUT.
RECIPIENT RESPONSIBILITY: PROVIDE FINAL
REPORTS AND OTHER NECESSARY CLOSE-OU
INFORMATION ON GRANT.
-------
CURRENT OIG AUDIT FINDINGS
(Cont.)
VI
THE PROJECT OFFICER SHOULD
ALSO PERIODICALLY CONTACT THE
GRANTEE TO DISCUSS PROGRESS OR
PROBLEMS...."
¦ EPA RESPONSIBILITY: PERFORM
OVERSIGHT/MONITORING (INCLUDING
SITE VISITS AS APPROPRIATE) OF
GRANTS.
¦ RECIPIENT RESPONSIBILITY: DISCUSS
PERFORMANCE PROBLEMS WITH
PROJECT OFFICERS IN TIMELY MANNER.
i
:V
llbli!!D Ji- ' v\,, - L"
-------
FOCUS AREAS
PROJECT OFFICER TRAINING
applicationTpre-award
MONlTORTNG/OVERSrGRT
CtOSE^ODT/PROPERTYMGT.
< s v
.•.V. « W -*
>.;.. ,W3§§5
rMP
' 'T*
Wvj&XvX^vvlylrLvv^Xi !!*¦<. ... . .-i
~?s - " v v -' 'wr^W'1 > '"" -
.. \m
-------
MER RECOMMENDATIONS
Hold periodic PO/GMO meetings
Provide subject-matter training to
GMO/POs
Provide refresher PO training
Develop and use application revie1
checklist
Revise GMO application checklist
Require complete Decision Memo:
Address deliverables and equipm
disposition in Decision Memos
Document performance problems
Redirect agency resources (time
money) to grants management
Provide support to POs in addres:
nonperformance
Develop clost-out procedures
Conduct site visits
-------
GRANTS
^ MANAGEMENT
,^L EFFECTIVENESS
x~4 REVIEW -
RECOMMENDATIONS
FOR STATES
-------
GRANTS MANAGEMENT FOR
STATES
¦ HOLD PERIODIC MEETINGS BETWEEN
FINANCIAL AND PROGRAM STAFF TO
ENSURE TOTAL GRANTS MANAGEMENT
¦ PROVIDE SUBJECT MATTER TRAINING ON
GRANTS-RELATED MATTERS (I.E., POLICIES,
PROCEDURES, REGULATIONS, ETC.)
¦ USE A CONSISTENT APPLICATION CHE©K$?T
TO ENSURE COMPLETE APPLICATION
-------
GRANTS MANAGEMENT
(Cont.)
¦ REDIRECT AGENCY RESOURCES
(PERSONNEL, TIME AND MONEY) TO GRANTS
MANAGEMENT
¦ PROVIDE MANAGEMENT SUPPORT IN DEALING
WITH NONPERFORMANCE
¦ DEVELOP CONSISTENT CLOSE-OUT
PROCEDURES AND ENSURE THAT CLQS^OTT
INFORMATION (I.E., FSR, FINAL REPOR%
ETC.) SUBMITTED IN TIMELY MANNEft^
-------
GRANTS MANAGEMENT
(Cont.)
ADDRESS DELIVERABLES AND EQUIPMENT
PURCHASE/DISPOSITION IN INITIAL
NEGOTIATIONS
DOCUMENT PERFORMANCE PROBLEMS AND
NOTIFY EPA IMMEDIATELY WITH PROPOSED
SOLUTIONS
CONDUCT SITE VISITS TO ENSURE
MONITORING/OVERSIGHT OF GRANTS ^
-------
FACT SHEET
EXTENDING GRANT PROJECT/BUDGET PERIODS
—PART 31 (State, Local and Tribal Governments) AND OLD PART 30 RECIPIENTS
(Awards Made to Institutions of Higher Learning and Non-profit Organizations
Prior to 2/15/96)-
* Must obtain prior approval from the award official whenever there is a need to
extend the period of availability of funds.
—NEW PART 30 RECIPIENTS (Awards Made to Institutions of Higher Learning and Non-
profit Organizations On or After 2/15/96)-
* Are authorized to extend the expiration date of the award one time for up to 12
months without prior approval.
* Must notify the EPA award official in writing with the supporting reasons and
revised expiration date at least 10 days before the expiration date specified in the
award.
* This one-time extension may not be exercised merely for the purpose of using
unobligated balances.
-MEVUNUM DOCUMENTATION REQUIRED FROM RECIPIENT AND/OR
PROJECT OFFICER-
* Recipient request and justification
* Project Officer Decision Memo containing specific recommendation and discussion
of criteria used to develop recommendation
-------
PRUDENT PROJECT OFFICER
CRITERIA FOR RECOMMENDING TIME EXTENSIONS
* Is the extension necessary and reasonable for completion of the project;
i.e., what is the minimum time needed (necessary and reasonable) to
successfully complete the work?
* Has the recipient demonstrated good overall performance of the work?
* Has the recipient demonstrated a good-faith effort to meet project schedules?
* Are there extenuating circumstances outside the recipient's control, for example:
* Adverse weather conditions?
* Unexpected resource constraints, i.e., hiring or equipment freezes?
* Organizational and/or critical personnel changes?
* Third party match difficulties?
* Contracting and/or procurement problems?
* Will the extension best serve the public interest?
-------
WATER QUALITY
GRANTS
Fiscal Management
Florida
NPS Funding & Drawdown by Year
9/30/98
Million Dollars
9/30/99
9/30/03
9/30/99
B Balance ¦ Award
Alabama
NPS Funding & Drawdown by Year
Million Dollars iiyoi/99 n/30/02
B Balance ¦ Award
Georgia
NPS Funding & Drawdown by Year
9/30/01
12/31/98
Million Dollars
9/30/00
H Balance ¦ Award
-------
Kentucky
NPS Funding & Drawdown by Year
5/31/98
9/30/02
Million Dollars
10/31/04
9/30/99
H Balance W Award
North Carolina
NPS Funding & Drawdown by Year
9/30/99
Million Dollars
9/30/00
9/KI/97
H Balance ¦ Award
Mississippi
NPS Funding & Drawdown by Year
Million Dollars 9/30/98 9/30/00
H Balance ¦ Award
South Carolina
NPS Funding & Drawdown by Year
9/30/98 9/30/99
Million Dollars
9/30/98
9/30/98
IS Balance ¦ Award
-------
Tennessee
NPS Funding & Drawdown by Year
12/31/98
Million Dollars
9/30/99
12/31/97
D Balance ¦ Award *
5/07
Section 319 NPS
Close-out Status
Grants with Expired
Budaet Periods
Grant End Date
AL
two
9/30/96(both)
FL
one
9/30/96
GA
one
9/30/94
KY
one
12/31/96
MS
one
3/31/97
NC
two
9/30/95. 3/31/97
SC
two
9/30/96(both)
TN
three
12/31/93. 9/30/94
9/30/95 (
j.* .¦!. r: ixi.mss&i&SK:
Total NPS Funding &
Drawdown by Year
Million Dolt**
90 91 92 . 93 94 95 96
319 Grant Status
FY90- 97
Active Grants
$80.7 Million
Closed-out
$8,7 Million
51 Active Grants & 9 Ctoaed-out
5*7
¦,< i: • :•> • :¦v imi::
-------
WQ Improvement
104(b)(3) Grants
Fundhg h MIBon* of Dollar*
OA 1.7 FL 2-1
Section 104(b)(3)
Close-out Status
Project
Expiration Date
AL
Sludge & Stormwater
9/30/96
AL
Stormwater Nutrient
9/30/96
GA
Enviro Indicator
9/30/96
GA
NPS Health Study
10/31/96
KY
Chenoweth TMDL
9/15/96
SC
Stormwater Permit
9/30/96
TN
4 Projects
12/31/96
.V.K,"V.V. w Ks. . s. ...... ..
-------
TRAINING
Management Concepts Inc.
8230 Leesburg Pike
Suite 800
Vienna, VA 22182
Web Site: http://www.MgmtConcepts.com
Phone: 703-790-9595
Fax: 703-790-1371
Offer courses in Vienna as well as various cities around the
country including Atlanta.
REGULATORY/STATUTORY/GUIDANCE
40 CFR Part 30 - General Regulation for Assistance Program
for Other than State and Local Government
© Pre-award costs
o Automatic time extension for one year
0MB CIRCULAR A-87 - Cost Principles for State, Local and
Indian Tribal Governments
© Pre-award costs
© Expanded
LOBBYING REQUIREMENT - No assistance awards to 501(c)(4)
organizations which lobby. This does not include
contracts awarded using procurement procedures.
EXTENDING GRANT PROJECT/BUDGET PERIODS - Region 4 Policy and
Procedures Memorandum GM0-97-2 delineates current
regulatory allowances and limitations and includes
suggested criteria for use by a "prudent Project Officer"
in determining whether to recommend extensions.
-------
INFORMATION ON PARTICULAR ISSUES
REGULATION
Application of regulations, administrative requirements,
etc. to other agencies or groups under sub awards -Letter
to GA dated April 22, 1997 - 40 CFR Part 30 and 31 and
OMB Circulars.
Land acquisition letter to NC dated March 8, 1996 -
40 CFR 31.31.
Budget changes communication dated September 10, 1993 -
40 CFR31.30(c)(ii).
Program Income communications dated June 13, 1996 and
August 11, 1995 - 40 CFR 31.25.
Demonstration grants communication dated November 22,
1995- 40 CFR Part 40.
Costs incurred prior to award letter to NC dated
February 24, 1995 - 40 CFR 31.23. OMB Circular A-87 now
allows preaward costs; however, they must be identified
and requested in the application.
Small purchase communication dated March 5, 1997.
Indicators of Impropriety in Contracting Fact Sheet.
Third party in-kind services as match - letter to TN
dated - February 1, 1996.
In-kind Contributions Fact Sheet.
COST PRINCIPLES
Purchase/lease of vehicles letters - KY - December 16,
1996.
Teachers and students attending workshops letter to GA -
June 16, 1995 and letter to TN dated March 20, 1996.
Advertising and public relations costs letter to MS dated
April 30, 1996.
-------
U6 THU 08:27 FAA Wt 1828
EPA GRAKTS OPS
©002
^Hi)
6c'> Q&i
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
May 1, 1996
lidance/Procedurej
SUBJECT: Int<
^njc^remman, Cbicv
Policy, Information and Training Branch
Grants Administration Division
TO: GMO
GCRC
On February 15, 1996 the Agency published new regulations (40 CFR Part 30) for grants
with institutions of higher education, hospitals, and other non-profit organizations. These
regulations became effective on March 18, 1996. The new 40 CFR Pan 30 implements the
changes OMB made to A-l 10 and published on November 29,1993.
The Grants Administration Division has convened a workgroup (comprising Headquarters
and Regional personnel) to review the new Part 30 regulations and to develop an Agency
guidance/policy required to implement the regulation. This exercise should be completed by the
end of June 1996.
The workgroup, in the interim, prepared the attached procedures on issues they felt
the grants management offices may get inquiries on and which warranted immediate policy
(i.e., pre-award costs, incremental/supplemental funding actions).
If you have any questions concerning the attached interim procedures or the new Part 3 0,
please contact Maureen Ross on (202) 260-9297.
Attachment
Primed on Recycled Paper
-------
1^004
-2-
HOW DO WE HANDLE QUALITY ASSURANCE ISSUES? (40 CFR 30.54)
The EPA Project Officer is responsible for determining whether the project involves
environmentally related measurements or data generation. In such instances:
1) the recipient must submit a Quality Assurance plan and
2) the program/project officer must address quality assurance in the decision memorandum
and ensure that the recipient develops an acceptable plan.
At the EPA Project Officer's discretion, they can request the GMQ include the following
term and condition to ensure a plan is developed:
"An acceptable Quality Assurance Plan must be submitted within XX days of the
acceptance of this agreement. No work involving environmental measurements or data
generation under this project shall be initiated until the EPA Project Officer has approved
the Quality Assurance Plan "
DO WE NEED A PROCUREMENT SYSTEM CERTIFICATION FORM?
No procurement system certification form (EPA Form 5700-48) will be required for
recipients under the new Part 30. The new regulation addresses the requirements and the
recipient agrees to comply with those requirements when they accept the award.
KEY REMINDERS ABOUT THE NEW PART 30
1. The New Part 30 requires at a minimum ANNUAL performance (progress) reports
submitted to the EPA Project Officer. The GMO should ensure that a term and condition is
added to the award document that requires annual performance/progress reports unless the
program requests them quarterly or semi-annually.
2. Unless it is required by statute, regulation, Executive Order, or official Agency policy, the
new Part 30 does not require cost sharing by the recipient. Therefore, Project Officers should not
require cost sharing.
5/96
-------
uy02/96 THU 08:28 FAX 202 260 1828
EPA GRANTS OPS
1003
INTERIM PROCEDURES FOR PART 30
WHAT RECIPIENTS/ACTIONS ARE SUBJECT TO THE NEW BART 30?
The new Fart 30 regulations published in the Federal Register on February 15, 1996 apply
to all grants and agreements with institutions of higher education, hospitals, and other non-profit
organization.
This new regulation applies to all new awards and supplemental fundings and
amendments that change the original scope of the project signed on or after March IS, 1996\
or that have a start date of March 18,1996, or after.
Supplemental or incremental fundings that simply fund the current scope of work are
subject to the regulation that was in place at the time of initial award (ie., Old Part 30).
HOW DO WE HANDLE PRE-AWARD COSTS? (40 CFR 30.25)
Recipients may be reimbursed for preaward costs they incur 90 calendar days prior to
award provided they include such costs in their application and that the application in its entirety
is approved by EPA. In such instances:
1. Program offices need to address and approve pre-award costs in the decision
memorandum;
2. Budget and Project Period start dates should reflect the. pre-award costs dates (i.e., if
costs start February 1,1996, then the project and budget period dates should begin
February 1,1996, regardless of award date). CAUTION: When approving pre-award
costs make sure the funds being used to support those costs are allowable under
appropriation law. Approving costs for activities which occurred outside of an
appropriation period maybe unallowable (see *),
3. The GeMO has the option of adding a term and condition stating:
"Pre-Award Costs have been approved in accordance with the recipient's application
dated
*The Office of General Counsel and the Grants Policy Branch is currently reviewing
appropriation law to determine what will be allowable when approving pre-award costs. Our
findings will be reflected in the final guidance issued for Part 30.
5/96
-------
PART 30
Thursday
February 15, 1996
SKuC
; Part II
m ~»
«• M
Environmental
Protection Agency
40 CFR Parts 30 and 33
Grants and Agreements With institutions
of Higher Education, Hospitals, and Other
Non-profit Organizations; interim Finai
Rule
-------
» .'1 l"\
6066 Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 30 and 33
[FRL-5409-71
RIN 2030-AA32
Grants and Agreements With
Institutions of Higher Education,
Hospitals, and Other Non-Profit
Organizations
AGENCY: Environmental Protection
Agency.
ACTION: Interim final rule; Request for
comments.
SUMMARY: This interim final rule revises
40 CFR Part 30 and deletes Part 33 to
incorporate the changes established by
revised Office of Management and
Budget (OMB) Circular A.-110,
"Uniform Administratis Requirements
for Grants and Agreements with
Institutions of Higher Education,
Hospitals and Other Non-Profit
Institutions," published by OMB on
November 29,1993 (58 FR 62992).
DATES: This interim final rule is
effective March 18,1996. Written
comments must be submitted on or
before April 15,1996..
ADDRESSES: Written comments should
be sent to: Maureen M. Ross, Grants
Policy and Procedures Branch (3903F)
United States, Environmental Protection
Agency, 401 M Street SW, Washington.
D.C. 20460 (202) 260-9297. Inquiries
may also be submitted via electronic
mail (e-mail) to:
ross.maureen@epamail.epa.gov.
Electronic inquiries must be
submitted as an ASCII file avoiding the
use of special characters and any form
of encryption. Inquiries will also be
accepted on discs in WordPerfect in15.1
file format or ASCII file format. No
Confidential Business Information
should be submitted through e-mail
FOR FURTHER INFORMATION CONTACT:
Maureen M. Ross, Grants Policy and
Procedures Branch (3903F), United
States Environmental Protection
Agency, 401 M Street'SW, Washington,
D.C. 20460, (202) 260-9297..
SUPPLEMENTARY INFORMATION: On
November 29, 1993, OMB issued a
revised Circular A-l 10, entitled
"Uniform Administrative Requirements
for Grants and Agreements With
Institutions of Higher Education.
Hospitals and Other Non-Profit
Organizations." The Circular provides
standards for obtaining consistency and
uniformity among Federal agencies m
the administration of griiii'.s .i:nl
Agreements with institution's n| in^he]
education, hospitals, and other non-
profit organizations.
OMB initially issued Circular A-l 10
in 1976 and, except for a minor revision
in February 1987, the Circular contained
its original provisions until the revised
Circular was published in 1993. To
update the Circular OMB established an
interagency review task force. The task
force solicited suggestions for changes
to the Circular front university groups,
non-profit organizations and other
interested parties and compared, for
consistency, the provisions of similar
provisions applied to State and local
governments. The revised Circular
reflects the results of these efforts.
In addition, OMB published a notice
in the Federal Register (57 FR 39018) on
August 27,1992, requesting comments
on proposed revisions to Circular A-
110. Interested parties were invited to
submit comments. OMB received over
200 comments from Federal agencies,
non-profit organizations, professional
organizations and others. All comments
were considered in developing the final
revision.
OMB directed Federal agencies
responsible for awarding and
administering grants and other
agreements with institutions of higher
learning, hospitals, and other non-profit
organizations to adopt the language as it
appears in the Circular unless different
provisions are required by Federal
statute or are approved by OMB.
This rule does not apply to grants,
contracts, or other agreements between
the Federal Government and units of
State or local governments covered by
OMB Circular A-102, "Grants and
Cooperative Agreements with State and
Local Governments," and EPA's
regulation at 40 CFR Part 31. In
addition, subawards and contracts to
State or local governments are not
covered by this rule. However, the rule
applies to subawards made by State and
local governments to organizations
covered by this rule. The provisions of
the rule may be applied to commercial
organizations, foreign governments,
organizations under the jurisdiction of
foreign governments, and international
organizations.
The Circular inadvertently misstates
the applicability of the statute
commonly known as the Byrd Anti-
Lobbying Amendment, 31 U.S.C. 1352.
The disclosure requirements apply to
organizations which apply or bid for an
award exceeding S100.000, not $100,000
or more. We have made this correction
in Appendix A
The provisions related to lobbying
activities in the former regulation at 40
CXR 30.601 are not being carried
forward in this revision of Part 30.
However, the restrictions in Office of
Management and Budget Circulars A-
and A-l 22 on the use of grant funds h
lobbying remain in effect. The general
restriction in EPA's Appropriation Acts
prohibiting Federal funding of non-
federal parties to intervene in regulatory
or adjudicatory proceedings may also
remain in effect.
Two other changes have been made to
Appendix A because of recent changes
brought about by the Federal
Acquisition Streamlining Act of 1994.
The threshold for the requirement to
include a provision for compliance with
the Copeland "Anti-Kickback Act" (18
U.S.C 874) was raised from 52,000 to
$100,000.
The threshold for the requirement to
include the provision for compliance
with sections 102 and 107 of the
Contract Work Hours and Safety
Standards Act (40 U.S.C. 327-333) was
raised to $100,000.
The Environmental Protection Agency
(EPA) is promulgating the Circular (with
the changes discussed below) as an EPA
regulation at 40 CFR Part 30. This
regulation will supersede the existing
regulations at both 40 CFR Part 30 and
40 CFR Part 33.
This rule adopts all of the OMB
Circular provisions except for the
following EPA-specific changes to the
text:
1. 30.18 Hotel and motel fire safety.
The Hotel and Motel Fire Safety Act of
1990 (P. L. 101-391) requires the
General Services Administration (GSA)
to limit its lodging directories and
lodging expense per diem surveys to
hotels and motels that meet the law's
fire protection and control guidelines.
The Act establishes a number of fire
safety standards which must be met fo:
hotels and motels to be so listed by
GSA. Further, beginning October 1.
1994, Federal funds may not be used tc
sponsor a conference, meeting, or
training seminar held in a hotel or motel
which does not meet these standards.
necessary, the head of the Federal
agencv mav waive this prohibition in
the public interest.
2. 30.54 Quality assurance. A new
section on quality assurance will be
added to ensure that environmentally
related measurements or data generat::r.
by recipients are performed in a mannf:
designed to meet EPA's standards. Th.j
section'will require recipients to
develop procedures and standards to
produce information of high quality ar.c
to minimize the potential for loss of
data
3 Except in the definitions, certain
getenm. ;he Circuk: are bein:
cho:^ '(I. , f nj-¦ 7"^r1 rirttc '.o reflect EP-
tcri,-...vi!ot;v e c iht: term
-------
Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations 6067
"Federal awarding agency" and
"Federal Government" and similar
terms will be changed to "EPA." In
appropriate cases,ue term "Federal
awarding agency"'"has been changed to
"EPA awardofficial." Other minor
eaiung basfceen done as well. None of
the editing of this type alters the
provisions of the Circular.
A. In certain cases the Circular
Includes indefinite language such as
"The Federal government may require."
EPA is changing such wording to "shall
or will" to reflect epa's policies or
procedures; where appropriate.
5. At § 30.23 EPA is adding language
stipulating that EPA will not require
cost sharing or matching unless required
by statute, regulation. Executive Order,
or official Agency policy.
6. At § 30.25(c) the,wording is being
changed to specify the'office/official
[i.e., the responsible technical program
office or the award official) from whom
written approvals are to be obtained.
7. At § 30.25(f)(l)(ii) EPA is changing
the language to provide.that recipients
may incur pre-award costs 90 days
before award and more than 90 days
before award with approval of the award
official.
3. At § 30.27(b) EPA is adding
language limiting the salary rate of
consultants to the maximum daily rate
for level 4 of the Executive Schedule.
This is a requirement of EPA's
Appropriations Act.
9. 30.44 Procurement procedures.
EPA is adding language to ensure that
if the prime contractor awards sub-
contracts, the recipient must ensure that
the prime contractor takes the same five
steps as the recipient is required to late
to utilize small businesses, minority-
owned firms and women's business
enterprises, whenever possible. This
additional language is needed to meet
the requirements of EPA's 1993
Appropriations Act, P.L. 102-389 (42
U.S.C. 4370d). That statute requires EPA
for that fiscal year and for each one
thereafter, to the fullest extent possible,
to ensure at least eight percent of
Federal funding for prime and
subcontracts awarded in support of
authorized programs be made available
to business concerns owned or
controlled by socially and economically
disadvantaged individuals within the
meaning of sections-8(a)(5) and (6) of
the Small Business Act (15 U.S.C.
§§637 (a)(5) and (6)), and includes
women and historically black colleges
and universities.
Public Participation
The policy of the Agency is, whene-.e
practicable, to afford the public an
opportunity to participate in the
rulemaking process. Accordingly,
interested persons may submit written
comments, suggestions, or objections
regarding the interim' final rule to the
location identified in this preamble.
Regulatory Impact Analysis
EPA did not develop a Regulatory
Flexibility Analysis for this interim final
rule. This is because the rule is exempt
from notice and comment rulemaking
under section 553(a)(2) of the
Administrative Procedure "Act, 5 U.S.C.
553(a)(2), and therefore not subject to
the analytical requirements of sections
603 and 604 of the Regulatory
Flexibility Act, 5 U.S.C. 603 and 604.
EPA considers this rulemaking to be
a significant action under section 3(f)(2)
of Executive Order 12866. Therefore die
text was submitted to and reviewed by
the Office of Management and Budget
prior to promulgation.
Paperwork Reduction Act
In keeping with the requirements of
the Paperwork Reduction Act (PRA), as
amended, 44 U.S.C. 3501 et seq, the
information collection requirements
contained in this rule have been
approved by OMB as Standard Forms.
This rule does not contain a collection
of information beyond the already
approved Standard Forms subject to the
PRA.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (the UMRA), P.L.
104-4, establishes requirements for
federal agencies to assess the effects of
their regulatory actions on State, local,
and tribal governments and_the private
sector. Under section 202 of the UMRA,
EPA generally must prepare a written
statement, including a cost-benefit
analysis, for rules with "Federal
mandates" that may result in
expenditures by State, local, ar.d tribal
governments in the aggregate, or to the
private sector, of S100 million in any
one year. Before promulgating an EPA
rule for which a written statement is
needed, section 2G5 of the UMRA
generally requires EPA to identify and
consider a reasonable number of
alternatives, and adopt the least costly,
most cost-effective or least burdensome
alternative that achieves the ob;ectives
of the rule. The provisions of section
205 do not apply when they are
inconsistent with cpplicable tew.
Moreo'.er, section 205 allows EPA to
adopt an alternate? other than "i;e least
costly, most cost-enective or lesst
burdensome alternative if the
Administrator publishes with L~.e final
r rule an explanation -.vhv that alternative
was no; adopted. Before EPA establishes
rcgul;=:::y require:: -Mils that r.:a/
significantly or uniquely affect small
governments, including tribal
governments, it must develop under
section 203 of the UMRA a small
govemment agency plan. The plan must
provide for notifying potentially
affected small governments, giving them
meaningful and timely input in the
development of EPA regulatory
proposals with significant.Federal
intergovernmental mandates, aind
informing, educating, and advising them
on compliance with the regulatory
requirements.
Today's interim final rule contains no
Federal mandates (within the meaning
of the UMRA) for State, local, qi tribal
governments or the private sector. The
UMRA excludes from the definitions of
"Federal intergovernmental mandate"
and "Federal private sector mandate"
duties that arise from conditions of
Federal assistance. This interim final
rule prescribes as conditions of Federal
assistance administrative requirements
governing EPA grants to institutions of
higher education, hospitals, and other
non-profit organizations. Thus, it is not
subject to the requirements of sections
202 and 205 of the UMRA. In addition,
EPA has determined that this interim
final rule contains no regulatory
requirements that might significantly or
uniquely affect small governments.
Accordingly, it is not subject to the
requirements of section 203 of the
UMRA.
List of Subjects in 40 CFR Parts 30 and
33
Environmental protection.
Accounting, Administrative practice
and procedures, grant programs. Grants
programs-environmental protection.
Reporting and recordkeeping
requirements.
Dated: January 11,1996.
Carol Browner,
Administrator.
For the reasons set forth in the
preamble, under the authority of 42
U.S.C. 7 U.S.C. 135 et seq.; 15 U.S.C.
2601 et seq.; 33 U.S.C. 1251 et seq.; 42
U.S.C. 241. 242b, 243, 246, 300J-1, 300j-
2, 300j-3,1857 et seq., 6091 et seq.; and
42 U.S.C. 9601 et seq. 40 CFR part 33
is removed and part 30 is revised as set
forth below:
PART 30—GRANTS AND
AGREEMENTS WITH INSTITUTIONS
OF HIGHER EDUCATION, HOSPITALS,
AND OTHER NON-PRPFIT
ORGANIZATIONS
Subpart A—General
Sec.
30.1 Purpose
30.2 Defmilions
-------
6068 Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations
30.3 Effect on other issuances.
30.4 Deviations.
30.5 Subawairds.'
30.6 Availability of OMB circulars
Subpart B—Pre-Award Requirements
30.10 Purpose.
30.11 Pre-award policies.
30.12 Forms for applying for Federal
assistance.
30.13 Debarment and suspension.
30.14 Special award conditions.
30.15 Metric system of measurement.
30.16 Resource Conservation and Recovery
Act (RCRA).
30.17 Certifications and representations.
30.18 Hotel and motel fire safety.
Subpart C—Post-Award Requirements
Financial and Program Management
30.20 Purpose of financial and program
management
30.21 Standards for financial management
systems.
30.22 Payment
30.23 Cost sharing or matching.
30.24 Program income.
30.25 Revision of budget and program plans.
30.26 Non-Federal audits.
30.27 Allowable costs.
30.28 Period of availability of funds.
Property Standards
30.30 Purpose of property standards.
30.3T Insurance coverage.
30.32 Real property.
30.33 Federally-owned and exempt property.
30.34 Equipment.
30.35 Supplies and other expendable
property.
30.36 Intangible property.
30.37 Property trust relationship.
Procurement Standards
30.40 Purpose of procurement standards.
30.41 Recipient responsibilities.
30.42 Codes of conduct.
30.43 Competition.
30.44 Procurement procedures.
30.45 Cost and price analysis.
30.46 Procurement records.
30.47 Contract administration.
30.48 Contract provisions
Reports and Records
30.50 Purpose of reports and records
30.51 Monitoring and reporting progra
performance.
30.52 Financial reporting.
30.53 Retention and access rcquirenier.-.s for
records.
30.54 Quality assurance
Termination and Enforcement
30.60 Purpose of termination and
enforcement.
30.61 Termination
30.62 Enforcement
30 63 Disputes.
Subpart D—After-the-Award Requirements
30.70 Purpose.
30 71 Closuout proccduics
30 72 Subsequent adjustments and
continuing ruspciiisiiulilio
30.73 Collection of amounts due.
Appendix to part 30—Contract Provisions
Authority; 7 U.S.C 135 et seq.; IS U.S.C
260l"etseq.; 33 U.S.C 1251 et seq.; 42 U.S.C.
241. 242b, 243. 246.300f. 300j-U300b2,
3O0i-3: <2 U.S.C 1857 et seq.; 42 U.S.C 7401
et seq.; 42 U.S.C 6901 et seq.; 42 U.S.C 9601
et seq.
Subpart A—General
§30.1 Purpose.
This subpart establishes uniform
administrative requirements for Federal
grants and agreements awarded to
institutions of higher education,
hospitals, and other non-profit
organizations. The Environmental
Protection Agency (EPA) may not
impose additional or inconsistent
requirements, except as provided in
§§ 30.4, and 30.14 or unless specifically
required by Federal statute or Executive
Order. Non-profit organizations that
implement Federal programs for the
States are also subject to State
requirements.
§30.2 Definitions.
(a) Accrued expenditures means the
charges incurred by the recipient during
a given period requiring the provision of
funds for:
(1) Goods and other tangible property
received;
(2) Services performed by employees,
contractors, sub recipients, and other
payees; and
(3) Other amounts becoming owed
under programs for which no current
services or performance is required.
(b) Accrued income means the sum of:
(1) Earnings during a given period
from;
(1) Services performed by the
recipient; and
(ii) Goods and other tangible property
delivered to purchasers; and
(2) Amounts becoming owed to the
recipient for which no current services
or performance is required by the
recipient.
(c) Acquisition cost of equipment
means the net invoice price of the
equipment, including the cost of
modifications, attachments, accessories,
or auxiliary apparatus necessary to
make the propeny usable for the
purpose for which it was acquired.
Other charges, such as the cost of
installation, transportation, taxes, duty
or protective lrv.ransit insurance, shall
be included o: excluded from the unit
acquisition cost in accordance with the
recipient's regular accounting practices.
(d) Advance -eans a payment made
by Treasury c'r.i :k or other appropriate
pavment mechanism to a recipient upon
its request eu.\T: jefore out!n\ s ;ire
made by the recipient or through the use
of predetermined payment schedules.
le)'Award ruouxis financial assistance
that prbvides supp'ort or stimulation to
accomplish a public, purpose. Awards
include grants and bther agreements in
the form of money or property in lieu
of money, by ,the Federal Government to
ain eligible recipient. The term does not
include: technical assistance, which
provides services instead of money;
other assistance in,the form,of loans,
loan guarantees, interest subsidies, or
insurance; direct payments of any kind
to individuals; and, contracts which are
required to be entered into and
administered under procurement laws
and regulations.
(0 Cash contributions means the
recipient's cash outlay, including the
outlay of money contributed to the
recipient by third parties.
(gj Closeout means the process by
which a Federal awarding agency
determines that all applicable
administrative actions and all required
work of the award have been completed
by. the recipient and Federal awarding
ontract means a procurement
contract under an award or subaward,
and a procurement subcontract under a
recipient's or subrecipient's contract.
(i) Cost sharing or matching means
that portion of project or program costs
not borne by the Federal Government.
(j) Date of completion means the date
on which all work under an award is
completed or the date on the award
document, or any supplement or
amendment thereto, on which Federal
sponsorship ends.
(k) Disallowed costs means those
charges to an award that the Federal
awarding agency determines to be
unallowable, in accordance with the
applicable Federal cost principles or
other terms and conditions contained in
the award.
(1) Equipment means tangible
nonexpendable personal property
including exempt property charged
directly to the award having a useful life
of more than one year and an
acquisition cost of S5000 or more per
unit. However, consistent with recipient
policy, lower limits may be established.
(mj Excess property means property
under the control of any Federal
awarding agency that, as determined by
the head thereof, is no longer required
for its needs or the discharge of its
responsibilities.
(n) Exempt property means tangible
personal property acquired in whole or
in pari with Federal funds, where the
Federal awarding agency has statutory
authority to vest title in the recipient
without further obligation to Fedurf i
-------
Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations
Government. An example of exempt
property authority is contained in the
Federal Grant and Cooperative
Agreement Act (31 U.S.C 6306), for
property acquired under an award to
conduct basic or applied research by a
non-profit institution of higher
education or non-profit organization
whose principal purpose is conducting
scientific research.
(o) Federal awarding agency means
the Federal agency that provides an
award to the recipient.
(p) Federal funds authorized means
the total amount of Federal funds
obligated by the Federal Government for
use by the recipient. This amount may
include any authorized carryover of
unobligated funds from prior funding
periods when permitted by agency
regulations or agency Implementing
instructions.
(q) Federal share of real property,
equipment, or supplies means that
percentage of the property's acquisition
costs and any improvement
expenditures paid with Federal funds.
(r) Funding period means the period
of time when Federal funding is
available for obligation by the recipient.
(s) Intangible property and debt
instruments means, but is not limited to,
trademarks, copyrights, patents and
patent applications and such properly
as loans, notes and other debt
instruments, lease agreements, stock
and other instruments of property
ownership, whether considered tangible
or intangible.
(t) Obligations means the amounts of
orders placed, contracts and grants
awarded, services received and similar
transactions during a given period that
require payment by the recipient during
the same or a future period,
(u) Outlays or expenditures means
charges made to the project or program
They may be reported on a cash or
accrual basis. For reports prepared or. a
cash basis, outlays are the sum of cash
disbursements for direct charges for
goods and services, the amount of
indirect expense charged, the value o:
third party in-kind contributions
applied and the amount of cash
advances and payments made to
subrecipients. For reports prepared on
an accrual basis, outlays are the sum of
cash disbursements for direct charge?
for goods and services, the amount of
indirect expense incurred, the value c.:
in-kind contributions applied and th-i-
net increase (or decrease) in the
amounts owed by the recipient for
goods and other property reces\ed, !c-
services performed bv emp'ovces
contractors, subrecipients and other
and other aiii'M'i).' 1 h ¦-
(iv •• • i 'w|i-r pr'i.j->i;m for ¦¦ ' i .-i:
current services or performance are
required.
(v) Personal property means property
of any kind except real property. It may
be tangible, having physical existence,
or intangible, having no physical
existence, such as copyrights, patents,
or securities.
(w) Prior approval means written
approval by an authorized official
evidencing prior consent
.(x) Program income means gross
income earned by the recipient that is
directly generated by a supported
activity or earned as a result of the
award (see exclusions in § 30.24 (e) and
(h)). Program income includes, but is
not limited to, income from fees for
services performed, the use or rental of
real or personal property acquired under
federally-funded projects, the sale of
commodities or items fabricated under
an award, license fees and royalties on
patents and copyrights, and interest on
loans made with award funds. Interest
earned on advances of Federal funds is
not program income. Except as
otherwise provided in Federal awarding
agency regulations or the terms and
conditions of the award, program
income does not include the receipt of
principal on loans, rebates, credits,
discounts, etc., or interest earned on any
of them.
(y) Project costs means all allowable
costs, as set forth in the applicable
Federal cost principles, incurred by a
recipient and the value of the
contributions made by third parties in
accomplishing the objectives of the
award during the project period.
(z) Project period means the period
established in the award document
during which Federal sponsorship
begins and ends.
(aa) Property means, unless otherwise
stated, real property, equipment,
intangible property and debt
instruments.
(bb) Real property means land,
including land improvements,
structures and appurtenances thereto,
but excludes movable machinery and
equipment
(cc) Recipient means an organization
receiving financial assistance dirc-ctly
from Federal awarding agencies to carry
out a project or program. The term
includes ;:.:blic ar.d private institutions
of higher education, public and private
hospitals, and other quasi-pubkc and
private non-profit orgr.-iizations such as
but not limited to. community action
agencies research institutes,
education;: associations, and i'.i-r."."h
center* T'-.e tern1 -v.'.1. i:ic,Kid<1
com mere. *: organizations, forfei-n or
,1'iiri ' . . or^v. ; '1. ¦>. t>\.. . *.-•
•. I'-- •
are recipients, subrecipients, or
contractors or subcontractors of
recipients or subrecipients at the
discretion of the Federal awarding
agency. The term does not include
government-owned contractor-operated
facilities or research centers providing
continued support for mission-oriented,
large-scale programs that are
§ovemmerit-owned or controlled, or are
lesignated as federally-funded research
and development centers.
(dd) Research and development
means all research activities, both basic
and applied, and all development
activities that are supported at
universities, colleges, and other non-
profit Institutions. "Research" is
defined as a systematic study directed
toward fuller scientific knowledge or
understanding of the subject studied.
"Development" is the systematic use of
knowledge and understanding gained
from research directed toward the
production of useful materials, devices,
systems, or methods, including design
and development of prototypes and
processes. The term research also
includes activities involving the training
of individuals in research techniques
where such activities utilize the same
facilities as other research and
development activities and where such
activities are not included in the
instruction function.
(ee) Small award means a grant or
cooperative agreement not exceeding
the small purchase threshold fixed at 41
U.S.C. 403(11) (currently $100,000).
(ff) Subaward means an award of
financial assistance in the form of
money; or property in lieu of money,
made under an award by a recipient to
an eligible subrecipient or by a
subrecipient to a lower tier subrecipient.
The term includes financial assistance
when provided by any legal agreement,
even if the agreement is called a
contract, but does not include
procurement of goods and services nor
does it include any form of assistance
which is excluded from the definition of
"award" in paragraph (e) of this section.
(gg) Subrecipient means the legal
entity to which a subaward is made and
which is accountable to the recipient for
the use of the funds provided. The term
may include foreign or international
organizations (such as agencies of the
United Nations) at the discretion of the
Federal awarding agency.
(hh) Supplies means all personal
property excluding equipment
intangible property, and debt
instruments as defined in this section,
nnd invention"; of a ron'.rnrtor
conceived or first actually reduced to
practice in the pui'.i-in-.r.ue o! woik
under:1 fi.mil.rv.i" 1 i ' 1
-------
6070 Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations
inventions"), as defined in 37 CFR part
401, "Rights to Inventions Made by
Nonprofit Organizations and Small
Business Firms UnderjGovernment
Grants, Contracts, and Cooperative
Agreements."
(il) Suspension means an action by a
Federal awarding agency that
temporarily withdraws Federal
sponsorship under an award, pending
correctiyB action by the recipient or
pending a decision to terminate the
award by the Federal awarding agency.
Suspension of an award is a separate
action from suspension under Federal
agency regulations implementing
Executive Orders 12549 and 12689.
"Debarment and Suspension."
(jj) Termination means the
cancellation of Federal sponsorship, in
whole or in part, under'an agreement at
any time prior to the date of completion.
(kk) Third party in-kin^ contributions
means the value of non-cash
contributions provided by non-Federal
third parties. Third party in-kind
contributions may be in the form of real
property, equipment, supplies and other
expendable property, and the value of
goods and services directly benefiting
and specifically identifiable to the
project or program.
(U) Unliquidated obligations, for
financial reports prepared on a cash
basis, means the amount of obligations
incurred by the recipient that have not
been paid. For reports prepared on an
accrued expenditure basis, they
represent the amount of obligations
incurred by the recipient for which an
outlay has not been recorded.
(mm) Unobligated balance means the
portion of the hinds authorized by the
Federal awarding agency that has not
been obligated by the recipient and is
determined by deducting the
cumulative obligations from the
cumulative funds authorized.
.(nn) Unrecoveted indirect cost means
the difference between the amount
awarded and the amount which could
have been awarded under the recipient's
approved negotiated indirect cost rate
(oo) Working capital advance means a
procedure where bv funds are advanced
to the recipient to cover its estimated
disbursement needs for a given initial
period.
§ 30.3 Effect on other Issuances.
For awards subject to Circular A-11G.
all administrative requirements of
codified program regulations, program
manuals, handbooks and othsr
nonregulatory materials which are
inconsistent with tlio ro;j;;ir. -i^ists i;i
Circular A-110 shall b
-------
Federal Register / Vol. 61, No. 32 / Thursday. February 15, 1996 / Rules and Regulations 6071
§ 30.14 Special award conditions.
If an applicant or recipient: has a
history of poor performance, is not
financially stable; has a management
system that does not meet the standards
prescribed in Circular A-110; has not
conformed to the terms and conditions
of a previous award; or is not otherwise
responsible, EPA may impose additional
requirements as needed, provided that
such applicant or recipient is notified in
writing as to: the nature of the
additional requirements, the reason why
the additional requirements are being
imposed, the nature of the corrective
action needed, the time allowed for
completing the corrective actions, and
the method for requesting
reconsideration of the additional
requirements imposed. Any special
conditions shall be promptly removed
once the conditions that prompted them
have been corrected.
pursuant to Executive Order 12873
(dated October 20,1993) recipients are
to print documents/reports prepared
under an EPA award of assistance
double sided on recycled paper. This
requirement does not apply to Standard
Forms! These forms are printed on
recycled paper as available through the
General Services Administration.
§ 30.17 Certifications and representations.
Unless prohibited by statute or
codified regulation, EPA will allow
recipients to submit certifications and
representations required by statute,
Executive Order, or regulation on an
annual basis, if the recipients have
ongoing and continuing relationships
with the agency. Annual certifications
and representations shall be signed by
responsible officials with the authority
to ensure recipients' compliance with
the pertinent requirements.
§ 30.15 Metric system of measurement
The Metric Conversion Act, as
amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 2051,
declares that the metric system is the
preferred measurement system for U.S.
trade and commerce. The Act requires
each Federal agency to establish a date
or dates in consultation with the
Secretary of Commerce, when the metric
system of measurement will be used in
the agency's procurements, grants, and
other business-related activities. Metric
implementation may take longer where
the use of the system is initially
impractical or likely to cause significant
inefficiencies in the accomplishment of
federally-funded activities. EPA shall
follow the provisions of Executive Order
12770, "Metric Usage in Federal
Government Programs."
§ 30.16 Resource Conservation and
Recovery Act (RCRA).
Resource Conservation and Recovery
Act (RCRA) (Public Law 94-580
codified at 42 U.S.C. 6962). Under the
Act, any State agency or agency of a
political subdivision of a State which is
using appropriated Federal funds must
comply with Section 6002. Section 6002
requires that preference be given in
procurement programs to the purchase
of specific products containing recycled
materials identified in guidelines
developed by EPA (40 CFR ports 247
'hrough 'J54). Accordingly, State and
lacal institutions of higher education,
l.ospitals, and non-profit organizations
that receive direct Federal awards or
other Federal funds shall give
.preference in tlieir procurement
programs funded with Federal funds lo
the purchase of recycled products
;iiirsuni
-------
6072 Federal Register / Vol. 61, No. 32 / Thursday, February 15. 1996 / Rules and Regulations
holding certificates of authority as
acceptable sureties, as prescribed in 31
CFR part,223, "Surety Companies Doing
Business with the United States.''
any construcuon agreement, or if the accounts for fundsprovided to a
major portion of the construction project recipient or establish any eligibility
ie-Tioonmnllchnd ttimnor. requirements for depositories for funds
§3022 Payment.
(a) Payment-methods shall minimize
the time elapsing between the transfer of
funds from the United States Treasury
and the issuance or redemption of
checks, warrants, or payment by other
means by the recipients. Payment
methods of State agencies or
instrumentalities snail be consistent
with Treasury-State CM1A agreements
or default procedures codified at 31 CFR
part 205.
(b) Recipients are to be paid in
advance, provided they maintain or
demonstrate the willingness to
maintain: written procedures that
minimize the time elapsing between the
transfer of funds and disbursement by
the recipient; and financial management
systems that meet the standards for fund
control and accountability as
established in § 30.21. Cash advances to
a recipient organization shall be limited
to the minimum amounts needed and be
timed to be in accordance with the
actual, immediate cash requirements of
the recipient organization in carrying
out the purpose-of the approved
program or project. The timing and
amount of cash advances shall be as
close as is administratively feasible to
the actual disbursements by the
recipient organization for direct
program or project costs and the
proportionate share of any allowable
indirect costs.
(c) Whenever possible; advances shall
be consolidated to cover anticipated
cash needs for all awards made by the
EPA to the recipient
(1) Advance payment mechanisms
include, but are not limited to, Treasury
check and electronic funds transfer.
(2) Advance payment mechanisms are
subject to 31 CFR part 205.
(3) Recipients shall be authorized to
submit requests for advances and
reimbursements at least monthly when
electronic fund transfers are not used
(d) Requests for Treasury check
advance payment shall be submitted on
SF-270, "Request for Advance or
Reimbursement," or other forms as may
be authorized by OMB. This form is no;
to be used when Treasury check
advance payments are made to the
recipient automatically through the use
of a predetermined payment schedule c:
if precluded by special instructions for
electronic funds transfer.
(e) Reimbursement is the preferred
method when the requirements in
paragraph (b) of this section cannot be
iiii-t El'X'may also use this method or.
is accomplished througu private market
financing or Federal loans.and the(
Federal assistance constitutes a minor
portion of the project
[1) When the reimbursement method.
is used, EPA shall make payment within
30 days after receipt of the billing,
unless the billing is improper.
(2) Recipients shall be,authorized to
submit request lor reimbursement at
least monthly .when electronic funds,
transfers are nor used..
(f) If a recipient cannot meet the
criteria for advance payments and EPA
has determined that reimbursement is
not feasible because the recipient lacks
sufficient working capital, EPA may
provide, cash on a working capital
advance basis. Under this procedure,
EPA shall advance cash to the recipient
to cover its estimated disbursement
needs for an-initial period generally
geared to the awardee's disbursing
cycle. Thereafter, EPA shall reimburse
the recipient for its actual cash
disbursements. The working capital
advance method of payment shall not be
used for recipients unwilling or unable
to provide timely advances to their
subrecipient to meet the subrecipient's
actual cash disbursements.
(g) To the extent available, recipients
shall disburse funds available from
repayments to and interest earned on a
revolving fund, program income,
rebates, refunds, contract settlements,
audit recoveries and interest earned on
such funds before requesting additional
cash payments.
(h) Unless otherwise required by
statute, EPA shall not withhold
payments for proper charges made by
recipients at any time during the project
period unless paragraph (h)(1) or (2) of
this section applies.
(1) A recipient has failed to comply
with the project objectives, the terms
and conditions of the award, or Federal
reporting requirements.
(2) The recipient or subrecipient is
delinquent in a debt to the United States
as defined in OMB Circular A-129.
"Managing Federal Credit Programs.
Under such conditions, EPA may. upon
reasonable notice, inform the recipient
that payments shall not be made for
obligations incurred after a specified
date until the conditions are corrected
or the indebtedness to the Federal
Government is liquidated.
(i) Standards governing the use of
banks and other institutions as
depositories of funds advanced under
awards are as follows.
(1) Except for situations described in
paragraph (i)(2) of this section, EPA
shall not rt:quiru sepemte depositors
provided to a recipient. However,
recipients must be able to account for
the receipt, obligation and expenditure
of funds.
(2) Advances of Federal funds shall be
deposited and maintained in insured
accounts whenever possible.
(j) Consistent witluhe national goal of
expanding the opportunities for women-
owned and minority-owned business
enterprises, recipients shall be
encouraged to use women-owned and
minority-owned banks (a bank which is
owned at least 50 percent by women or
minority jpoup members).
(k) Recipients shall maintain
advances of Federal funds in interest
bearing accounts, unless paragraph (k)
(l), (2) or (3) of this section applies.
(1) The recipient receives less than
$120,000 in Federal awards per vear.
(2) The best reasonably available
interest bearing account would not be
expected to earn interest in excess of
$250 per year on Federal cash balances.
(3) The depository would require an
average or minimum balance so high
that it would not be feasible within the
expected Federal and non-Federal cash
resources.
(1) For those entities where CMIA and
its implementing regulations do not
apply, interest earned on Federal
advances deposited in interest bearing
accounts shall be remitted annually to
Department of Health and Human
Services, Payment Management System,
P.O. Box 6021, Rockville, MD 20852.
Interest amounts up to $250 per year
may be retained by the recipient for
administrative expense. State
universities and hospitals shall comply
with CMIA, as it pertains to interest. If
an entity subject to CMIA uses its own
funds to pay pre-award costs for
discretionary awards without prior
written approval from EPA, it waives its
right to recover the interest under
CMIA. In keeping with Electronic Funds
Transfer rules, (31 CFR Part 206),
interest should be ^emitted to the HHS
Payment Management System through
an electronic medium such as the
FEDWIRE Deposit system. Recipients
which do not have this capability
should use a check.
(m) Except as noted elsewhere in
Circular A-110. only the follow ing
forms shall be authorized for- the
recipients in requesting advances and
reimbursements. EPA shall not require
more than an original and two copies ol
these forms.
(1) SF-270, Request for Adw>>u:e: or
Reimbursement. EPA shall adopt I ie
SF-270 as a staiu:: rri form for
-------
Federal Register / Vol. 61, No. 32 / Thursday, February 15,. 1996 / Rules and Regulations 6073
nonconstruction programs when
electronic funds transfer or
predetermined advance methods are not
used. However, EPA has the option of
using this form for construction
programs in lieuof the SF-271, "Outlay
Report and Request for Reimbursement
for Construction Programs."
(2) SF-271, Outlay Report and
Request for Reimbursement for
Construction Programs. EPA shall adopt
the SF-271 as the standard form to be
used for requesting reimbursement for
construction programs. However, the
SF-270 may be substituted when EPA
determines that it provides adequate
information to meet its needs.
§ 30.23 Cost sharing or matching.
EPA shall not require cost sharing or
matching unless required by statute,
regulation. Executive Order, or official
Agency policy.
(a) All contributions, including cash
and third party in-kind, shall be
accepted as-part of the recipient's cost
sharing or matching when such
contributions meet all of the following
criteria.
(1) Are verifiable from the recipient's
records.
(2) Are not included as contributions
for any other federally-assisted project
or program.
(3) Are necessary and reasonable for
proper and-efficient accomplishment of
project or program objectives.
(4) Are allowable under the applicable
cost principles.
(5) Are not paid by the Federal
Government under another award,
except where authorized by Federal
statute to be used for cost sharing or
matching.
(6) Are identified in the approved
budget.
(7) Conform to other provisions of
Circular A-110, as applicable.
•(b) Unrecovered indirect costs may be
included as part of cost sharing or
matching only with the prior approval
of the EPA Award Official,
i (c) Values for recipient contributions
of services and property shall be
established in accordance with the
applicable cost principles. If, after
consultation with Agency property
management personnel, the EPA Award
Official authorizes recipients to donate
buildings or land for construction or
facilities acquisition projects or long-
term use, the value of the donated
property for cost sharing or matching
shall be the lesser of paragraph (c) (1) or
(2) of this section.
(1) The certified value of the
remaining life of the property recorded
in the recipient's accounting records at
the lime of donation.
(2] The current fair market value.
However, when there is sufficient
justification, the EPA Award Official
may approve the use of the current fair
market value of the donated property,
even if it exceeds the certified value at
the time of donation to the project.
(d) Volunteer services furnished by
professional and technical personnel,
consultants, and other skilled and
unskilled labor may be counted as dost
sharing or matching if the service is an
integral and necessary part of an
approved project or program. Rates for
volunteer services shall be consistent
with those paid for similar work in the
recipient's organization. In those
instances in which the required skills
are not found in the recipient
organization, rates shall be consistent
with those paid for similar work in the
labor market in which the recipient
competes for the kind of services
involved. In either case, paid fringe
benefits that are reasonable, allowable,
and allocable may be included in the
valuation.
(e) When an employer other than the
recipient furnishes the services of an
employee, these services shall be valued
at the employee's regular rate of pay
(plus an amount of fringe benefits that
are reasonable, allowable, and allocable,
but exclusive of overhead costs),
provided these services-are in the same
skill for which the employee is normally
paid.
(f) Donated supplies may include
such items as expendable equipment,
office supplies, laboratory supplies or
workshop and classroom supplies.
Value-assessed to donated-supplies
included in the cost sharing or matching
share shall he reasonable and shall not
exceed the fair market value of the
property at the time of the donation.
(g) The method used for determining
cost sharing or matching for donated
equipment, buildings and land for
which title passes to the recipient may
differ according to the purpose of the
award, if paragraph (g) (1) or (2) of this
section applies.
(1) If the purpose of the award is to
assist the recipient in the acquisition of
equipment, buildings or land, the total
value of the donated property may be
claimed as cost sharing or matching.
(2) If the purpose of the award is to
support activities that require the use of
equipment, buildings or land, normally
only depreciation or use charges for
equipment and buildings may be made.
However, the full value of equipment or
other capital assets and fair rental
charges for land may be allowed,
provided lhat the EPA technical
program office, afier consultation with
EPA property management personnel
has approved the charges.
th) The value of donated property
shall be determined in accordance with
the usual accounting policies of the
recipient, with the following
qualifications.
(1) The value of donated land and
buildings shall not exceed its fair
market value at the time of donation to
the recipient as established by an
independent appraiser (e.g., certified
real property appraiser or General
Services Administration representative)
and certified by a responsible official of
the recipient.
(2). The value of donated equipment
shall not exceed the fair market value of
equipment of the same age and
condition at the time of donation.
(3) The value of donated space shall
not exceed the fair rental value of
comparable space as established by an
independent appraisal of comparable
space and facilities in a privately-owned
building in the same locality.
(4) The value of loaned equipment
shall not exceed its fair rental value.
(5) The following requirements
pertain to the recipient's supporting
records for in-kind contributions from
third parties.
(i) Volunteer services shall be
documented and, to the extent feasible,
supported by the same methods used by
the recipient for its own employees.
(ii) The basis for determining the
valuation for personal service, material,
equipment, buildings and land shall be
documented.
§ 30.24 Program income.
(a) EPA shall apply the standards set
forth in this section in requiring
recipient organizations to account for
program income related to projects
financed in whole or in part with
Federal funds.
(b) Except as provided in paragraph
(h) of this section, program income
earned during the project period shall
be retained by the recipient and, in
accordance with EPA regulations or the
terms and conditions of the award, shall
be used in one or more of the ways
listed in the following.
(1) Added to funds committed to the
project by EPA and recipient and used
to further eligible project or program
objectives.
(2) Used to finance lh* non-Federal
share of the project or program
(3) Deducted from the total project or
program allowable cost ir. determining
the net allowable'costs or. which the
Federal share of costs is oased.
(c) When EPA authorizes the
disposition of program -~ :ome as
described ir. paragraph- _!(t) or (2) ol
-------
6074 Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations
this section, program income in excess
of any limits stipulated shall be used in
accordance Wiufparagraph (b)(3) of this
section.
(d)"In the event that the EPA does not
specify,in iis regulationtf or the terms
and conditions of the. award how
program income is to. I?e .used, paragraph
(b)(3) of this secuon wall apply
automatically'ttffell projects or programs
except researcli. Eorawards that support
research; paragrapn (Bfti) of this section
shalTapply autoinatifcilly unless EPA'
indicates in the terms and conditions
another alternative on me award or the
recipient is subject to special award
conditions, as indicated iii § 30.14.
(e) Unless EPA regulations or the
terms and conditions of th&award
provide otherwise, recipfents shall have
no obligation to the Fedeial Government
regarding program iidcome earned after
the end of the project periqd.
(i) If authorized by EPA regulations or
the terms and conditions of the award,
costs incident to the generation of
program income may be deducted from
gross income to determine program
income, provided these costs have not
been charged to the award.
(g) Proceeds from the sale of property
stall be handled .in accordance with the
requirements of the Property Standards
(See §§ 30.30 through 30.37).
(h) Unless EPA regulations or the
terms and condition of the award
provide otherwise, recipients shall have
no obligation to the Federal Government
with respect to program income earned
from license fees and royalties for
copyrighted material, patents, patent
applications, trademarks, and
inventions produced under an award.
However! Patent and Trademark
Amendments (35 U:S.C 18) apply to
inventions made under an experimental,
developmental, or research award.
§ 30.25 Revision of budget and program
plans.
(a) The budget'plan is the financial
expression of the project or program as
approved during the award process. The
budget shall include both the Federal
and non-Federal share. It shall be
related to performance for program
evaluation purposes whenever
appropriate.
i(b).Recipients are required to report
deviations from budget and program
plans, and request prior approvals for
budget and program plan revisions, in
accordance with this section.
(c) For nonconstruction awards,
unless EPA regulations provide
otherwise, recipients shall request prior
written approvals from:
(1) The EPA Award Official for the
following:
(1) Change in the scope or the
objective of the project or program (even
if there is no associated budget revision
requiring prior written approval).
ui) The need for additional Federal
funding.
fiiil The,inclusion of costs that require
prior approvaljn accordance with OMB
Circular A-2i;'"Cost Principles for
Institutions of Higher Education," OMB
Circular A-122, "Cost Principles for
Nonprofit Organizations;" or .45 CFR
part 74 Appendix E, "Prlndples for
Determining Costs Applicable to
Research' and Development under
Grants and Contracts with Hospitals," or
48 CFR part 31, "Contract Cost
Principles and Procedures," as
applicable.
(2) The technical program office for
the following:
(i) Change in a key person specified
in the application or award document.
(ii) The absence for more than three
months, or a 25 percent reduction in
time devoted to the project, by the
approved project director or principal
investigator.
(iii) The transfer of amounts Jaudgeted
for indirect costs to absorb increases in
direct costs, or vice versa.
(iv) The transfer of funds allotted for
training allowances (direct payment to
trainees) to other categories of expense.
(v) Unless described in the
application and funded in the approved
awardj the subaward, transfer or
contracting out of any work under an
award. This provision does not apply to
the purchase of supplies, material,
equipment or general support services.
(dj No other prior approval
requirements for specific items may be
imposed unless a deviation has been
approved by OMB..
4e) Except for requirements listed in
paragraphs (c)(l)[i) and (ii) of this
section, the EPA Award Official may
waive cost-related and administrative
prior written approvals required by this
part and OMB cost principles. For
awards that support research, these
prior approval requirements are
automatically waived unless:
(1) EPA provides otherwise in the
award or agency regulation or
(2) One of the conditions in paragraph
(fl(2)(i) of this section applies.
(^Recipients are authorized without
prior approval or a waiver to:
$0Incur pre-award costs 90 calendar
days prior to award.
(i) Pre-award costs incurred more thafi
90 calendar days prior to award require
the prior approval of the EPA Award
Official.
(ii) The applicant must include all
pre-award costs in its application.
(iii) The applicant incurs such costs at
its own risk (i.e., EPA is under no
obligation to reimburse such costs if for
any reason the recipient does not
receive an award or if the award is less
than anticipated and inadequate to
cover such costs).
(iv) EPA will only allow pre-award
costs without approval if there are
sufficient programmatic reasons for
incurring the expenditures prior to the
award (e.g., time constraints, weather
factors, etc.), they are in conformance
with the appropriate cost principles,
and any procurement complies with the
requirements of this rule.
(2) Extend the expiration date of the
award one time for up to 12 months.
(i) A one-time extension may not be
initiated if:
(A) Hie terms and conditions of the
award prohibit the extension;
(B)The extension requires additional
Federal funds; or
(C) The extension involves any
change in the approved objectives or
scope of the project.
(ii) For one-time extensions, the
recipient must notify the EPA Award
Official in writing with the supporting
reasons and revised expiration date at
least 10 days before the expiration date
specified in the award.
(iii) This one-time extension may not
be exercised merely for the purpose of
using unobligated balances.
(3) Carry forward unobligated
balances to subsequent funding periods
providing the recipient notifies the EPA
Award Official by means of the
Financial Status Report.
(g) The EPA technical program office
may, at its option, restrict the transfer of
funds among direct cost categories or
programs, functions and activities for
awards in which the Federal share of
the project exceeds 5100,000 and the
cumulative amount of such transfers
exceeds or is expected to exceed 10
percent of the total budget as last
approved by EPA. Except as provided
for at paragraph (c) of this section, for
awards in which the Federal share is
less than S100.000 there are no
restrictions on transfers of funds among
direct cost categories. EPA shall not
permit a transfer that would cause any
Federal appropriation or part thereof to
be used for purposes other than those
consistent with the original intent of the
appropriation.
(h)All other changes to
nonconstruction budgets, except for the
changes described in paragraph (j) of
this section, do not require prior
approval.
Ii) For construction awards, recipients
shall request prior written approval
promptly from EPA for budget revisions
whenever paragraph (h)(1), (2) or (3) of
this section applies
-------
Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations
(1) The revision results from changes
in the scope or the objective of the
project or program.
(2) The need arises for additional
Federal funds to complete the project.
(3) A revision is desired which
involves specific costs for which prior
written approval requirements may be
imposed consistent with applicable
OMB cost principles listed in § 30.27."
(j) No other prior approval
requirements for specific items may be
imposed unless a deviation has been
approved by OMB.
(k) When EPA makes an award that
provides support for both construction
and nonconstruction work, EPA may
require the recipient to inquest prior
approval before making any fund or
budget transfers between the two types
of work supported.
(1) For both construction and
nonconstruction award% EPA shall
require recipients to notify the agency in
writing promptly whenever the amount
of Federal authorized funds is expected
to exceed the needs of the recipient for
the project period by more than $5000
or five percent of the Federal award,
whichever is greater. This notification
shall not be required if an application
for additional funding is "submitted for
a continuation award.
(m) When requesting approval for
budget revisions, recipients shall use
the budget forms that were used in the
application unless the EPA indicates
that a letter clearly describing the
details of the request will suffice.
(n) Within 30 calendar days from the
date of receipt of the request for budget
revisions, EPA shall-review the request
and notify the recipient whether the
budget revisions have been approved. If
the revision is still under consideration
at the end of 30 calendar days, EPA
shall inform the recipient in v/riting of
the date when the recipient may expect
the decision.
be subject to the audit requirements of
EPA.
{d) Commercial organizations shall be
subject to the audit requirements of EPA
or the prime recipient as incorporated
into the award document
§30.26 Non-Federal audits.
(a) Recipients and subrecipients that
are institutions of higher education or
other non-profit organizations shall be
subject to the audit requirements
contained in OMB Circular A-133,
"Audits of Institutions of Higher
Education and Other Non-Profit
Institutions."
(b) State and local governments shall
be subject to the audit requirements
contained in the Single Audit Act (31
U.S.C. 7501-7) and 40 CFR part 31
implementing OMB Circular A-128.
"Audits of State and Local
Governments."
(c) Hospitals not covered by the audit
provisions of OMB Circular A-133
§30.27 Allowable costs.
(a) For each kind of recipient, there is
a set of Federal principles for
determining allowable costs.
Allowability of costs shall be
determined in accordance with the cost
principles applicable to the entity
incurring the costs. Thus, allowability of
costs incurred by State, local or
federally-recognized Indian tribal
governments is determined in
accordance with the provisions of OMB
Circular A-87,"Cost Principles for State
and Local Governments." The
allowability of costs incurred by non-
profit organizations is determined in
accordance with the provisions of OMB
Circular A-122, "Cost Principles for
Non-Profit Organizations." The
allowability of costs incurred by
institutions of higher education is
determined in accordance with the
provisions of OMB Circular A-21, "Cost
Principles for Educational Institutions."
The allowability of costs incurred by
hospitals-is determined in accordance
with the provisions of Appendix E of 45
CFR part 74, "Principles for
Determining Costs Applicable to
Research and Development Under
Grants and Contracts with Hospitals."
The allowability of costs incurred by
commercial organizations and those
non-profit organizations listed in
Attachment C to Circular A-122 is
determined in accordance with the
provisions of the Federal Acquisition
Regulation (FAR) at 48 CFR part 31. In
addition, EPA's annual Appropriations
Acts may .contain restrictions on the use
of assistance funds. For example, the
Acts may prohibit the use of hinds to
support intervention in Federal
regulatory or adjudicatory proceedings.
lb) EPA will limit its participation in
the salary rate (excluding overhead)
paid to individual consultants retained
by recipients or by a recipient's
contractors or subcontractors to the
maximum daily rale for level 4 of the
Executive Schedule unless a greater
amount is authorized by law.
(Recipient's may. hovvever, pay
consultants more than this amount.)
This limitation applies to consultation
services of designated individuals with
specialized skills who are paid at a daily
or hourly rate. This rate does not
include transportation and subsistence
costs for travel performed; recipients
will pay these in accordance with their
normal travel reimbursement practices.
Contracts with firms for services which
are awarded using the procurement
requirements in this part are not
affected by this limitation.
< § 30.28 Period of availability of funds.
Where a funding period is specified,
a recipient may charge to the grant only
allowable costs resulting from
obligations incurred during the funding
period and any pre-award costs
authorized by EPA.
Property Standards
§30.30 Purpose of property standards.
Sections 30.31 through 30.37 set forth
uniform standards governing
management and disposition of property
furnished by the Federal Government
whose cost was charged to a project
supported by a Federal award. EPA
shall require recipients to observe these
standards under awards and shall not
impose additional requirements, unless
specifically required by Federal statute.
The recipient may use its own property
management standards and procedures
provided it observes the provisions of
§§30.31 through 30.37.
§30.31 . Insurance coverage.
Recipients shall, at a minimum,
provide the equivalent insurance
coverage for real property and
equipment acquired with Federal funds
as provided to property owned by the
recipient. Federally-owned property
need not be insured unless required by
the terms and conditions of the award.
§30.32 Real property.
EPA shall prescribe requirements for
recipients concerning the use and
disposition of real property acquired in
whole or in part under awards. Unless.
otherwise provided by statute, such
requirements, at a minimum, shall
contain the following.
(a) Title to real property shall vest in
the recipient subject to the condition
that the recipient shall use the real
property for the authorized purpose of
the project as long as it is needed and
shall not encumber the property without
approval of EPA.
(b) The recipient shall obtain written
approval by EPA for the use of real
property in other federally-sponsored
projects when the recipient determines
that the property is no longer needed for
the purpose of the original project. Use
in other projects shall be limited to
those under federally-sponsored
projects (i.e., awards) or programs that
have purposes consistent with those
authorized for support by EPA.
(c) When the real property is no
longer needed ns provided in
paragraphs (n) and (!>) of this section.
-------
6076 Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations
the recipient shall request disposition
instructions tfrom^JPA oi'lts successor
Federal, a warding*Rencv EPA shall
observe one or more oflthe following
dispositionlnstril'ctions.
(1) The recipientjnay b§Lpejmitted to
retain title withouLfiirthekobligation to
the Federal Government, after it
compensates .the aieaeral Government
for.thai percentage.OLtbe .current fair
markKttiie"piODerty attributable
to the Federal parudpation in ,me
project.
(2) The recipient may.be directed to
sell the property under guidelines
provided by EPA and pay the Federal
Government for that percentage of the
current fair market value of the property
attributable to the Federal participation
in the project (after deducting actual
and reasonable selling and fix-up
expenses, if any; from the sales
proceeds). When the recipient is
authorized or required to selrthe
property, proper sales procedures shall
be established that provide for
competition to the extent practicable
and result in the highest possible return.
(3) The recipient may be directed to
transfer title to the property to the
Federal Government or to an eligible
third party provided that, in such cases,
the recipient shall be entitled to
compensation for its attributable
percentage of the current fair market
value of the property.
§30.33 Federally-owned and exempt
property.
(a) Federally-owned property. (1) Title
to federally-owned property remains
vested in the Federal Government.
Recipients shall submit annually an
inventory listing of federally-owned
property in their custody to EPA's
property management staff. Upon
completion of the award or when the
property is no longer needed, the
recipient shall report the property to
EPA's property management staff for
further utilization.
(2) If EPA has no further need for the
property, it shall be declared excess anc
reported to the General Services
Administration, unless EPA has
statutory authority to dispose of the
property by alternative methods (e.g.,
the authority provided by the Federal
Technology Transfer Act (15 U.S.C.
3710 (I)) to donate research equipment
to educational and non-profit
organizations in accordance with
Executive Order 12821, "Improving
Mathematics and Science Education in
Support of the National Education
Goals.") Appropriate instructions shall
be issued to the recipient bv EPA's
property managi-munl stall
(b) Exempt property. When statutory
authority exists, EPA has the option to
yesUitle to property acquired with
Federal funds in the recipient without
further obligation to the Federal
Govemment and under conditions EPA
considers appropriate. Such property is
"exempt property." Should EPA not
establish conditions, title to exempt
property upon acquisition shall vest in
the recipient without further obligation
tn tHn'Pederal Government
§30.34 Eauioment
(a).Tide to equipment acquired by a
recipient with Federal funds shall vest
in the recipient, subject to conditions of
this section.
:(b) The recipient shall not use
equipment acquired with Federal funds
to provide services to non-Federal
outside organizations for a fee that is
less than private companies charge for
equivalent services, unless specifically
authorized by Federal statute, for as
long as the Federal Government retains
an interest in the equipment.
(c) The recipient shall use the
equipment in the project or program for
which it was acquired as long as
needed, whether or not the project or
program continues to be supported by
Federal funds and shall not encumber
the property without approval of EPA.
When no longer needed for the original
project or program, the recipient shall
use the equipment in connection with
its other federally-sponsored activities,
in the following order of priority:
Activities sponsored by EPA, then
activities sponsored hy other Federal
awarding agencies.
(d) During the time that equipment is
used on the project or program for
which it was acquired, the recipient
shall make it available for use on other
projects or programs if such other use
will not interfere with the work on the
project or program for which the
equipment was originally acquired. First
preference for such other use shall be
given to other projects or programs
sponsored by EPA; second preference
shall be given to projects or programs
sponsored by other Federal awarding
agencies. If the equipment is owned by
the Federal Government, use on other
activities not sponsored by the Federal
Government shall be permissible
authorized by EPA. User charges shall
be treated as program income.
(e) When acquiring replacement
equipment, the recipient may use '.he
equipment to be replaced as trade-in or
sell the equipment and use the proceeds
to offset the costs of '.r.? replacen-.^:-;
equipment subject to -.he aporova'. of
EPA.
(fKThe recipient's property
management standards for eauioment
acquired with Federaltunds and
federally-owned equipment shall
include all of the following.
(1) Equipment records shall be
maintained accurately and shall include
the following information.
(i) A description of the equipment.
(ii).Manufacturer^ serial number,
modeljiumber, Federal stock number,
national stock number, or other
identification number.
(iii) Source of the equipment,
including the award number.
(iv) Whether title vests in the
recipient or the Federal Government.
(v) Acquisition date (or date received,
if the equipment was furnished by the
Federal Government) and cost.
(vi) Information from which one can
calculate the percentage of Federal
participation in the cost of the
equipment (not applicable to equipment
furnished by the Federal Government].
(vii) Location and condition of the
equipment and the date the information
was reported.
(viii) Unit acquisition cost.
(ix) Ultimate disposition data,
including date of disposal and sales
price or the method used to determine
current fair market value where a
recipient compensates EPA for its share.
(2) Equipment owned by the Federal
Government shall be identified to
indicate Federal ownership.
(3) A physical inventory of equipment
shall be taken and the results reconciled
with the equipment records at least once
every two years. Any differences
between quantities determined by the
physical inspection and those shown in
the accounting records shall be
investigated to determine the causes of
the difference. The recipient shall, in
connection with the inventory, verify
the existence, current utilization, and
continued need for the equipment.
(4) A control system shall be in effect
to insure adequate safeguards to prevent
Ipss, damage, or theft of the equipment.
Any loss, damage, or theft of equipment
shall be investigated and fully
documented; if the equipment was
owned by the Federal Government, the
recipient shall promptly notify EPA.
(5).Adequate maintenance procedures
shall be implemented to keep the
equipment in good condition.
(6) Where.the recipient is authorized
or required to sell the equipment,
proper sales procedures shall be
established which provide for
co:npetition to the extent practicable
and result in the highest possible return.
,;>) When thr recipient no longer
needs the. eqripment, the equipment
iv.:v he used other activities in
-------
Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations 6077
accordance with the following
standards. For equipment with a current
per unit fair market value of S5000 or
more, theTedpient may retain the
equipment for other uses provided that
compensation is made to the original
Federal awarding agency 01 its
successor. The amount of compensation
shall be computed by applying the
percentage of Federal participation in
the cost of the original project or
program to the current fair market value
of the equipment If the recipient has no
need for the equipment, the recipient
shall request disposition instructions
from EPA. EPA snail determine whether
the equipment can be used to meet the
agency's requirements. If no
requirement exists within that agency,.
the availability of the equipment shall
be reported to the General Services
Administration by EPA to determine
whether a requirement for the
equipment exists in otBer Federal
agencies. EPA shall issue instructions to
the recipient no later than 120 calendar
days after the recipient's request and the
following procedures shall govern.
(1) If so instructed or if disposition
instructions are not issued within 120
calendar days after the recipient's
request, the recipient shall sell the
equipment and reimburse EPA an
amount computed by applying to the
sales proceeds the percentage of Federal
participation in the cost of the original
project or program. However, the
recipient shall be permitted to deduct
and retain from the Federal share $500
or ten percent of the proceeds,
whichever is less, for the recipient's
selling and handling expenses.
(2) If the recipient is instructed to
ship the equipment elsewhere, the
recipient shall be reimbursed by the
Federal Government by an amount
which is computed by applying the
percentage of the recipient's
participation in the cost of the original
project or program to the current fair
market value of the equipment, plus any
reasonable shipping or interim storage
costs incurred.
(3) If the recipient is instructed to
otherwise dispose of the equipment, the
recipient shall be reimbursed by EPA for
such costs incurred in its disposition.
(4) EPA may reserve the right to
transfer the title to the Federal
Government or to a third party named
by the Federal Government when such
third party is otherwise eligible under
existing statutes. Such transfer shall be
subject to the following standards.
(i) The equipment shall be
appropriately identified in the award or
otherwise made known to the recipient
in writing.
(ii) EPA shall issue disposition
instructions within 120 calendar days
after receipt of a final inventory. The
final inventory shall list all equipment
acquired with grant funds and federally-
owned equipment If EPA fails to issue
disposition instructions within the 120
calendar day period, the recipient shall
apply the standards of this section, ad
appropriate.
(iii) When EPA exercises its right to
take title, the equipment shall be subject
to the provisions for federally-owned
equipment.
§ 30.35 Supplies and other expendable
property.
(a) Title to supplies and other
expendable property shall vest in the
recipient upon acquisition. If there is a
residual inventory of unused supplies
exceeding $5000 in total aggregate value
upon termination or completion of the
project or program and the supplies are
not needed for any other federally-
sponsored project or program, the
recipient shall retain the supplies for
use on non-Federal sponsored activities
or sell them, but shall, in either case,
compensate the Federal Government for
its share. The amount of compensation
shall be computed in the same manner
as for equipment.
(b) The recipient shall not use
supplies acquired with Federal funds to
provide services to non-Federal outside
organizations for a fee that is less than
private companies charge for equivalent
services, unless specifically authorized
by Federal statute as long as the Federal
Government retains an interest in the
supplies.
§30.36 Intangible property.
(a) The recipient may copyright any
work that is subject to copyright and
was developed, or for which ownership
was purchased, under an award. EPA
reserves a royaltyfree, nonexclusive
and irrevocable right to reproduce,
publish, or otherwise use the work for
Federal purposes, and to authorize
others to do so.
(b) Recipients are subject to
applicable regulations governing patents
and inventions, including government-
wide regulations issued by the
Department of Commerce at 37 CFR part
401, "Rights to Inventions Made by
Nonprofit Organizations and Small
Business Firms Under Government
Grants, Contracts and Cooperative
Agreements."
(c) Unless waived by EPA, the Federal
Government has the right to paragraphs
!c) (1) and (2) of this section.
(1) Obtain, reproduce, publish or
otherwise use the data first produced
'..nder an award.
(2) Authorize others to receive,
reproduce, publish, or oUierwise use
such data for Federal purposes.
(d) Title to intangible property and
debt instruments acquired under an
award or subaward vests upon
acquisition in ihe.recipient. The
recipient shall use that property for the
originally-authorized purpose, and the
recipient shall not encumber the
property without approval of EPA.
When no longer needed for the
originally authorized purpose,
disposition of the intangible property
shall occur in accordance with the
provisions of § 30.34(g).
§30l37 property trust relationship.
Real property, equipment, intangible
property and debt instruments that are
acquired or improved with Federal
funds shall be held in trust by the
recipient as trustee for the beneficiaries
of the project or program under which
the property was acquired or improved.
Agencies may require recipients to
record liens or other appropriate notices
of record to indicate that personal or
real property has been acquired or
improved with Federal funds and that
use and disposition conditions apply to
the property.
Procurement Standards
5 30.40 Purpose of procurement
standards.
Sections 30.41 through 30.48 set forth
standards for use by recipients in
establishing procedures for the
procurement of supplies and other
expendable property, equipment, real
property and other services with Federal
funds. These standards are furnished to
ensure that such materials and services
are obtained in an effective manner and
in compliance with the provisions of
applicable Federal statutes and
Executive Orders. No additional
procurement standards or requirements
shall be imposed by EPA upon
recipients, unless specifically required
by Federal statute or Executive Order or
approved by OMB.
§ 30.41 Recipient responsibilities.
The standards contained in this part
do not relieve the recipient of the
contractual responsibilities arising
under its contract(s). The recipient is
the responsible authority, without
recourse to EPA, regarding the
settlement and satisfaction of all
contractual and administrative issues
arising out of procurements entered into
in support of an award or other
agreement. This includes disputes,
claims, protests of award, source
evaluation or other matters of a
contractual nature Matters concerning
-------
6078 Federal Register / Vol..61, No.- 32 I Thursday; February 15, 1996 / Rules and Regulations
violation nf statute are to be referred tc
suHf Federal. State or local authority as
may havftoroDeriiurisdiction.
§30.42 Codes olcotlduct.
The recipient shall maintain written
stanaaras oi conduct governing tiie
perftirmancs outs employees engaged
in the award and admlnistration of
contracts..No .employee, officer, or agent
snail paru croate m.uie selection, award,
or administraU0Dot a.contract,
supported dv Federal funds if a real oi
apparent conflict of interest would be
involved. Such, fl.conflict would arise
when the employee, officer, or agent,
any member of his or her immediate
family, his^or her-partner, or an
organization.whiph employs or is about
to employ any of the parties indicated
herein, has a financial or other interest
in the firm selected for fib award. The
officers, employees,-and agents of the
recipient shall neither solicit nor accept
gratuities, favors, or anything of
monetary value from contractors, or
parties to subagreemeiits. However,
recipients may set standards for
situations in which the financial interest
is not substantial or the gift is an
unsolicited item of nominal value. The
standards of conduct shall provide for
disciplinary actions to be applied for
violations of such standards by officers,
employees, or agents of the recipient.
§30.43 Competition.
All procurement transactions shall be
conducted in a manner to provide, to
the maximum extent practical, open and
free competition. The recipient shall be
alert to organizational conflicts of
interest as well as noncompetitive
practices among contractors that may
restrict or eliminate competition or
otherwise restrain trade. In order to
ensure objective contractor performance
and eliminate unfair competitive
advantage, contractors that develop or
draft specifications, requirements,
statements of work, invitations for bids
and/or requests for proposals shall be
excluded from competing for such
procurements. Awards shall be made lo
the bidder or offeror whose bid or offer
is responsive to the solicitation and is
most advantageous to the recipient,
price, quality and other factors
considered. Solicitations shall clearly
set forth all requirements that the bidder
or offeror shall fulfill in order for the bid
or offer to be evaluated by the recipient.
Any and all bids or offers may be
rejected when it is in the recipient's
interest to do so.
¦§50.44 Procurement procedures.
(a) All recipients shall establish
written procurement procedures. TIil^"
procedures shall provide for, at a
minimum;'tnat paragraDhs (a) (1),,(2)
and (3)fcf fHiS eectioireppiy.
(1) Recipients avpld .purchasing!
unnecessary items.
(2) When? appropriate, an analysis is
made of lease and'burqpBsti alternatives
to determine, whicn Would be the most
economical and practical procurement
for the Federal Government.
(3) Soucitauons tor goods and
services provide for all of the following.
[iV A clear^na accurate description of
the technical requirements lor the.
material, product or service' to be
procured. In competitive procurements,
such a description shall not contain
features which undulv restrict
competition.
(ii) Requirements which the bidder/
offeror must fulfill and alLother factors -
to be used in evaluating bids or
proposals.
(iii) A description, whenever
practicable, of technical requirements in
terms of functions to be performed or
performance required, including the
range of acceptable characteristics or
minimum acceptable standards.
(iv) The specific features of "brand
name or equal" descriptions that
bidders are required to meet when such
items are included in the solicitation.
(v) The acceptance, to the extent
practicable and economically feasible,
of products and services dimensioned in
the metric system of measurement.
(vi) Preference, to the extent
practicable and economically feasible,
for products and services that conserve
natural resources and protect the
environment and are energy efficient.
(b) Positive efforts shall be made by
recipients to utilize small businesses,
minority-owned firms, and women's
business enterprises, whenever possible.
Recipients of Federal awards shall take
all of the following steps to further this
goal.
(1) Ensure that small businesses,
minority-owned firms, and women's
business enterprises are used to the
fullest extent practicable.
(2) Make information on forthcoming
opportunities available and arrange time
frames for purchases and contracts to
encourage and facilitate participation by
small businesses, minority-owned firms,
and women's business enterprises.
(3) Consider in the contract.process
whether firms competing for larger
contracts intend to subcontract with
small businesses, minority-owned firms,
and women's business enterprises.
(4) Encourage contracting with
consortiums of small businesses
minority-owned firms and women's
busmen-, L'[iU:rpnsr~ when a coiumu m
to'oiarge for one of thesefirms to hand'
individually.
{5) Use thB services and assistance,
appropriate, of such organizations as the
Small Business Administration and the
Department of Commerce's Minority
Business Development Agency in the
solicitation and utilization of small
business es.minority-owned firtos and
women's business enterprises.
(6) If the prime contractor awards
subcontracts, requiring the contractor to
taxe steps in paragraphs (b)(1) through
(S) of this section.
(c) ThB type of procuring instruments
used (e.g., fixed price contracts, cost
reimbursable contracts, purchase orders,
and incentive contracts) shall be
determined by the recipient but shall be
appropriate for the particular
procurement and for promoting the best
interest of the program or project
involved. The "cost-plus-a-percentage-
of-cost" or "percentage of construction
cost" methods of.contracting shall not
be used.
(d).Contracts shall be made only with
responsible contractors who possess the
potential ability to perform successfully
under the terms and conditions of the
proposed procurement. Consideration
shall be given to such matters as
contractor integrity, record of past
performance, financial and technical
resources or accessibility to other
necessary resources. In certain
circumstances, contracts with certain
parties are restricted by agencies'
implementation of Executive Orders
12549 and 12689, "Debarment and
Suspension."
(e) Recipients shall, on request, make
available for EPA, pre-award review and
procurement documents, such as
request for proposals or invitations for
bids, independent cost estimates, etc.,
when any of the following conditions
apply.
(1) A recipient's procurement
procedures or operation fails to comply
with the procurement standards in
EPA's implementation of Circular A-
110.
(2) The procurement is expected to
exceed the small purchase threshold
fixed at 41 U.S.C. 403 (11) (currently
5100,000) and is to be awarded without
competition or only one bid or offer is
received in response to a solicitation.
(3) The procurement, which is
expected to exceed the small purchase
threshold, specifies a "brand name"
product.
(4) The proposed award over the
small purchase threshold is to be
awarded to other than the apparent low
bidder under a sealed bid procurement
(5) A proposed contract modification
changes the scope of a contract or
-------
Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations 60-
increases the contract amount by more
than the amount of the small purchase
threshold.
§30.45 Cost and price analysis.
Some form of cost or price analysis
shall be made and documented in the
procurement files in connection with
every procurement action. Price analysis
may be accomplished in various ways,
including the comparison of price
quotations submitted, market prices and
similar indicia, together with discounts.
Cost analysis is the review and
evaluation of each element of cost to
determine reasonableness, allocability
and allowability.
§30.46 Procurement records.
Procurement records and files for
purchases in excess of the small
purchase threshold shall include the
following at a minimum: Basis for
contractor selection; justification for
lack of competition when competitive
bids or offers are not obtained; and basis
for award cost or price.
§30.47 Contract administration.
A system for contract administration
shall be maintained to ensure contractor
conformance with the terms, conditions
and specifications of the contract and to
ensure adequate and timely follow up of
all purchases. Recipients shall evaluate
contractor performance and document,
as appropriate, whether contractors
have met the terms, conditions and
specifications of the contract
§ 30.48 Contract provisions.
The recipient shall include, in
addition to provisions to define a sound
and complete agreement; the following
provisions in all contracts. The
following provisions shall also be
applied to subcontracts.
fa) Contracts in excess of the small
purchase threshold shall contain
contractual provisions or conditions
that allow for administrative,
Dntractual, or legal remedies in
istances in which a contractor violates
r breaches the contract terms', and
rovide for such remedial actions as
lay be appropriate.
(b) Ail contracts in excess of the snail
urchase threshold shall contain
uitable provisions for termination by
tie recipient, including the manner by
v'hich termination shall be effected end
he basis for settlement. In addition,
uch contracts shall describe conditions
inder which the contract may be
errninated for default as well as
:onditions where the contract may be
errninated because of circumstance;
leyond the control of the contractor
(c) Except as otherwise required b\
;t<-jtute, an award thai requires the
contracting (or subcontracting) for
construction or facility improvements
shall provide for the recipient to follow
its own requirements relating to bid
guarantees, performance bonds, and
payment bonds unless the construction
contract or subcontract exceeds
S100.000. For those contracts or
subcontracts exceeding $100,000, EPA
may accept the bonding policy and
requirements of the recipient, provided
EPA has made a determination that the
Federal Government's interest is
adequately protected. If such a
determination has not been made, the
minimum requirements shall be as
follows.
(1) A bid guarantee from each bidder
equivalent to five percent of the bid
price. The "bid guarantee" shall consist
of a firm commitment such as a bid
bond, certified check, or other
negotiable instrument accompanying a
bid as assurance that the bidder shall,
upon acceptance of his bid; execute
such contractual documents as may be
required within the time specified.
(2) A performance bond on the part of
the contractor for 100 percent of the
contract price. A "performance bond" is
one executed in connection with a
contract to secure fulfillment of all the
contractor's obligations under such
contract.
(3) A payment bond on the part of the
contractor for 100 percent of the
contract price. A "payment bond" is one
executed in connection with a contract
to assure payment as required by statute
of all persons supplying labor and
material in the execution of the work
provided for in the contract.
(4) Where bonds are required in the
situations described herein, the bonds
shall be obtained from companies
holding certificates of authority as
acceptable sureties pursuant to 31 CFR
part 223. "Surety Companies Doing
Business with the United States."
(d) All negotiated contracts [except
those for less than the small purchase
threshold] awarded by recipients shall
include a provision to the effect that the
recipient, EPA, the Comptroller General
of the United States, or any of their duly
authorized representatives, shall have
access to any books, documents, papers
and records of the contractor which are
directly pertinent to a specific program
for the purpose of making audits,
examinations, excerpts and
transcriptions.
{e) All contracts, including small
purchases, awarded by recipients and
their contractors shall contain the
procurement provisions of the
Appendix to Circular A-110. as
applicable. Repar.>i iwn 1 ill
-------
6080 Federal Register / Vol. 61, No 3'/ ¦/ Thursday, February 15, 1996 I Rules ana Regulations
the action taken or contemplated, and.
any.assistance needed to resolve the
situation
(gJ.EPA.may make site visits, as
needed.
(h) EPA stialLcomply witn clearance
requirements of 5 CFR pait l320rwhen
requesting performance data from
recipients.
§30.52 Financial reporting:
a) The following forms or such other
forms, as may.'be approved by OMB are
authorized.for obtaining financial
information from recipients.
iJ.)SF-269 or SF*-269A, Financial
Status Report (i) EPA shall require
recipients to use the SF-269 or SF-
269A to report the status otfunds for all
nonconstruction projects'or programs.
However, EPA has the option of not
requiring the SF—269 or SF—269A when
the SF-270, Request for Advance or
Reimbursement, or SF-272, Report of
Federal Cash Jransactionst is
determined to provide adequate
information to meet its needs, except
that a final SF-269 or SF-269A shall be
required at the completion of the project
when the SF-270 is used only for
advances.
til) EPA shall prescribe whether tha
report shall be on a cash or accrual
basis. If EPA requires accrual
information and the recipient's
accounting records are not normally
kept on the accrual basis, the recipient
shall not be required to convert its
accounting system, but shall develop
such accrual information through best
estimates based on an analysis of the
documentation on hand.
(iii) EPA shall determine the
frequency of the Financial Status Report
for each project or program, considering
the size and complexity of the particular
project or program. However, the report
shall not be required more frequently
than quarterly or less frequently than
annually. A final report shall be
required at the completion of the
agreement.
(iv) EPA shall require recipients to
submit the SF-269 or SF-269A (an
original and no more than two copies)
no later than 30 days after the end of
each specified reporting period for
quarterly and semi-annual reports, and
90 calendar days for annual and final
reports. Extensions of reporting due
dates may be approved by EPA upon
request of the recipient.
12) SF-272, Report of Federal Cash
Transactions, (i) When funds are
advanced to recipients EPA shall
require each recipient to submit the SF-
272 and, when necessary, its
continuation sheet, SF-272A. EPA shall
u^e this report to inoniior cash
ady&nppditq rppipientsandrto obtain
disDursemenninformauon for each
agreement wirnine recipients.
(i$|EPA may rieoulre forecasts of
Federal casU.requirements .in the
Remarks section of the report.
({flj Whefa oracucal and'deemed
necessary,' £PA may require recipients
iu rcuurc in me Kemarks"'section the
amouiiLpf casnatlvancesreceived in
excess of three aavs. Recinients shall
proviae snort nanauvei explanations of
actions'taKen-to-reduce ihe:excess
balances.
(ivj Recipients ishall be required to
subiMt not more than the\ original and
two copies of the SF-272.15 calendar
days following the end of »ach quarter.
EPAmay- reqiiire a monthly report from
those recipients receiving advances
totaling $1 million or more per year.
(v) EPA may waive the requirement
for submission of the SF-272 for any
one of the following reasons:
(A) When monthly advances do not
exceed $25,000 per recipient, provided
that such advances are monitored
through other forms contained in this
section;
(B) If, in EPA's opinion, the
recipient's accounting controls are
adequate to minimize excessive Federal
advances; or
(C) When the electronic payment
mechanisms provide adequate data.
(b) When EPA needs additional
information or more frequent reports,
the following shall be observed.
(1) When additional information is
needed to comply with legislative
requirements, EPA shall issue
instructions to require recipients to
submit such information under the
"Remarks" section of the reports.
(2) When EPA determines that a
recipient's accounting system does not
meet the standards in §30.21, additional
pertinent information to further monitor
awards may be obtained upon written
notice to the recipient until such time
as the system is brought up to standard.
EPA, in obtaining this information, shall
comply with report clearance
requirements of 5 CFR part 1320.
(3) EPA may shade out any line item
on any report if not necessary.
(4) EPA may accept the identical
information from the recipients in
machine readable format or computer
printouts or electronic outputs in lieu of
prescribed formats.
(5) EPA may provide computer or
electronic outputs to recipients when
such expedites or contributes to :he
accuracy of reporting.
§ 30.53 Retention and access
requirements for records.
(a) This section sets forth
requirements for r«vord retentu:'. >.:ul
access to ecordsfor awards to
recipients. EPA shall not impose any
other record retention or access
requirements upon recipients.
lb) Financial records, supporting
documents, statistical rernrds, and all
other records pemnent to an award
shall be Tetained for a period of three
years, from the date of submission of the
final expenditure report or. for awards
that are renewed quarterly or annually,
from the oate oi the submission of the.
quarterly or annual unancial report, as
authorized by EPA. The only exceptions
are the following.
(1) If any litigation, claim, or audit is
started before the expiration of the 3-
year period, tie records shall be
retained until all litigation, claims or
audit findings involving the records
have been resolved and final action
taken.
(2) Records for real property and
equipment acquired with Federal funds
shall be retained for 3 years after final
disposition.
(3) When records are transferred to or
maintained by EPA, the 3-year retention
requirement is not applicable to the
recipient.
(4) Indirect cost rate proposals, cost
allocations plans, etc. as specified in
paragraph (g) of this section.
(c) Copies of original records may be
substituted for the original records if
authorized by EPA.
(d) EPA shall request transfer of
certain records to its custody from
recipients when it determines that the
records possess long term retention
value. However, in order to avoid
duplicate recordkeeping, EPA may make
arrangements for recipients to retain any
records that are continuously needed for
joint use.
(e) EPA, the Inspector General,
Comptroller General of the United
States, or any of their duly authorized
representatives, have the right of timely
and unrestricted access to any books,
documents, papers, or other records of
recipients that are pertinent to the
awards, in order to make audits,
examinations, excerpts, transcripts and
copies of such documents. This right
also includes timely and reasonable
access to a recipient's personnel for the
purpose of interview and discussion
related to such documents. The rights of
access in this paragraph ore not limited
to the required retention period, but
shall last as long as records are retained.
(f) Unless required by statute, EPA
shall not place restrictions on recipients
that limit public access to the records of
recipients that are pertinent to an
award, except when it can be
demonstrated that such records shall be
kept confidential :ind would been
-------
Federal Register / Vol. 61, No. 32 / Thursday, February 15, 1996 / Rules and Regulations 6081
exempted from disclosure pursuant to
the Freedom of Information Act (5
U.S.C. 552) ifthe records had belonged
to EPA.
(g) Indirect cost rate proposals, cost
allocations plans, etc. Paragraphs (g)(1)
and (g)(2) of this section apply to the
following types of documents, and their
supporting records: indirect cost rate
computations or proposals, cost
allocation plans, and any similar
accounting computations of the rate at
which a particular group of costs is
chargeable (such as computer usage
chargeback rates or composite hinge
benefit rates).
(1) If submitted for negotiation. If the
recipient submits to EPA.,or the
.subrecipient submits to tfie recipient the
proposal, plan, or oth^r computation to
form the basis for negotiation of the rate,
then the 3-year retention period for its
supporting records startsion the date of
such submission.
(2) If not submitted for negotiation. If
the recipient is not required to submit
to EPA or the subrecipient is not
required to submit to the recipient the
proposal, plan, or other computation for
negotiation .purposes, then the 3-yeaT
retention period for the proposal, plan,
or other computation and its supporting
records starts at the end of the fiscal
year (or other accounting period)
covered by the proposal, plan, or other
computation.
§30.54 Quality assurance.
If the project officer determines that
the grantee's project involves
environmentally related measurements
or data generation, the grantee shall
develop and implement quality
assurance practices consisting of
policies, procedures, specifications,
standards, and documentation sufficient
to produce data of quality adequate to
meet project objectives and to minimize
loss of data due to out-of-control
conditions or malfunctions. The quality
system must comply with the
requirements of ANSI/ASQC E4,
"Specifications and Guidelines for
Quality Systems for Environmental Data
Collection and Environmental
Technology Programs", which may be
obtained from the National Technical
Information Service (NT1S), 5885 Por:
Royal Road, Springfield, VA 22161
Termination and Enforcement
§30.60 Purpose of termination and
enforcement.
Sections 30.61 and 30 62 set forth
¦uniform suspension, termination and
enforcement procedures
§30.61 Termination.
(a) Awards may be terminated in
whole or in part only if paragraph (a)(1),
(2) or (3) of this section applies.
(1) By EPA, if a recipient materially
fails to comply with the terms and
conditions of an award..
(2) By EPA with the consent of the
recipient, in which case the two parties
shall agree upon the termination
conditions, including the effective date
and. in the case of partial termination,
the portion to be terminated.
(3) By the recipient upon sending to
EPA written notification setting forth
the reasons for such termination,'the
effective date, and, in the case of partial
termination, the portion-to be
terminated. However, if EPA determines
in the case of partial termination that
the reduced or modified portion of the
grant will not accomplish the purposes
for which the grant was made, it may
terminate the grant in its entirety under
either paragraph (a)(1) or (2) of this
secion.
(b) If costs are allowed under an
award, the responsibilities of the
recipient referred to in § 30.71(a),
including those for property
management as applicable, shall be
considered in the termination of the
award, and provision shall be made for
continuing responsibilities of the
recipient after termination, as
appropriate.
§ 30.62 Enforcement.
(a) Remedies for noncompliance. If a
recipient materially fails to comply with
the terms and conditions of an award,
whether stated in a Federal statute,
regulation, assurance, application, or
notice of award, EPA may, in addition
to imposing any of the special
conditions outlined in § 30.14, take one
or more of the following actions, as
appropriate in the circumstances.
(1) Temporarily withhold cash
payments pending correction of the
deficiency by the recipient or more
severe enforcement action by EPA.
(2) Disallow (that is, deny both use of
funds and any applicable matching
credit for) all or part of the cost of the
activity or action not in compliance.
(3) Wholly or partly suspend or
terminate the current award.
(4) Withhold further awards for the
project or program.
(5) Take other remedies that may be
legally available.
[b) Hearings ond appeals. In taking an
enforcement action. EPA shall provide
the recipient an opportunity for hearing,
appeal, or other administrative
proceeding to which the recipient is
entitled under anv statute or regulation
applic;;ie to the a; '..on involved CPA's
Dispute Provisions found at 40 CFR part
31, subpart F, Disputes, are applicable
to assistance awarded under the
provisions of this Part.
(c) Effects of suspension and
termination. Costs of a recipient
resulting from obligations incurred by
the recipient during a suspension or
after termination of an award are not
allowable unless EPA expressly
authorizes them in the notice of
suspension or termination or
subsequently. Other recipient costs
during suspension or after termination
which are necessary and not reasonably
avoidable are allowable if paragraphs
(c)(1) and (2) of this section apply.
(1) The costs result from obligations
which were properly incurred by the
recipient before the effective date of
suspension or termination, are not in
anticipation of it, and in the case of a
termination, are noncancellable.
(2) The costs would be allowable if
the award were not suspended or
expired normally at the end of the
funding period in which the termination
takes effect.
(d) Relationship to debarment and
suspension. The enforcement remedies
identified in this section, including
suspension and termination, do not
preclude a recipient from being subject
to debarment and suspension under
Executive Orders 12549 and 12689 and
EPA's implementing regulations (see
§30.13).
§ 30.63 Disputes.
(a) Disagreements should be resolved
at the lowest possible level.
(b) If an agreement cannot be reached,
the EPA disputes decision official will
provide a written final decision. The
EPA disputes decision official is the
individual designated by the award
official to resolve disputes concerning
assistance agreements. If the dispute
cannot be resolved the procedures
outlined at 40 CFR part 31, subpart F,
should be followed
Subpart D—After-the-Award
Requirements
§30.70 Purpose.
Sections 30.71 through 30.73 contain
closeout procedures and other
procedures for subsequent
disallowances and adjustments
§30.71 Closeout procedures.
(a) Recipients shall submit, within 90
calendar days after the date of
completion of the award, all financial,
performance, and other reports as
required by the terms sr.d rondit::".s of
the award EPA may ? jnrove p\'?-«ion«
when requested bv iht "•.v.tpietu
-------
6082 Federal Register / Vol. 61, No. 32 / Thursday, February 15 1996 / Rules„and Regulations
(b) Unless EPA'auth'orizes an
extension, a reciDieni shall liquidate all
obligations incurred unaer tne award
not later than AO.uiiendar days after the
funding period or the dafo.of
completion as specitied in the terms.ana
conditions of the awara or in agency
implementing instructions,
fc) EPA shaUmake.prompt payments
to a recipient for allowable reirabursabl
costs under the award being closed outl
(d) The redpieatsaall promptly
refund any paiances pi unopugatedcasl
that EPA has advancea.or.patd and that
is not authorized to be retained by the
recipient for use in otner projects. OMB
Circular A-129 governs jinretumed
amounts that become delinquent debts.
(e) When authorized by the terms and
conditions of the award, EI*A shall make
a settlement for any upward or
downward adjustments to the Federal
share of costs after closeout reoorts are
received.
(f) The recipient shall account for any
real and personal property acquired
with Federal funds or received from the
Federal Government in accordance with
§§ 30.31 through 30.37.
(g) In the event a final audit has not
been performed prior to the closeout of
an award, EPA shall retain the right to
recover disappropriate amount after
fully considering the recommendations
on disallowed costs resulting from the
final audit.
§ 30.72 Subsequent adjustments and
continuing responsibilities.
(a) The closeout of an award does not
affect any of the following.
(1) The right of EPA to disallow costs
and recover funds on the basis of a later
audit or other review.
(2) The obligation of the recipient to
return any funds due as a result of later
refunds, corrections, or other
transactions.
(3) Audit requirements in §30.26.
(4) Property management
requirements in §§30.31 through 30.37.
(5) Records retention as required in
§30.53.
(b) After closeout of an award, a
relationship created under an award
may be modified or ended in whole or
in part with the consent of EPA and the
recipient, provided the responsibilities
of the recipient referred to in § 30.73(a),
including those for property
management as applicable, are
considered and provisions made for
continuing responsibilities of the
recipient, as appropriate.
§ 30.73 Collection of amounts due.
»- (a) Any funds paid to a recipient in
excess of the amount to whicli the
recipient is finally determined to he
entitled under the terms and conditions
of the award constitute a debt to the
Federal Government If not paid within^
areasonable period a fterthe'demand for
payment,'EPA may reduce'the debt by
paragraph (a) (1), (2) or (3) of this
section.
(1) Making an administrative offset
against other requests for
reimbursements.
(2) Withholding advance payments
otherwise due to the recipient
(3) Taking other action permitted by
statute.
(b) Except as otherwise provided by
law, EPA shall charge interest on an
overdue debt in accordance with 4 CFR
Chapter 0. "Federal Claims Collection
Standards."
Appendix to Part 30—Contract
Provisions
All contracts awarded by a recipient,
including small purchases, shall contain the
following provisions as applicable:
1. Equal Employment Opportunity—All
contracts shall contain a provision requiring
compliance with Executive Order 11246,
"Equal Employment Opportunity," as
amended by Executive Order 11375,
"Amending Executive Order 11246 Relating
to Equal Employment Opportunity," and as
supplemented by regulations at 41 CFR part
60, "Office of Federal Contract Compliance
Programs, Equal Employment Opportunity,
Department of Labor."
2. Copeland "Anti-Kickback" Act (18
U.S.C. 874 and 40 U.S.C 276c)—All
contracts and subgrants in excess of S100.000
for construction or repair awarded by
recipients and subrecipients shall include a
provision for compliance with the Copeland
"Anti-Kickback" Act (18 U.S.C. 874), as
supplemented by Department of Labor
regulations (29 CFR part 3, "Contractors and
Subcontractors on Public Building or Public
Work Financed in Whole or in Part by Loans
or Grants from the United States"). The Act
provides that each contractor or subrecipient
shall be prohibited from inducing, by any
means, any person employed in the
construction, completion, or repair of public
work, to give up any part of the
compensation to which he is otherwise
entitled. The recipient shall report all
suspected or reported violations to EPA.
3. Davis-Bacon Act. as amended (40 U.S.C
276a to a—7)—When required by Federal
program legislation, all construction
contracts awarded b\ the recipients and
subrecipients of more than S2000 shall
include a provision for compliance with the
Davis-Bacon Act (40 U.S.C 276a to a—7) and
as supplemented by Department of Labor
regulations (29 CFR part 5, "Labor Standards
Provisions Applicable toConUacts Go\erning
Federally Tinanced and Assisted'
Construction"). Under this Act. conUactors
shall be required to pay wages to laborers and
mechanics at a rale not less than the
minimum uages.specified in a wage
determination made bv the Secrctarv of
Labor. In audition. coiurjclurs; shoi, be
reqinri'il !o n.iv. uvu-'1- not loss' th?.- n:v.f ,i
week. The'recipient shall place a rnpy Qf
curreni'prevaiiipg wage aeiermmation is.
bVvthe. Deoanment.of.Labor in.each
soncitauon'ano'uie awara oi a contract shall
be:condltioned upon the acceptance of the
wage.detennination.tXhe recipient shall
reponall suspected or reported violations to
epa:
~Sri tfact Work Hours and Safety
$tenrifirfl«'AcT(36U^S.fc.'327-333)—where
applicaDie.all contracts awarded by
fgqlplentsin'excesstif S1&0.0OQ for
Cfli^truGdoncpniractstand In excess of S2S00
.iur_wiu)w,vunuBGtS)that involve-the
empioymeiii.jMmecuamcs or laborers shall
Include a provision for compliance with
secuqns 102 and 107 ot the Contract Work
Hours ahd'Safety Standards Act (40 U.S.C
327-33}), as supplemented by Department of
Labor regulations.(29 CFR part 5). Under
sectioned:; of the Act, each contractor'shall
be required to compute the wages of every
mechanic ana laoorer on the basis of a
standard work week of 40 hours. Work in
excess ic\. a member of
Congress, officer or rmplovon of Congress, or
an oinplov ee ol a member ol Congress in
mnniv-tiir' v.:!h ' ' MM .1,1'. l^'iii'Ml
-------
Federal Register / Vol 61. No. 32 / Thursday, February 15, 1996 / Rules and Regulations 6083
contract, grant or any other award covered by
31 U.S.C. 1352. Each tier shall also disclose
any lobbying with non-Federal funds that
takes place in connection with obtaining any
Federal award. Such disclosures are
forwarded from tier to tier up to the
recipient.
8. Debarment and Suspension (Executive
Orders 12549 and 12689)—No contract shall
be made to parties listed on the General
Services Administration's List of Parties
Excluded from Federal Procurement or
Nonprocuremeut Programs in accordance
with Executive Orders 12549 and 12689,
"Debarment and Suspension." This list
contains the names of parties debarred,
suspended, or otherwise excluded by
agencies, and contractors declared ineligible
under statutory or regulatory authority other
than Executive Order 12549. Contractors
with awards that exceed the small purchase
threshold shall provide the Required
certification regarding its exclusion status
and that of its principal employees.
IFR Doc. 96-2502 Filed 2-14-96; 8:45 ami
BILLING CODE 6560-M-P
-------
X
ul
c
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 4
ATLANTA FEDERAL CENTER •
100 ALABAMA STREET. S.W.
ATLANTA, GEORGIA 30303-3104
4PM-GPB
AM# 18
MEMORANDUM
SUBJECT: Extending Grant Projeqt/Budget Periods
Policy and Procedures Memor.
FROM: Matthew J. Robbins, Chief /[/
Grants and Procurement Section
TO
Grant Project Officers
Region 4
The attached Fact Sheet has been developed by our Grants
Management Office in response to concerns expressed by Region 4's
Senior Resource Officer, Mike Peyton, regarding the extension of
grant Project/budget periods. The Fact Sheet is intended for
Project Officer use in determining under what circumstances grant
extensions may justifiably be authorized and the minimum
documentation required to support the reasonableness of the
extensions.
The Fact Sheet delineates current regulatory allowances and
limitations and includes suggested criteria for use by a "prudent
Project Officer" in determining whether to recommend extensions.
I urge you to make full use of the Fact Sheet in preparing your
future recommendations for grant time extensions.
Questions about extending grant project/budget periods
should be addressed to the appropriate grant specialist. For
questions directly related to the Fact Sheet itself, contact
Linda Mobley at Ext. 28414.
Attachment
cc: Division Directors
Office Directors
Branch Chiefs
Section Chiefs
Recycled/Rocyclabla «Printed with Vegetable Oil Based Inks on 100% Recycled Paper (40% Postconsumer)
-------
PRUDENT PROJECT OFFICER
CRITERIA FOR RECOMMENDING TIME EXTENSIONS
* Is the extension necessary and reasonable for completion of the project;
i.e., what is the minimum time needed (necessary and reasonable) to
successfully complete the work?
* Has the recipient demonstrated good overall performance of the work?
* Has the recipient demonstrated a good-faith effort to meet project schedules?
* Are there extenuating circumstances outside the recipient's control, for example:
* Adverse weather conditions?
* Unexpected resource constraints, i.e., hiring or equipment freezes?
* Organizational and/or critical personnel changes?
* Third party match difficulties?
* Contracting and/or procurement problems?
* Will the extension best serve the public interest?
-------
FACT SHEET
EXTENDING GRANT PROJECT/BUDGET PERIODS
—PART 31 (State, Local and Tribal Governments) AND OLD PART 30 RECIPIENTS
(Awards Made to Institutions of Higher Learning and Non-profit Organizations
Prior to 2/15/96)-
* Must obtain prior approval from the award official whenever there is a need to
extend the period of availability of funds.
—NEW PART 30 RECIPIENTS (Awards Made to Institutions of Higher Learning and Non-
profit Organizations On or After 2/15/96)-
* Are authorized to extend the expiration date of the award one time for up to 12
months without prior approval.
* Must notify the EPA award official in writing with the supporting reasons and
revised expiration date at least 10 days before the expiration date specified in the
award.
* This one-time extension may not be exercised merely for the purpose of using
unobligated balances.
—MEVflNUM DOCUMENTATION REQUIRED FROM RECIPIENT AND/OR
PROJECT OFFICER-
* Recipient request and justification
* Project Officer Decision Memo containing specific recommendation and discussion
of criteria used to develop recommendation
-------
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON.' D.G. 20503
THE DIRECTOR
May 4, 1995
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
FROM: Alice M. Rivlin^f^
Director W
Circular NoJ-A-87§c
Reused ^ ?"
>• * *—
SUBJECT: Cost Principles for State, Local, and Indian Tribal
Governments
1. Purpose. This Circular establishes principles and standards
for' determining costs for Federal awards carried out through
grants, cost reimbursement contracts, and other agreements with
State and local governments and federally-recognized Indian
tribal governments (governmental units).
2. Authority. This Circular is issued under the authority of
the Budget and Accounting Act of 1921, as amended; the Budget and
Accounting Procedures Act of 1950, as amended; the Chief
Financial Officers Act of 1990; Reorganization Plan No. 2 of
1970; and Executive Order No. 11541 ("Prescribing the Duties of
the Office of Management and Budget and the Domestic Policy
Council in the Executive Office of the President").
3. Background. An interagency task force was established in
1987 to review existing cost principles for. Federal awards to
State, local, and Indian tribal governments. The task force
studied Inspector General reports and recommendations, solicited
suggestions for changes to the Circular from governmental units,
and compared for consistency the provisions of other OMB cost
principles circulars covering.non-profit organizations and
universities. A proposed revised Circu]ar reflecting the results
of those efforts was issued on October 12, 1988, and August 19,
1993. Extensive comments on the proposed revisions, discussions
with interest groups, and related developments were considered in
developing this revision.
4. Rescissions. This Circular rescinds and supersedes Circular
A-87, issued January 15; 1981.
5. Policy. This Circular establishes principles and standards
to provide, a uniform approach for determining costs and to
•proiSSte effective program delivery, efficiency, and better
relationships between governmental units and the Federal
Government. The principles are for determining allowable costs
only. They are not intended to identify the circumstances or to
dictate the extent of Federal and governmental unit participation
-------
in the financing of a particular Federal award. Provision for
profit or other increment above cost is outside the scope of this
Circular.
6. Definitions. Definitions of key terms used in this Circular
are contained in Attachment A, Section B*
7. Required Action. Agencies responsible for -admiinistering
t-hat involve cost reimbursement contracts,, grants, and
other agreements.with governmental units shall issue codified
regulations to implement the provisions of this Circular and its
Attachments by September 1, 1995.
6. OMB Responsibilities. The Office of Management and Budget
(OMB) will review agency regulations and implementation of this
Circular, and will provide policy interpretations and assistance
to insure effective and efficient implementation. Any exceptions
will be subject to approval bv OMB. Exceptions, will only be made
in particular cases where adequate justification is presented.
9. Information Contact. Further information concerning this
Circular may be obtained by contacting the Office of Federal
Financial Management, Financial Standards and Reporting Branch,
Office of Management and Budget, Washington, DC 20503, telephone
202-395-3993.
10. Policy Review Date. OMB Circular A-87 will have a policy
review three years from the date of issuance.
11. Effective Date. This Circular is effective as follows:
For costs charged indirectly or otherwise covered by
the cost allocation plans described in Attachments C, D
•and E, this revision shall be applied to cost
-allocation plans and indirect cost proposals submitted
or prepared for a governmental unit's fiscal year that
begins on or after September 1, 1995.
For Owher i this revision shall be applied to all
awards or amendments, including continuation or renewal
awards, made on or after September 1, 1995.
Attachments
-------
OMB CIRCULAR NO. A-87
•COST PRINCIPLES FOR
STATE, LOCAL AND INDLAN TRIBAL GOVERNMENTS
TABLE OF CONTENTS
Attachment A - General Principles for Determining Allowable Costs
Attachment B - Selected Items of Cost
Attachment C - State/Local-Wide Central-Service Cost Allocation
Plans
Attachment D - Public Assistance Cost Allocation Plans
Attachment E-- State and Local Indirect Cost Rate Proposals
-------
Circular No. A-87
Attachment A
GENERAL PRINCIPLES FOR DETERMINING
ALLOWABLE COSTS
TABLE OF CONTENTS
A. Purpose and Scope
1. Objectives
2. Policy guides
3. Application
B. Definitions
1. Approval or authorization of the awarding or cognizant
Federal agency
2. Award
3. Awarding agency
4. Cefttral service cost - allocation plan
5. Claim
6. Cognizant agency
7. Common rule
8. Contract
9. Cost
10. Cost allocation plan
11. Cost objective
12. Federally-recognized Indian tribal government
13. Governmental unit
14. Grantee department or agency
15. Indirect cost rate proposal
.16. Local government
17. Public assistance cost allocation plan
18. State
C. Basic Guidelines
1. Factors affecting allowability of costs
2. Reasonable costs
3. Allocable costs
4. Applicable credits
D Composition of Cost
1. Total cost
2. Classification of costs
E. Direct Costs
1. General
2- Applitation*-
3. Minor items
F. Indirect Costs
1. General
-------
2. Cost allocation plans and indirect cost proposals
3! Limitation on indirect or administrative costs
G. interagency services
H. Required Certifications
A. Purpose and scope
1. Objectives, mis Attachment establishes principles for
determining the allowable costs incurred by State, local, and
federally-recognized Indian tribal governments (governmental
units) under grants, cost reimbursement contracts, and other
agreements with the Federal Government {collectively referred to
in this Circular as "Federal awards"). The principles are for
the purpose of cost determination and are not intended to
identify the circumstances or dictate the extent of Federal or
governmental unit participation In the financing of a particular
program or project. The principles are designed to provide that
Federal awards bear their fair share of cost recognized under
these principles except where restricted or prohibited by law.
Provision for profit or other increment above cost is outside the
scope of this Circular.
2. Policy guides.
a. The application of these principles is based on the
fundamental premises that:
1. Governmental units are responsible for the
efficient and effective administration of Federal awards through
the application of sound management practices.
2. Governmental units assume responsibility for
administering Federal funds in a manner consistent with
underlying agreements, program objectives, and the terms and
conditions of the Federal award.
3. Each governmental unit, in recognition of its own
¦unique combination of staff, facilities, and experience, will
have the primary responsibility for employing whatever form of
organization and management techniques may be necessary to assure
proper and efficient administration of Federal awards.
b. Federal agencies should work with States or localities
which wish to test alternative mechanisms for paying costs for
administering Federal programs.. The Office of Management and
Budget (OMB) encourages Federal agencies to test fee-for-service
alternjitive-s as a repl^^ment f>or current cost-reimbursement
payment methods in response to the National Performance Review's
(NPR) recommendation. The NPR recommended the fee-for-service
approach to reduce'the burden associated with maintaining systems
2
-------
for charging administrative costs to Federal programs, and
preparing and approving cost allocation plans. This approach
should also increase incentives for administrative efficiencies
and improve outcomes.
3. Application.
a; These principles will be applied by all Federal
agencies in determining costs incurred by governmental units
under Federal awards (including subawards) except those with (1)
publicly.-financed educational institutions subject to OMB
Circular A-21, "Cost Principles for Educational Institutions,B
and (?) programs administered by publicly-owned hospitals and
other providers of medical care that ate subject to requirements
promulgated by the sponsoring' Federal agencies. However, this
Circular does apply to all central service and department/agency
costs that are allocated or billed to those educational
institutions, hospitals, and other providers of medical care or
services, by other State and local government departments and
agencies.
b. All subawaras are subject to those Federal cost
principles applicable to the particular organization concerned.
Thus, if a subaward is to a governmental unit (other than a
college, university or hospital), this Circular shall apply; if a
subaward is to a commercial organization, the cost principles
applicable to commercial organizations shall apply; if a subaward
is to a college or university, Circular A-21 shall apply; if a
subaward is to a hospital, the cost principles used by the
Federal awarding agency for awards to hospitals shall apply,
subject to the provisions of subsection A.3.a, of this
Attachment; if a sUbaward is to some other non-profit
organization, Circular A-122, "Cost Principles for Non-Profit
Organizations," shall apply.
c. These principles shall be used as a guide in the
pricing of fixed price arrangements where costs are used in
determining the appropriate price.
d. Where a Federal contract awarded to a governmental
unit incorporates a Cost Accounting Standards (CAS) clause, the
requirements of that clause shall apply. In such cases, the
governmental unit and the cognizant Federal agency shall
establish an appropriate advance agreement on how the
governmental unit will comply with applicable CAS requirements
when estimating, accumulating and reporting costs under CAS-
coveired contracts. The agreement shall indicate that OMB
Circular A-87 requirements will be applied to other Federal
awards. In all cases, only o^e.set,of records needs to be
maintainedizby the "governmentax unit.
3
-------
B. Definitions
1 "Approval or authorization of the awarding or cognizant
Federal agency" means documentation evidencing consent prior to
incurring a tspecafic cost. If such costs are specifically
identified in a Federal award document* approval of the document
constitutes ipprovai of the cos t s. If the costs are covered by a
State/lpcal^wide cost allocation plan or an indirect cost
proposal, approval of the plan constitutes the approval.
2* "Award" means grants, cost reimbursement contracts and
other, agreement's between a State* local and Indian tribal
government and the Federal Government.
3. *Awarding agency" means (a) witn respect to a grant,
cooperative agreement, or cost reimbursement contract, the
Federal agency, and (b) with respect to a subaward, the party
that awarded the subaward.
4. "Central service cost allocation plan" means the
documentation identifying, accumulating, 'and allocating or
developing billing rates based on the allowable costs of services
provided by a governmental unit on a centralized basis to its
departments and agencies. The costs of these services may be
allocated or. billed to users.
5. "Claim" means a written demand or written assertion by
the governmental unit or grantor seeking, as a matter of right,
the payment of money in a sum certain, the adjustment or
interpretation of award terms, or other relief arising under or
relating to the award. A voucher, invoice or other routine
request for payment .that is not a dispute when submitted is not a
claim. Appeals, such as those filed by a governmental unit in
response to .questioned audit costs, are not considered claims
until a final management decision is made by the Federal awarding
agency.
6. "Cocmizant agency" means the Federal agency responsible
revriewip negotiating, and approving cost allocation plans
or indirect cost proposals developed under this Circular on
behalf of all Federal agencies. OMB publishes a listing of
cognizant agencies.
1. "Common Rule" means the "Uniform Administrative
?.ft7'irements 'or Grants and Cooperative Agreements to State and
Local Governments; Final Rule" originally issued at 53 FR 8034—
8103 (March 11, .1988). Other common rules, will be referred to by
their specific titles.
8. "Contract" means a mutually binding legal relationship
obligating the seller to ""fu^.rrJsrh the supplies or services
(including construction) and the buyer to pay for them. It
4
-------
includes all types of- commitments that obligate the government to
an expenditure of appropriated funds and that, except as
otherwise authorized, are in writing In addition to bilateral
instruments, contracts include /but are not limited to): awards
and notices of awards; job orders or cask orders issued under
basic ordering agreements; letter contracts? orders, such as
purchase orders, under tfhich the contract becomes effective by
written acceptance or performance; and, bilateral contract
modifications. Contracts "do not include grants and cooperative
agreements covered by 31 U.S.C. 6301 et seq.
9. "Cost" means an amount as determined on a cash,
accrual, or other basis acceptable to the Federal awarding or
cognizant agency. It does not include transfers to a general or
similar fund.
10. "Cost allocation plan" means central service cost
allocation plan, public -assistance cost allocation plan, and
indirect cost rate proposal. Each of these terms are further
defined in this section.
11. "Cost objective" means a function, organizational
subdivision, contract, grant, or other activity for which cost
data are needed and for which costs are incurred.
12. "Federally-recognized Indian tribal government" means
the governing body or a governmental agency of any Indian tribe,
band, nation, or other organized group or community (including
ar.y native village as defined in Section 3 of the Alaska Native
Claims Settlement Act, 85 Stat. 688) certified by the Secretary
of the interior as eligible for the special programs and services
provided through th£ Bureau of Indian Affairs.
13. "Governmental unit" means the entire State, local, or
federally-recognized Indian tribal government, including any
component thereof. Components of governmental units may function
independently of the governmental unit in accordance with the
term of the award.
14. "Grantee department or agency" means the component of a
State, local, or federally-recognized Indian tribal government
which is responsible for the performance or administration of all
or some part of a Federal award.
15. "indirect ^ost race proposal" r-ians the documentation
prepared by a governmental unit or component thereof to
substantiate its request for the establishment of an indirect
cost rate as described in.Attachment E of this Circular.
16. "Local government""means a county, municipality, city,
town, "township, local public authority, school district, special
district, intrastate district, council of governments (whether or
5
-------
not incorporated as a non-profit corporation under State law)-,
any,other regional or interstate government entity, or anv agency
or instrumentality of a local government.
17. "Public assistance cost allocation plan" means a
narrative description of che procedures that will be used in
identifying, measuring and allocating all administrative costs to
all of the programs administered or supervised by State public
assistance agencies as described in Attachment D of this
Circular.
18. "State" means, any of the several States of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, any territory or possession of the United States, or any
agency or instrumentality of a State exclusive of local
governments.
C. Basic Guidelines
1. Factors affecting allowability of costs. To be
allowable under Federal awards, costs must meet the following
general criteria:
a. Be necessary and reasonable for proper and
efficient performance and administration of Federal awards.
b. Be allocable to Federal awards under the
provisions of this Circular.
c. Be authorized cr r.ot prohibited under State or
local laws or regulations.
d. Conform to any limitations or exclusions set forth
in these principles, Federal laws, terms and conditions of the
Federal award, or other governing regulations as to types or
amounts of "cost items.,
e. Be consistent with policies, regulations, and
procedures that apply uniformly to both Federal awards and other
activities of the governmental unit.
f. Be accorded consistent treatment. A cost may not
be assigned to a Federal award as a direct cost if any other cost
incurred for the same purpose in like circumstances has been
allocated to the Federal award as an indir'.-t cost.
g. Except as otherwise provided for in this Circular,
be determined in accordance with generally accepted accounting
principles.
h. Tot be include^ as a cost or used ito meet cost
sharing or matching requirements of any other Federal award in
6
-------
either the current or a prior period, except as specificallv
provided by Federal law or regulation.
i. Be the net of all applicable credits.
j. Be adequately documented.
Reasonable costs. A cost is reasonable if, in its
nature and amount, it does not exceed that which would oe
incurred by a prudent person under the circumstances prevailing
at the time the decision Was made to incur the .cost . The
question of reasonableness is particularly important when
governmental units or components are predominately federally-
funded. In determining reasonableness of a given cost;
consideration shall be given to:
a. Whether the cost is of a type generally recognized
as ordinary and necessary for the operation of the governmental
unit or the performance of the Federal award.
b. The restraints or requirements imposed by such
factors as: sound business practices; arms length bargaining;
Federal, State and other laws and regulations; and, terras and
conditions of the Federal award
c. Market prices for comparable goods or services.
d. Whether the individuals concerned acted with
prudence in the circumstances considering their responsibilities
to the governmental tnit, its employees, the public at large, and
the Federal Government.
e. Significant deviations from the established
practices of the governmental unit which may unjustifiably
increase the Federal award's cost.
3. Allocable costs.
a. A cost is allocable to a particular cost objective
if the goods or services involved are chargeable or assignable to
such cost objective in accordance with relative benefits
received.
b. . All activities which benefit from the governmental
unit's indirect cost, including unallowable activities and
services donated to the .governmental unit by third parties, will
receive an appropriate allocation of' indirect.costs.
c. Any cost allocable to a particular Federal award
or cost objective under the principles provided for in this
Circular-may not be charged-coL other Federal* awards- to overcome
fund deficiencies, to avoid restrictions imposed by law
7
-------
or terms, of the Federal awards, or for other reaspns. However,
this prohibition would "not preclude governmental units from
shifting costs that are allowable under two or more awards in
accordance with existing program agreements.
d. Where an accumulation of indirect costs will
ultimately result in charges to a Federal award/ a cost
allocation plan will be tequired as described in Attachments c,
D, and E.
4. Applicable credits.
a. Applicable credits refer to those receipts or
reduction of expenditure-type transactions that offset or reduce
expense items allocable to Federal awards as direct or indirect
costs. Examples of such transactions are: purchase discounts,
rebates or allowances, recoveries or indemnities on losses,
insurance refunds or rebates, and adjustments of overpayments or
erroneous charges. To tne extent that such credits accruing to
or received by the governmental unit relate to allowable costs,
they shall be credited to the Federal award either as a cost
reduction cr- cash refund, as appropriate.
b. In some instances, the amounts received from the
Federal Government to finance activities or service operations of
the governmental unit should be treated as applicable credits.
Specifically, the concept of netting such credit items
(including any amounts used to meet cost sharing or matching
requirements) should be recognized in determining the rates or
amounts to be charged to Federal awards (See Attachment B, item
15, "Depreciation and use allowances," for areas of potential
application in the matter of Federal financing of activities.)
D. Composition of Cost
1. Total cost. The total cost of Federal awards is
comprised of the allowable direct cost of the program, plus its
allocable portion of allowable indirect costs, less applicable
credits.
2. Classification of costs. There is no universal rule
for classifying certain costs as either direct or indirect under
every accounting system. A cost may be direct with respect to
some specific service or function, but indirect with respect to
the Federal award or other final cost objective. Therefore, it
is essential that each item of cost be treated consistently in
like circumstances either as a direct or an indirect cost.
Guidelines for determining direct and indirect costs charged to
Federal awards are provided in the sections that follow.
8
-------
E. Direct Costs
1. General-. Direct costs are those that can be identified
specifically with a particular final cost objective.
2. Application. Typical direct costs 2hargeable- to
Federal awards arer
a. Compensation of employees for the time devoted and
identified specifically to the performance of those awards.
b. Cost of materials acquired, consumed, or expended
specifically for the purpose of those awards.
c. Equipment and other approved capital expenditures.
d. Travel expenses incurred specifically to carry out
the award.
3. Minor items. Any direct.cost of a minor amount may be
treated as an indirect cost for reasons of practicality where
such accounting treatment for that item of cost is consistently
applied to all cost objectives.
F. Indirect Costs
1. General. Indirect costs are those: (a) incurred for a
common or joint purpose benefiting more than one cost objective,
and (b) not readily assignable to the cost objectives
specifically benefitted, without effort disproportionate
-------
b. Amounts not recoverable as indirect costs or
administrative costs under one Federal.award may not be shifted
to another Federal award/, unless specifically authorized by
Federal legislation or regulation.
G Interaaencv services. The cost of services provided by one
agency to another within the governmehtal unit may include
allowable direct costs of the sefcvice plus a pro rate share-of
indirect costs. A standard indirect cosr allowance equal to ten
percfent of the direct salary and wage cost of providing the
service (excluding overtime/, snift premiums, and fringe benefits)
may be used in lieU of determining the actual Indirect costs of
the service. These services do not include centralized services
included in central service cost allocation plans as described in
Attachment C.
H. Required Certifications. Each cost allocation plan or
indirect cost rate proposal required by Attachments C and .E must
comply with the following:
1. No.proposal to establish a cost allocation plan or an
indirect cost rate, whether submitted to a Federal cognizant
agency or maintained on file by the governmental unit, shall be
acceptable unless such, costs have been certified by the
governmental unit using the Certificate of Cost Allocation Plan
or Certificate of Indirect Costs as set forth in Attachments C
and E. The certificate must be signed on behalf of the
governmental unit by an individual at a level no lower than chief
financial officer of the governmental unit that submits the
proposal or component covered by the proposal.
2. No cost allocation plan or indirect cost rate shall be
approved by the Federal Government unless the plan or rate
propo.sal has been certified. Where it is necessary to establish
a cost allocation plan or an indirect'cost rate and the
governmental unit has not submitted a certified proposal for
establishing such a plan or rate in accordance with the
requirements, the Federal Government may either disallow all
indirect costs or unil: " ly establish s-ich a plan or rate.
Such a plan or rate may oe based upon audited historical data or
such other data that have been furnished to the cognizant Federal
agency and for which it can be demonstrated that all unallowable
costs have been excluded. When a cost allocation plan or
indirect cost rate is unilaterally established by the Federal
Government because of failure of the governmental unit to submit
a certified proposal, the pj.an or rate established will be set to
ensure that potentially unallowable costs will not be reimbursed.
10
-------
Circular No. A-87
Attachment B
SELECTED ITEMS OF COST
TABLE OF CONTENTS
1. Accounting
2. Advertising and public relations costs
3. Advisory councils
4. Alcoholic beverages
5. Audit services
6. Automatic electronic data processing
7. Bad debts
8. Bonding costs
9. Budgeting
10. Communications
11. Compensation for personnel services
a. General
b. Reasonableness
c. Unallowable costs
d. Fringe benefits
e. Pension plan costs
f. Post-retirement health benefits
g. Severance Pay
h. Support of salaries and wages
i. Donated Services
12. Contingencies
13. Contributions and donations
14. Defense and prosecution of criminal and civil proceedings,
and claims
15. Depreciation and use allowances
16. Disbursing service
17. Employee morale, health, and welfare costs
18. Entertainment
1°. Equipment and other capital expenditures
20. Fines and per.alties
21. Fund raising and investment management costs
22. Gains and losses on disposition of depreciable property and
other capital assets and substantial relocation of Federal
programs.
23. General government expenses
2h. Idle facilities and idle capacity
25. Insurance and indemnification
26. Interest
27.. Lobbying
28. Maintenance, operations, and repairs
29. Materials and supplies
30. Memberships, su'c^riptr'rs, and .professional activities
31. Motor pools
32. Pre-award costs
33. Professional service costs
-------
34. Proposal costs
35. Publication anil printing costs
36. Rearrangements and alterations
37. Recorfversion costs
38. Rental costs
39. Taxes
40. Training
41. Travel coses
.42. Underrecoyery of costs under Federal agreements
Sections 1 through 4z provide principles to be applied in
establishing the allowability or unallowability of certain items
of cost. These principles, apply whether a cost is treated as
direct or indirect. A cost is allowable for Federal
reimbursement only to the extent of benefits received by Federal
awards and its conformance with the general policies and
principles stated in Attachment A to this Circular. Failure to
mention a particular item of cost in these sections is not
intended to imply that it is either allowable or unallowable;
rather, determination of allowability in each case should be
based on the treatment or standards provided for similar or
related items of cost.
1. Accounting. The cost of establishing and-maintaining
accounting and other information systems is allowable.
2. Advertising and public relations costs.
a. The term "advertising costs" means, the costs of
advertising meaia and corollary administrative costs.
Advertising media include magazines, newspapers,' radio and
television programs direct mail, exhibits, and the like.
b. The term "public relations" includes community
relations and means those activities dedicated to maintaining the
image of the governmental unit "or maintaining or promoting
understanding and favorable relations with the community or
public at large or any segment of the public.
c. Advertising costs are allowable only when incurred for
the recruitment of personnel, the procurement of goods and
services, the disposal of surplus materials, and any other
specific purposes necessary to meet the requirements of the
Federal award. Advertising costs associated with the disposal of
surplus materials are not allowable where all disposal costs are
reimbursed based on a standard rate as specified in the grants
management common rule.
d. Public relations costs are allowable when:
(1) Speciricaliy equired by the Federal award and then
only as a direct cost
2
-------
(2) Incurred to communicate with the. public and press
pertaining to specific activities or accomplLshments that result
from performance of the Federal award and then onxy as a direct
cost; or
(3) Necessary to conduct general liaison with, news
media and government public relations officers, to the. extent
that such activities are limited to communication and liaison
necessary to keep the public informed on matters of £ubiic
concern, such as notices of Federal contract/grant awaras,
financial matters, etc.
e. Unallowable advertising and public relations costs
include the following:
(1) All advertising and public relations costs other
than as specified in subsections c. and d.;
(2) Except as otherwise permitted by these cost
principles, costs of conventions, meetings, or other events
related to other activities of the governmental unit including:
(a) Costs of displays, demonstrations, and
exhibits;
(b) Costs of meeting rooms, hospitality suites,
and other special facilities used in conjunction with shows and
other special events; and
(c) Salaries and wages of employees engaged in
setting up and displaying exhibits, making demonstrations, and
providing briefings;
(3) Costs of promotional items and memorabilia,
including models, gifts, and souvenirs; and
(4) Costs of advertising and public relations designed
solely to promote the governmental unit.
3. Advisory councils. Costs incurred by advisory councils or
committees are allowable as a direct cost where authorized by the
Federal awarding agency or as an indirect cost where allocable to
Federal awards.
Alcoholic beverages. Costs of alcoholic beverages are
unallowable.
5. Audit services. The costs of audits are allowable provided
that the audits were performed in accordance with the Single
Audit Act, as implemented-by Circular A-128, "Audits of State and
Local Governments." Generally, the percentage of costs charged
to Federal awards for a single audit shall riot exceed the
3
-------
percentage derived by dividing Federal funds expended by total
funds expended.by the; recipient or subrecipient (including
program matching funds) during the fiscal year. The percentage
may be exceeded only if appropriate, documentation demonstrates
higher actual costs.
Other audit costs are allowable if specifically approved by
the awarding or cognizant agency as a direct cost to an award or
included as an indirect cost in a cost allocation plan or rate.
6. Automatic electronic data processing. The cost of data
processing services is allowable {but see section 19, Equipment
and other capital expenditures).
7. Bad debts. Any losses arising from uncollectible accounts
and other claims, and related costs, are unallowable unless
provided for in Federal program award regulations.
8. Bonding costs. Costs of bonding employees and officials are
allowable to the extent that such bonding is in accordance with
sound business practice.
9. Budgeting. Costs incurred for the development, preparation,
presentation, and execution of budgets are allowable.
10. Communications. Costs of telephone, mail, messenger, and
similar communication services are allowable.
11. Compensation for personnel services.
a. General. Compensation for personnel services includes
all remuneration, padd currently or accrued, for services
rendered during the period of performance under Federal awards,
including but not necessarily limited to wages, salaries, and
fringe benefits. The costs of such compensation are allowable to
the extent that they satisfy the specific requirements of this
Circular, and that the total compensation for individual
employees:
(1) Is reasonable for the services rendered and
conforms to the established policy of the governmental unit
consistently applied to both Federal and non-Federal activities;
(2) Follows an appointment made in accordance with a
governmental unit's laws and rules and meets merit system or
other requirements required by Federal.law, where applicable; and
(3) Is determined and supported as provided in
subsection h.
b. Reasonableness. "Compensation fot employees engaged in
work on Federal awards will be considered reasonable- to the
4
-------
extent that it is consistent with that paid for similar work in
other activities of the governmental unit. In cases where the
kinds of employees required for Federal awards are not found in
the otner activities .of the governmental unit, compensation will
be considered reasonable to the extent that it is comparable to
that paid for similar work in the labor market in which the
employing government .competes for the kind of employees, involved.
Compensation surveys providing data representative of the labor
market involved will be an acceptable basis for evaluating
reasonableness.
c. Unallowable costs. Costs which are unallowable under
other sections of these principles shall not be allowable under
this section solely on thie basis that they constitute personnel
compensation.
d. Fringe benefits.
(1) Fringe benefit" are allowances and services
provided by employers to their employees as compensation in
addition to regular salaries and wages. Fringe benefits include,
but are not .limited to, the costs of leave, employee insurance,
pensions, and unemployment benefit plans. Except as provided
elsewhere in these principles, the costs of fringe benefits are
allowable to the extent that the benefits are reasonable and are
required by law, governmental unit-employee agreement, or an
established policy of the governmental unit.
(2) The cost of fringe benefits in the form of regular
compensation paid to employees during periods of authorized
absences from the job, such as for annual leave, sick leave,
holidays, court le^ve, military leave, and other similar
benefits, are allowable if: (a) they are provided under
established written leave policies; (b) the costs are equitably
allocated to all related activities, including Federal awards;
and, (c) the accounting basis (cash or accrual) selected for
costing each type of leave is consistently followed by the
governmental unit-
(3) When a governmental unit uses the cash basils of
accounting, the cost of leave is recognized in the period that
the leave is taken and paid for. Payments for unused leave when
an employee retires or terminates employment are allowable in the
year of payment provided they are allocated as a general
administrative expense to all activities of the governmental unit
or component.
(4) The accrual basis may be only used for those types
of leave for which a liability as defined by Generally Accepted
Accounting PrilSiples uAAP) l-gts when the lea^^e is earned.
When a governmental unit uses the accrual basis of accounting, in
accordance with GAAP, allowable leave costs are the lesser of the
5
-------
amount accrued or funded.
(5j The cost of fringe benefits in the form of
employer contributions or expenses for social security; employee
life/health, unemployment/ and worker's condensation insurance
(except as indicated in section 25, Insurance and
indemnification) pension plan costs (see subsection e,}; and
other similar benefits are allowable,, provided such benefits are
granted under established written policies. Such benefits,
whether treated as indirect costs or as direct costs, shall be
allocated to Federal awards and all other activities in a manner
consistent with the pattern of benefits attributable to the
individuals or group(s) of employees whose salaries and wages are
chargeable to such Federal awards ana other activities.
e; Pension plan costs may be computed using a pay-as-you-
go method or an acceptable actuarial cost method in accordance
with established written policies of the governmental unit.
(1) For pension plans financed on a pay-as-you-go
method, allowable costs will be limited to those representing
actual payments to retirees or their beneficiaries.
(2) Pension costs calculated using an actuarial cost-
based method recognized by GAAP are allowable for a given fiscal
year if they are funded for that year within six months after the
end of that year. Costs funded after the six month period (or a
later period agreed to by the cognizant agency) are allowable in
the year funded. The cognizant agency may agree to an extension
of the six month period if an appropriate adjustment is made to
compensate for. the timing of.the charges to the Federal
Government and related Federal reimbursement and the governmental
unit's contribution to the pension fund. Adjustments may be made
by cash refund or other equitable procedures to compensate the
Federal Government for the time value of Federal reimbursements
in excess of contributions to the pension fund,
(3) Amounts funded by the governmental unit in excess
of the actuarially determined amount for a riscal year may be
used as. the governmental unit's contribution in future periods.
(4) When a governmental unit converts to an acceptable
actuarial cost method, as defined by GAAP, and funds pension
costs in accordance with this method, the unfunded liability at
the time of conversion shall b? allowable if amortized over a
period of years in accordance with GAAP.
(5) The Federal. Government shall receive an equitable
share of any previously allowed pension costs (including earnings
thereon) which revert or itiu to the governmental unit in the
form'of a refund, withdrawal, or other credit.
6
-------
f Post-retirement health benefits. Post;-retirement
health benefits (PRHH) refers to costs of health insurance or
health services not included in a pension plan covered by
.subsection e. for retirees and their spouses, dependents, and
survivors. PRHB costs may be computed using a pay-as-you-go
method or an acceptable actuarial cost method in accordance with
established written polices of the governmental unit.
(1) For PRHB financed on a pay as-you-go method,
allowable costs will be limited to those representing actual
payments to retirees or their beneficiaries.
(2) PRHB costs calculated using an actuarial cost
method, recognized by GAAP are.allowable if they are funded for
that year within six months after the end of that year. Costs
funded after the six month period (or a later period agreed to by
the cognizant agency) are allowable in the year funded. The
cognizant agency may agree to an extension of the six month
period if an appropriate adjustment is made to compensate for the
timing of the charges to the Federal Government and related
Federal reimbursements and the governmental unit's contributions
to the PRHB fund. Adjustments may be made by cash refund,
reduction in current year's PRHB costs, or other equitable
procedures to compensate the Federal Government for the"time
value of Federal reimbursements in excess of contributions to the
PRHB fund.
(3) Amounts funded in excess of the actuarially
determined amount for a fiscal year may be used as the
government's contribution in a future period.
(4) When a governmental unit converts to an acceptable
actuarial cost metnod and funds PRHB costs in accordance with
this method, the initial unfunded liability attributable to prior
years shall-be allowable if amortized over a period of years in
accordance -with GAAP, or, if no such GAAP period exists, over a
period negotiated with the cognizant agency.
(5) To be allowable in the current year, the PRHB
costs must be paid either to:
(a) An insurer or other benefit provider as
current year costs or premiums, or
(b) An insurer or trustee to maintain a trust
fund or reserve for the sole purpose of providing post-retirement
benefits to retirees and other beneficiaries.
(65 The Federal Government shall receive an equitable
sha?e of any amounts pf previously allowed post-retirement
benefit costs (including ear ings thereon) which revert or inure
to the governmental unit in the form of a refund, withdrawal, or
7
-------
other credit
g. Severance pay.
(1) Payments in addition to regular salaries and Wages
made to workers whose employment is being terminated are
allowable to the extent that, in each case, they are required by
(a) law, (b) employer-femployee agreement, or (c) established
written policy,
{2) Severance payments (but not accruals) associated
with normal turnover are allowable. Such payments shall be
allocated, to all activities of the governmental unit as an
indirect cost-
(3) Abnormal or mass severance pay will be considered
on a case-by-case basis and is allowable only if approved by the
cognizant Federal agency.
h. Support of salaries and wages. These standards
regarding time distribution are in addition to the standards for
payroll- documentation.
(1) Charges to Federal awards for salaries and wages,
whether treated as direct or indirect costs, will be based on
payrolls documented in accordance with generally accepted
practice of the governmental unit and approved by a responsible
official(s) of the governmental unit.
(2) No furtner documentation is required for the
salaries and wages of employees who work in a single indirect
cost activity.
(3) Where employees are expected to work solely on a
single Federal award or cost objective, charges for their
salaries and wages will be supported by periodic certifications
that the employees worked solely on that program for the period
covered by the certification. These certifications will be
prup::red at least s'smi-annually and will be signed by the
employee or supervisory official having first hand knowledge of
the work performed by the employee.
(4) Where employees work on multiple activities or
cost objectives, a distribution of their salaries or wages will
be supported by personnel activity reports or equivalent
documentation which meets the standards in subsection (5) unless
a statistical sampling system (see subsection (6)) or other
substitute system has been approved by the cognizant Federal
agency. Such documentary support will be required where
employees work on:
8
-------
(a) More than one Federal award*
(t>) A Federal award and a non-Federal award,
(c) An indirect cost activity ana a direct cost
activity,
(d). Two or more indirect activities which are
allocated using"different allocation bases# or
(e) An unallowable activity and a direct or
indirect cost activity.
(5) Personnel activity reports or equivalent
documentation must meet the following standards:
(a) They must reflect an after-the-fact
distribution of the actual acfvity of each employee,
(b) They must account for the total activity for
which each employee is compensated,
(c) They must be prepared at least monthly and
must coincide with one or more pay periods, and
(d) They must be signed by the employee.
(e) Budget estimates or other distribution
percentages determined before the services are performed do not
qualify as support for charges to Federal awards but may be used
for interim accounting purposes, provided that:
(i) The governmental unit's system for
establishing the- estimates produces reasonable approximations of
the activity actually performed;
(ii) At least quarterly, comparisons of
actual costs to budgeted distributions based on the monthly
activity reports are made. Costs charged to Federal awards to
reflect adjustments made as a result of the activity 'actually
performed may be recorded annually if the quarterly comparisons
show the differences between budgeted and actual costs are less
than ten percent; and
(iii) The budget estimates or other
distribution percentages are revised at least quarterly, if
necessary, to reflect changed circumstances.
(6) Substitute systems for allocating salaries and
wages to Federal awards may be-; jsed in place- of activity repc-rts
These Systems are subject co approval if required by the
cognizant agency. Such systems may include, but are not limited
.9
-------
to# random moment sampling, esse counts, oi other quantifiable
measures of employee effort.
(a) Substitute systems which use sampling methods
(primarily for Aid to Families with Dependent Children (AFDC),
Medicaid, ana ocner public assistance programs) must meet
acceptable statistical sampling standards including:
(i) The sampling universe must include all of
the employees whose salaries and wages are to be allocated based
on sample results except as provided in subsection (c)•
(ii) The entire time period involved must be
covered by the sample; and
(iii) The results must be statistically valid
and applied to the period being sampled.
(b) Allocating charges for the sampled employees
supervisors, clerical and support staffs, based on the results of
the sampled employees, will be acceptable.
(c) Less than full compliance with the
statistical sampling standards noted in subsection (a) may be
accepted by the cognizant agency if it concludes that the .amounts
to be allocated to Federal awards will be minimal, or if it
concludes that the system proposed by the governmental unit will
result in lower costs to Federal awards than a system which
complies with the standards.
(7) Salaries and wages of employees used in meeting
cost sharing or matc/hing requirements of Federal awards must be
supported in the same manner as those claimed as allowable costs
under Federal awards.
i. Donated services.
(1) Donated or volunteer services may be furnished to
-overr.-.ental r'.t by professional and technical personnel,
curiouitjnts, ana other skilled and unskilled labor. The value of
these services is not reimbursable either as a direct or indirect
cost. However, the value of donated services may be used to meet
cost sharing or matching requirements in accordance with the
provisions of the Common Rule.
(2) The value of donated services utilized in the
perrormance of a direct cost activity.shall, when material in
amount, be considered in the determination of the governmental
unit's indirect costs or rate(s) and, accordingly, shall be
allocated a proportionate share of applicable indirect costs.
(3) To the exfer.. j.-easible, donated- services will be
supported by the same methods jsed by the governmental unit to
10
-------
support the alienability of regular personnel services.
12. Contingencies. Contributions to a contingency reserve or
any simi 1 arprovision made for events the occurrence of which
cannotbe foretold with certainty as to time, or intensity, or
with an assurance of their happening,, are unallowable. The term
"contingency 'reserve" excludes self—insurance reserves (see
subsection 25.c
-------
b. The computation of depreciation or use allowances shall
be, based on the acquisition cost of the assets involved. Where
actual cost reconas have not been maintained, a reasonable
estimate of the original acquisition cost may be used. The value
of an asset donated to the governmental unit by an'unrelated
third party snail be its fair market value at the time of
donation. Governmental or quasi-governmental organizations
located within the same State shall not be considered unrelated
third parties for this purpose;
The computation of depreciation or use1allowances will
exclude:
(1) The cost of land;
(2) Any portion of the cost of buildings and equipment
borne by or donated by the Federal Government irrespective of
where title was originally vested or where it presently resides;
and
(3) Any portion of the cost of buildings and equipment
contributed by or for the governmental unit, or a related donor
organization, in satisfaction of a matching requirement.
d. Where the use allowance method is followed, the use
allowance for buildings and improvements (including land
improvements, such as paved parking areas, fences, and sidewalks)
will be computed at an annual rate not exceeding two percent of
acquisition costs. The use allowance for equipment will be
computed at an annual rate not exceeding 6 2/3 percent of
acquisition cost. When the use allowance method is used for
buildings, the entire building must be treated as a single asset;
the building's components (e.g., plumbing system, heating and air
condition, etc.) cannot be segregated .from the building's shell.
The two.percent limitation, however, need not be applied to
equipment which is merely attached or fastened to the building
but not permanently fixed to it and which is used as furnishings
or decorations or for specialized purposes (e.g., dentist chairs
and Cental treatment units, counters, laboratory benches bolted
to the floor, dishwashers, modular furniture, carpeting, etc.).
Such equipment will be considered as not being permanently fixed
to the building if it can be removed without the destruction of,
or need for costly or extensive alterations or repairs, to the
building or the equipment. Equipment that meets these criteria
will be subject to the 6 2/3 percent equipment use allowance
limitation.
e. Where the depreciation method is followed, the period
of useful service (useful life) established in each case for
usablet capital -resets- -r-^t • ta.hs^ \nto -consideration such factors
as .type^ of construction, nature of the equipment "tlsed, historical
usage patterns, technological developments, and the renewal and
12
-------
replacement policies of the governmental unit followed for the
individual Items or, classes of assets involved. In the absence
of clear evidence indicating that, the expected consumption of the
asset will be significantly greater in the early portions than in
the later portions of its useful life,, the straight line method
of depreciation sball.be used. Depreciation methods once used,
shall not be changed unless approved by the Federal cogiiissant or
awarding agency. When the depreciation method is introduced for
application to an asset previously subject to a use allowance,
the annual depreciation charge thereon may not exceed the amount
that would have resulted had the depreciation method been.in
effect from the date of acquisition of the asset. The combination
of use allowances and depreciation applicable to the asset shall
not exceed the total acquisition cost of the asset or fair market
value at time of donation.
f. When the depreciation method is used for buildings, a
building's shell may be segregated from the major component of
the building (e.g., plumbing system, heating, and air
conditioning system, etc.) and each major component depreciated
over its estimated useful life, or the entire building (i.e., the
shell and all components) may be treated as a single asset and
depreciated over a single useful life.
g. A reasonable use allowance may be negotiated for any
assets that are considered to be fully depreciated, after taking
into consideration the amount of depreciation previously charged
to the government, the estimated useful life remaining at the
time of negotiation, the effect of any increased maintenance
charges, decreased efficiency due to age, and any other factors
pertinent to the utilization of the asset for the purpose
contemplated.
h. Charges for use allowances or depreciation must.be
supported by adequate property records. Physical inventories
must be taken at least once every two years (a statistical
sampling approach is acceptable) to ensure that assets exist, and
are in use. Governmental units will manage equipment in
accordance with State laws' and procedures. When the depreciation
method is followed, depreciation records indicating the amount of
depreciation taken each period must also be maintained.
16. Disbursing service. The cost of disbursing funds by the
Treasurer or 'other designated officer is allowable.
17. Employee morale, health, and welfare costs. The costs of
health or first-aid clinics and/or infirmaries, recreational
facilities, employee counseling services, employee information
publications, and any related expenses incurred in accordance
with-a governoentaL.Ainit's jjplicy are allowable. Income
generated from any of these a:cciv"ities wilj^be offset against
expenses.
13
-------
18. Entertainment. Costs of entertainment, including amusement,
diversion, and social- activities and any costs directly
associated with' such costs (such as tickets to shows or sports
events, meals, lodging, rentals, transportation, and gratuities)
are unallowable.
19. Equipment and other capital expenditures.
a. As us.ed .in this section the following terms have the
meanings as set forth below:
(1) "Capital expenditure" means the cost of the asset
including the cost to put it in place. Capital expenditure for
equipment means the net invoice price of the equipment, including
the cost of any modifications, attachments, accessories, or
auxiliary apparatus necessary to make it usable for the purpose
for which it is acquired. Ancillary charges, such as taxes,
duty, protective in transit insurance, freight, and installation
may be included in, or excluded from, capital expenditure cost in
accordance with the governmental unit's regular accounting
practices.
(2) "Equipment" aeans an article of nonexpendable,
tangible personal property having a useful life of more than one
year and an acquisition cost which equals the lesser of (a) the
capitalization level established by the governmental unit for
financial statement purposes, or (b) $5000.
(3) "Other capital assets" mean buildings, land, and
improvements to buildings or land chat materially increase their
value or useful life.
b. Capital expenditures which are not changed directly to
a Federal award may be recovered through use allowances or
depreciation on buildings, capital improvements, and equipment
(see section 15). See also section 38 for allowability of rental
costs for buildings and equipment.
c. Capital expenditures for equipment, including
replacement equipment, other capital assecs, and improvements
which materially increase the value or useful life of equipment
or other capital assets are allowable as a direct cost when
approved by the awarding agency. Federal awarding agencies are
authorized at their option to waive or delegate this approval
requirement.
d. Items of equipment with an acquisition cost of less
than $5000 are considered to be supplies and are allowable as
direct costs of Federal awards without specific awardinq agency
approval.
14
-------
e. The unamortized portion of any equipment written off as
a result of a change in capitalization levels- may be recovered by
(1) continuing to claim the otherwise allowable use allowances or
depreciation charges on the equipment or by (2) amortizing the
amount to be written off over a period of years negotiated with
the cognizant agency.
f. When replacing equipment purchased in whole or in part
with Federal funds, the governmental unit may use the equipment
to be replaced as a trade-in or sell the property and use the
proceeds to offset the cost of the replacement property.
20. Fines' and penalties. Fines, penalties, damages, and other
settlements resulting from violations (or alleged violations) of,
or failure of the governmental unit to comply with, Federal,
State, local, or Indian tribal laws and regulations are
unallowable except when incurred as a result of compliance with
specific provisions of the Federal award or written instructions
by the awarding agency authorizing in advance such payments.
21. Fund raising and investment management costs.
a. Costs of organized fund raising, including financial
campaigns, solicitation of gifts and bequests, and similar
expenses incurred raise capital or obtain contributions are
unallowable, regardless of the purpose for which the funds will
be used.
b. Costs of investment counsel _and staff and similar
expenses incurred to enhance income from investments are
unallowable. However, such costs associated with investments
covering pension, self-insurance, or other funds which include
Federal participation allowed by this Circular are allowable.
c. Fund raising and investment activities shall be
allocated an appropriate share of indirect costs under the
conditions described in subsection C.3.b. of Attachment A'.
2?. Gains and losses on disposition of depreciable property and
-•¦th°r cs^i — "issets and substantial relocation of Federal
programs.
a; (1) Gains and losses on the sale, retirement, or other
disposition of depreciable property shall be included in the year
in which they occur as credits or charges to the asset cost
-g(s) in which the property was included.. The amount of
the gain or loss to be included as a' credit or charge to the
appropriate asset cost grouping(s) shall be the difference
between the amount realized on the property and the undepreciated
basis of the property
15
-------
(2) Gains and losses on the disposition of depreciable
property shall not be recognized as a separate credit or charce
under the following conditions:
(a) The gain or loss is processed through a
depreciation account and is reflected in the depreciation
allowable under sections 15 and 19.
(b) The property is given in exchange as part of
the purchase price of a similar item and the gain or loss is
taken into account in determining the depreciation cost basis of
the new item.
(c) A loss results from the failure to.maintain
permissible insurance, except as otherwise provided in subsection
25 .'d.
(d) Compensatenn for the use of the property was
provided through use allowances in lieu of depreciation.
b. Substantial relocation of Federal awards from a
facility where the Federal Government participated in the
financing to another facility prior to the expiration of- the
useful life of the financed facility requires Federal agency
approval. The extent of the relocation, the amount of the
Federal participation in the financing, and the depreciation
charged to date may require negotiation of space charges for
Federal awards.
c. Gains or losses of any nature arising from the sale or
exchange of property other than the property covered in
subsection a., e.g.,fland or included in the fair market value
used in any adjustment resulting from a relocation of Federal
awards covered in subsection b. shall be excluded in computing
Federal award costs.
23. General government expenses.
a. The gener-1 cost* <->* government are unallowable (except
as provided in section 11,. .nese include:
(1) Salaries and expenses of the Office of the
Governor of a State or the chief executive of a political
subdivision or the chief executives of federally-recognized
Indian tribal governments;
(2) Salaries and other expenses of State legislatures,
tribal councils, or similar local governmental bodies, such as
16
-------
county supervisors, city councils, school boards, etc., whether
incurred for purposes o-f legislation or executive direction;
(3) Cost of the judiciary branch of a Government;
{4) Cost of prosecutorial activities unless treated as
a direct cost to a specific program when.authorized by program
regulations (however, this d6es not preclude the allowability of
other legal activities of the Attorney General); and
(5) Other general types of government services
normally provided to the general public, such as fire and police,
unless provided for as a direct cost in program regulations.
b. For federally-rrecognized Indian tribal governments and
Councils Of Governments (COGs), the portion of salaries and
expenses directly attributable to managing and operating Federal
programs by the chief executive and his staff is allowable.
24. Idle facilities and idle capacity.
a. As used in this section the following terms have the
meanings set forth below:
(1) "Facilities" means land and buildings or any
portion thereof, equipment individually or collectively, or any
other tangible capital asset, wherever located, and whether owned
or leased by the governmental unit.
(2) "Idle facilities" means completely unused
facilities that are excess to the governmental unit's current
needs.
(3) "Iaie capacity" means the unused capacity of
partially used facilities. It is the difference between (a) that
which a facility could achieve under 100 percent operating time
on a one-shift basis less operating interruptions resulting from
time lost for repairs, setups, unsatisfactory materials, and
othc:. normal delays and.(b) the extent to which the facility was
actually used to meet demands during the accounting period. A
multi-shift basis should be used if it can be shown that this
amount of usage would normally be expected for the type of
facility involved.
(4) "Cost of idle facilities or idle capacity" means
costs such as maintenance, repair, housing, rent, and other
related costs, e.g., insurance, interest, and depreciation or use.
allowances.
b.'" The Lasts of J-^le f-.rUities are unallowable except to
the extent that:
17
-------
(1) They are necessary to meet fluctuations in
workload; or
(2) Although not necessary to meet fluctuations in
workload, they were necessary when acquired and. are now idle
,because of changes in prpgram requirements, efforts to achieve
more economical operations, reorganization, termination, or other
causes which could not have been reasonably foreseen. Under the
exception stated in this subsection, costs of idle facilities are
allowable for a reasonable period of time, ordinarily not to
exceed one year, depending on the initiative taken to use, lease,
or dispose of such facilities.
c. The costs of idle capacity are normal costs of doing
business and are a factor in the normal fluctuations of usage or
indirect Cost rates from period to period. Such costs are
allowable, provided that the capacity is reasonably anticipated
to be necessary or was originally reasonable and is not subject
to reduction or elimination by use on other Federal awards-,
subletting, renting, or sale, in accordance with sound business,
economic, or security practices. Widespread idle capacity
throughout an entire facility or among a group of assets having
substantially the same function may be considered idle,
facilities.
25. Insurance and indemnification.
a. Costs of insurance required or approved and maintained,
pursuant to the Federal award, are allowable.
b. Costs of other insurance in connection with the general
conduct of activities are allowable subject to the following
limitations:
(1) Types and extent and cost of coverage are in
accordance with the governmental unit's policy and sound business
practice.
(2) Costs of insurance or of contributions to any
reserve covering the risk of loss of, or damage to, Federal
Government property are unallowable except to the extent that the
awarding agency has specifically required or approved such costs.
c. Actual losses which could have been covered by
permissible insurance (through a self-insurance program or
otnerwise) axe unallowable, unless expressly provided for in the
Federal award or as described below. However, the Federal
Government will participate in actual losses.of a self insurance
fund that are in excess of' reserves. Costs incurred because of
losses not covered under nominal deductible insurance coverage
provided in keeping with sound management practice, and minor
losses not covered by insurance, such as spoilage, breakage, and
18
-------
disappearance of .small hand tools, which occur in the ordinary
course of operations; are allowaDie.
d. Contributions to a reserve for certain.self-insurance
programs including workers. compensation/ unemployment
compensation, and severance pay, are allowable subject to the
following provisions:
(1) The type of coverage and the extent of coverage
and the rates and premiums would have been allowed had insurance
(including reinsurance) been purchased to cover the risks.
However, provision for known or reasonably Estimated ,self-insurec
liabilities, which do not become payable" for more than one year
after the provision is made, shall not exceed the discounted
present value of the liability. The rate, used for discounting
the liability must be determined by giving consideration to such
factors as the governmental unit's settlement rate for those
liabilities and its investment rate of return.
(2) - Earnings or investment income on reserves must be
credited to those reserves.
(3) Contributions to reserves must be based on sound
actuarial principles using historical experience and reasonable
assumptions. Reserve levels must be analyzed and updated at
least biennially for each major risk being insured and take into
account any reinsurance, coinsurance, etc. Reserve levels
related to employee-related coverages will normally be limited to
the value of claims (a) submitted and adjudicated but not paid,
(b) submitted but not adjudicated, and (c) incurred but not
submitted. Reserve levels in excess of the amounts based on the
above must be identified and justified in the cost allocation
plan or indirect co^t rate proposal.
(4) Accounting records, actuarial studies, and cost
allocation's (or billings) must recognize any significant
differences due to types of insured risk artd losses generated by
the various insured activities or agencies of the governmental
u~.it. If individual departments or agencies of the governmental
unit experience significantly different levels of claims for a
particular risk, those differences are to be recognized by the
use of separate allocations or other techniques resulting in an
equitable allocation.
(5) Whenever-funds are transferred from a self-
insurance reserve to other accounts (e.g., general fund), refunds
shall be made to the Federal Government for its share of funds
transferred, including earned or imputed interest from the date
of transfer.
e. Actual ciaims paia- zo or on oenair ot employees or_
former employees for workers' compensation, unemployment
19
-------
compensation, severance pay, and similar employee benefits (e.g.
subsection 11.f. for post retirement health"benefits), are.
allowable in the year of payment provided (1) the governmental
unit follows a consistent.costing policy and (2) they are
allocated as a general administrative expense to all activities
of the governmental unit.
f . Insurance refunds shall be credited, against insurance
costs in the y?ar the refund is received.
g. indemnification includes securing the governmental unit
against liabilities to third persons and. other losses not
compensated by insurance or otherwise. The Federal Government is
obligated to indemnify the governmental unit only to the. extent
expressly provided for in the Federal award, except as provided
in subsection d.
h. Costs of commercial insurance that protects against the
costs of the contractor for correction of the contractor's own
defects in materials or workmanship are unallowable.
26. Interest.
a. Costs incurred for interest on borrowed capital or the
use of a governmental unit's own funds, however represented, are
unallowable except as specifically provided.in subsection b. or
authorized by Federal legislation.
b. Financing costs (including interest) paid or incurred
on or after tne efreccive date of this Circular associated with
the otherwise .allowable costs of building acquisition,
construction, or fabrication, reconstruction or remodeling
completed on or after October 1, 1980 is allowable, subject to
the conditions in (l)-(4). Financing costs (including-interest)
paid or incurred on .or after the effective date of this Circular
associated with otherwise allowable costs of equipment is
allowable, subject to the conditions in (1) — (4).
(1) The financing is provided (from other than tax or
user fee sources) by a bona fide third party external to the
governmental unit;
(2) The assets are used in support of Federal awards;
(3) Earnings on debt service reserve funds or interest
earned on borrowed funds pending payment of the construction or
acquisition costs are used to offset the current period's cost or
the capitalized interest, as appropriate. Earnings subject to
being Reported to the Federal Internal Revenue Service under
arbitrage retirements are excludable.
20
-------
(4) Governmental units will negotiate the amount of
allowable interest whenever cash payments (interest,
depreciation, use allowances/ and contributions) exceed the
governmental unit's cash payments and other contributions
attributable to that portion of real property used for Federal
awaras.
27. Lobbying. The cost of certain.influencing activities
associated'with obtaining grants, contracts, cooperative
agreements, or loans is an unallowable cost. Lobbying with
respect to certain grants, contracts, cooperative agreements, and
loans shall be governed by the common, ruie, "New Restrictions on
Lobbying" published at 55 FR 6736 (February 26, 1990), including
definitions, and the Office of Management and Budget "Government-
wide Guidance for New Restrictions on Lobbying" and notices
published at 54 FR 52306 (December 20, 1989), 55 FR 24540 (June
15, 1990), and 57 FR 1772 (January 15, 1992), respectively.
28. Maintenance, operations a^.d repairs. Unless prohibited by
law, the cost of utilities, insurance, security, janitorial
services, elevator service, upkeep of grounds, necessary
maintenance, normal repairs ana alterations, and the like are
allowable to the extent that they: (1) keep property (including
Federal property, unless otherwise provided for) in an efficient
operating condition, (2) do not add to the permanent value of
property or appreciably prolong its intended life, and (3) are
not otherwise included in rental or other charges for space.
Costs which add to the permanent value of property or appreciably
prolong its intended life shall be treated as capital
expenditures (see sections 15 and 19) .
29. Materials and supplies. The cost of materials and supplies
is allowable. Purchases should be charged at their actual prices
after deducting all cash discounts, trade discounts, rebates, and
allowances received. Withdrawals from general stores or
stockrooms -should be charged at cost under any recognized method
of pricing, consistently applied. Incoming transportation
charges are a proper part of materials and supply costs.
30. Memberships, s .pscrj; j. . 3, and professional activities.
a. Costs of the governmental unit's memberships in
business, technical, and professional organizations are
allowable.
b. Costs of the gov-orrrental unit's subscriptions to
business, professional, and technical periodicals are allowable.
c. Costs of meetings and conferences where the primary
purpose1 is The a-rssemiTfavrron oG £chnical information, including-
meals, transportation, rental rf melting facilities, and oth>r
incidental costs are allowable.
21
-------
d. Costs of membership in civic and community, social
organizations are allowable as a direct cost with the approval of
the Federal awarding agency.
e. Costs of membership in organizations substantially
engaged in lobbying are unallowable.
31.. Motor pools. The costs or a service organization which
provides automobiles to user governmental units at a mileage or
fixed .rate and/or provides vehicle maintenance, inspection, and
repair services are allowable.
32. Pre-award costs. Pre-award costs are those incurred prior
to the effective date of the award directly pursuant to the
negotiation and in anticipation of the award where such costs are
necessary to comply with the proposed delivery schedule or period
of performance. Such costs are allowable only to the extent that
they would have been allowable if incurred after the date of the
award and only with the written approval of the awarding agency.
33. Professional service costs.
a. Cost of professional and consultant services -rendered
by persons or organizations that are members of a particular
profession or possess a special skill, whether or not officers or
employees of the governmental unit, are allowable, subject to
section 14 when reasonable in relation to the services rendered
and when not contingent upon recovery of the costs from the
Federal Government.
b. Retainer fees supported by evidence of bona fide
services available fcr rendered are allowable.
34. Proposal costs. Costs of preparing proposals for potential
Federal awards are allowable. Proposal costs should normally be
treated as indirect costs and should be allocated to all
activities of the governmental unit utilizing the cost allocation
plan and indirect cost rate proposal. However, proposal costs
may be charged directly to Federal awards witl. ihe prior approval
of the Federal awarding agency.
35. Publication and printing costs. Publication costs,
including the costs of printing (including the processes of
composition, plate-making, press work, and binding, and the end
products produced by sucb processes), distribution, promotion,
mailing, and general handling are allowable.
36. Rearrangements and alterations. Costs incurred for ordinary
and normal rearrangement and alteration of facilities are
alienable. Special"*arrangemei.^s'and alterations'costs incurred
specifically for a Federal award are allowable with the prior
approval of the Federal awarding agency.
22
-------
37 Reconversion costs. Costs.incurred in the restoration or
rehabilitation of the governmental unit's facilities to
'approximately the same condition existing immediately prior to
commencement,'of Federal awards, less costs related to normal wear
and tear, are allowable.
38. Rental costs.
a. Subject to the. limitations described in subsections b.
through d. of this section, rental costs are. allowable to .the
extent that the rates are reasonable in light of such factors as:
rental costs of comparable property, if any; market conditions in
the area; alternatives available; and, the type, life expectancy;
condition, and value of the property -leased.
b. Rental costs under sale and leaseback arrangements are
allowable only up to the amount that would be allowed had the
governmental unit continued to own the property.
c. Rental costs under less-than-arms-length leases are
allowable only up to the amount that would be allowed had title
to the property vested in tne governmental unit. For this
purpose, less-than-arms-lenyth leases include, but are not
limited to, those where:
(1) One party to the lease is able to control or
substantially influence the actions of the other;
(2) Both parties are parts of the same governmental
unit; or
(3) The governmental unit creates an authority or
similar entity to acquire and lease the facilities to the
governmental unit and other parties.
d. "Rental costs under leases which are required to be
treated as capital leases under GAAP are allowable only up to the
amount that would.be allowed had the governmental unit purchased
the property on the date the lease agreement was executed. This
amount would include expenses such as depreciation or use'
allowance, maintenance, and insurance. The provisions of
Financial Accounting Standards Board Statement 13 shall be used
to determine whether a lease is a capital lease. Interest costs
related to capital leases are allowable to the extent they meet
the criteria in section 26.
39. Taxes.
a. Taxes that a governmental unit is legally required to
pay',are allowable, except fop self-assessed taxes that
disproportionately affect Federal"programs "br changes in tax
policies that disproportionately affect Federal programs. This
23
-------
provision becomes effective for taxes paid during the
governmental tlnit'Vs fiTSt fiscal year that begins on pr after
January 1, 1998, and applies thereafter.
b. Gasoline taxes, motor vehicle tees, ana:other taxes
that are in effect user fees for benefits provided to the Federal
Government are allowable.
c. This provision does not restrict the authority of
Federal agencies to identify taxes where Federal participation is
inappropriate. Where the identification of the amount of
unallowable taxes would require an inordinate amount of effort,
the cognizant agency may accept a reasonable approximation
thereof.
40. Training. The cost of training provided for employee
development is allowable.
41. Travel costs.
a. General. Travel costs are allowable for expenses for
transportation, lodging, subsistence, and related ittuai incurred
by employees traveling on official business. Such costs may be
charged on an actual cost basis, on a per diem or mileage basis
in lieu of actual costs incurred, or on a combination of the two,
provided the method used is applied to an entire trip, and
results in charges consistent with those normally allowed in like
circumstances in non-federally-sponsored activities.
Notwithstanding the provisions of section 23, travel costs of
officials covered by that section, when specifically related to
Federal awards, are allowable with the prior approval of a
grantor agency.
b. Lodging and subsistence. Costs incurred by employees
and officers for travel, including costs of lodging, ~ther
subsistence, and. incidental expenses, shall be considered
reasonable and allowable only to the extent such costs do not
exceed charges normally allowed by the governmental unit in its
regular operations as a result of the governmental unit's policy.
In the absence of a written governmental unit policy regarding
travel costs, the rates and amounts established under subchapter
I of Chapter 57 of Title 5, United States Code "Travel and
Subsistence Expenses; Mileage Allowances," or by the
Administrator of General Services, or the President (or his
designee) pursuant to any provisions of such subchapter shall be
used as guidance for travel under Federal awards (41 U.S.C. 420,
"Travel Expenses of Government Contractors").
c. Commercial air_.travel^ Mrfare costs in excess of the
customary standard (coac7r"or equivalent) airfare, are unallowable
except when such accommodations would: require circuitous
routing, require travel during unreasonable hours, excessively
24
-------
prolong travel/, greatly increase the duration of the flight,
result in increased cost that would offset transportation
savings, or offer accommodations not reasonably adequate ror the
medical needs of the traveler. Where a governmental unit can
reasonably demonstrate to the awarding agency either the
nonavailability of customary standard airfare or Federal
Government contract airfare for individual trips or,.on an
overall basis, that it is.the .governmental unit's practice to
make routine use of such airfare, specific determinations.of
nonavailability will generally not be questioned by the Federal
Government, unless a pattern of avoidance is detected. However,
in order for airfare costs in excess of the customary standard
commercial airfare to be allowable, e.g., use of first-class
airfare, the governmental unit must justify and document on a
case-by-case basis the applicable condition(s) set forth above.
d. Air travel by other than commercial carrier., cost
of travel by governmental unit-owned, -leased, or -chartered
aircraft, as used in this section, includes the cost of lease,
charter, operation (including personnel costs), maintenance,
depreciation-, interest, insurance, and other related costs. Costs
of travel via governmental unic-owned, -leased, or -chartered
aircraft are unallowable to the extent they exceed the.cost of
allowable commercial air travel, as provided for in subsection c.
42. Underrecovery of costs under Federal agreements. Any excess
costs over the Federal contribution under one award agreement are
unallowable under other award agreements.
25
-------
Circular No. A-87
Attachment c
STATE/LOCAL-WIDE CENTRAL SERVICE COST ALLOCATION PLANS
TABLE OF CONTENTS
A. General
B. Definitions
1. Billed central services
2. Allocated central services
3. Agency or operating agency
C. Scope of the Central Service Cost Allocation Plans
D. Submission Requirements
E. Documentation Requirements for Submitted Plans
1. General
2. Allocated central services
3. Billed services
a. General
b. Internal service funds
c. Self-insurance funds
d. Fringe benefits
4. Required certification
F. Negotiation and Approval of Central Service Plans
G. Other Polici-es
1.
Billed central service activities
2.
Working capital reserves
3.
Carry-forward adjustments of allocated central service
costs
4.
Adjustments of billed central services
5.
Rer:c 5 retention
6.
Appeals
7.
OMB assistance
General.
Most governmental units provide certain services, such
as motor pools, computer centers, purchasing, accounting, etc.,
to operating agencies on a centralized basis. Since federally-
supported awards are performed within the individual operating
agencies, theie needs to be a process whereby these central
service costs can be iden^.^ed and assigned -to benefitted,
activities ,on a reasonable, ar.d consistent basis. The central
service cost allocation plan provides- that process. All costs
and other data used to distribute the costs included in the plan
-------
should be supported by formal accounting and otner records that
will support the propriety of the costs assigned to Federal
awards.
2. Guidelines and illustrations of central service cost
allocation plans are provided in a brochure published by the
Department of Health and Human Services entitled "A Guide for
State; and Local Government Agencies: Cost Principles and
Procedures for Establishing Cost Allocation Plans and Indirect
Cost Rates for Grants and Contracts with the Federal Government.
A copy of this brochure may be obtained from the Superintendent
of Documents/ U.S. Government Printing Office.
B. Definitions.
1. "Billed central services" means central services that
are billed to benefitted agencies and/or programs on an
individual fee-for-service or similar basis. Typical examples of
billed central services include computer services, transportation
services, insurance, and fringe benefits.
2. "Allocated central services" means central services
that benefit" operating agencies but are not billed to the
agencies on a fee-for-service or similar basis. These costs are
allocated to benefitted agencies on some reasonable basis.
Examples of such services might include general accounting,
personnel administration, purchasing, etc.
3. "Agency or operating agency" means an organizational
unit or sub-division within a governmental unit that is
responsible for the performance or administration of awards or
activities of the governmental unit.
C. Scope of the Central Service Cost Allocation Plans. The
central service cost allocation plan will include all central
service costs that will be claimed (either as a billed or an
allocated cost) under Federal awards and will be documented as
described in section E. Costs of central services omitted from
the plan will not be reimbursed.
D. Submission Requirements.
1. Each State will submit a plan to the Department of
Health and Human Services for each year in which it claims
central service costs under Federal awards. The plan should
include (a) a projection of the next year's allocated central
service cost (based either on actual costs for the most recently
completed year or the budget projection for the coming year), and
(b) a reconciliation of actual allocated central service costs to
the estimated costs used for ather-^ the cost-©ecently completed
year or the year immediately preceding the most recently
completed year.
2
-------
2. 'E'ach'^liSSlal^go^nuiient - that-.has ^bjs^^es.imatedlais^'^
"major local:rgov$rim£tt£"fby the. Office. oftttanagement;?antiijiudget?
(OMB) is also .re^ired^to sxibmit a -plan,
annually* . Olffl periodically lists, major locaii^goyierxmen^
Federal Reqistfergjf *
3.' All other ideal governments claimiiig^central .service
costs must develop'a plan-in accordance with'jthe ..requirements
described in this Circular and maintain thejsplaniand related
supporting documentation for audit. These ^lovcal governments are
not required to ;submi"t their plans for Jeder^al ; approval unless
they are'specifically ^requested to do so byi£he.cognizant.agency.
Where a local, government only receives funds/as a sub-recipient,'
the primary recipient will be responsible, for. negotiating
indirect cost rates and/or monitoring the sub-recipient's plan.
4. Ail central service cost allocation plans will be
prepared and, when required, F'ifcjmitted within six months, prior to
the beginning of each of the governmental.unit's fiscal years in
which it proposes to claim central service costs. Extensions may
be granted by the cognizant agency on a case-by-case basis.
E. Documentation Requirements for Submitted Plans. The
documentation requirements described in this section may be
modified, expanded, or reduced by the cognizant agency on a case-
by-case basis. For example, the requirements may be reduced for
those central services which have little or no impact on Federal
awards. Conversely, if a review of a' plan indicates that certain
additional information is needed, and will likely be needed in
future years, it may be routinely requested in future plan
submissions. Items marked with an asterisk (*) should be
submitted only once'; subsequent plans should merely indicate any
changes since the last plan.
1. -General. All proposed plans must be accompanied by the
following: an organization chart sufficiently detailed to show
operations including the~central service activities of the
State/local government whether or not they are shown as
ber fiting from1central service functions; a copy of the
Comprehensive Annual Financial Report (or a copy of the Executive
Budget if budgeted costs are being proposed) to support the
allowable costs of each central service activity included in the
plan; and, a certification (see subsection 4.) that the plan was
prepared in accordance with this Circular, contains only
allowable costs, and was prepared in a manner that treated
Similar costs consistently among the variouc Federal awards and
between Federal and non-Federal awards/activities.
2. Allocated central services. For each allocated central
s'e'rvice, Ihe f?an musk^also'-^nVudej the-following: a brief
description of the service*, an identification of the unit-
rendering the service and the operating agencies receiving the
3
-------
service, the items of expense included in the cost of the
service, the method used to distribute the cost of the: service to
benefitted agencies, and a summary schedule showing the.
allocation of each service to the specific benefitted agencies.
If any self-insurance funds or fringe benefits costs are created
as allocated (rather than billed) central services,, documentation
discussed in subsections 3.ib. and c. shall also be included.
3. Billed services.
a. General. The information described below shall be
provided for all billed central services, including internal
service funds, self-insurance funds, and fringe benefit funds.
b. Internal.service funds.
(1) For each internal service fund or similar
activity with an operating budget of $5 million or more, the plan
shall include: a brief description of each service; a balance
sheet for each fund based on individual accounts contained in the
governmental*, unit1 s accounting system; a revenue/expenses
statement, with revenues broken out by source, e.g.,- regular
billings, interest earned, etc.; a listing of all non-operating
transfers (as defined-by Generally Accepted Accounting Principles
(GAAP)) into and out of the fund; a description of the procedures
(methodology) used to charge the costs of each service to users,
including how billing rates are determined; a schedule of current
rates; and, a schedule comparing total revenues (including
imputed revenues) generated by the service to the allowable costs
of the service, as determined under this Circular, with an
explanation of how variances will be handled.
(2) Revenues shall consist of all revenues
generated by the service, including unbilled and uncollected
revenues. If some users were not billed for the services (or
were not billed-at the full rate for that class of users), a
schedule showing the full imputed revenues associated with these
users shall be provided. Expenses shall be broken out by object
cost categories (e.g., salaries, supplies, etc.).
c. Self-insurance funds. For each self-insurance
fund, the plan shall include: the fund balance sheet; a
statement of revenue and expenses including a summary of billings
and claims paid by agency; a listing of all non-operating
transfers into and out of the fund; the type(s) of risk(s)
cohered by the fund (e.g., automobile liability, workers'
compensation, etc.); an explanation of how the level of fund
contributions are determined, including a copy of the current
actuarial report (with the actuarial assumptions used) if the
contribution® are -determined,on .an. actuarial basis; and, jl
description of the procedures used to charge or allocate fund
contributions to benefitted activities. Reserve levels in excess
4
-------
of claims (1) submitted and adjudicated but not paid* (2)
submitted but not acgud'icated, and (3) incurred .but not submitted
must be identified and explained.
d. Fringe benefits. For, fringe benefit costs, the
pilan shall include: a listing of fringe benefits provided to
covered employees/ and the overall annual cost of each type of
benefit; current fringe benefit policies*; and procedures used to
charge or allocate the costs of the benefits to benefitted
activities. In addition; for pension and post-retirement health
insurance plans, the following information shall be-provided: the
governmental unit's funding policies, e.g., legislative bills,
trust agreements, or State-mandated contribution rules, if
different from actuarially determined rates; the pension plan's
costs accrued for the year; the amount funded, and date(s) of
funding; a copy of the current actuarial report (including the
actuarial assumptions); the plan trustee's report; and, a
schedule from the activity showing the value of the interest cost
associated with late funding.
4. Required certification. Each central service cost
allocation plan will be accompanied by a certification in the
following form:
5
-------
CERTIFICATE OF COST ALLOCATION PLAN
This is to certify tnat I have -reviewed the cost allocation
plan submitted herewith .and to the best of my knowledge and
belief:
(1) All costs included in this proposal [identify date] to
establish cost allocations or billings for [identify period
-covered by plan] are allowable ip accordance with the
"requirements of OMB Circular A-87, "Cost Principles for State and
Local Governments," and the Federal award(s) to which they apply.
Unallowable costs have.been adjusted for in allocating costs as
indicated in the cost allocation plan.
(2) Ali costs included in this proposal are properly
allocable to Federal awards on the basis of a beneficial or
causal relationship between the expenses incurred and the awards
to which they are allocated in accordance with applicable
requirements. Further# the same costs that have been treated as
indirect costs have not been claimed as direct costs. Similar
types of costs have been accounted for consistently.
I declare that the foregoing is true and correct
Governmental Unit":
Signature:
Name of Official:
Title:
Date of Execution:
F. Negotiation and Approval of Central Service Plans.
1. All proposed central service cost allocation plans that
are recruired to be submitted will be reviewed, negotiated, and
rcvea by r.; . I'ederal cognizant agency c i a timely basis. The
cognizant agency will review the proposal within six months of
receipt of the proposal and either negotiate/approve the proposal
or advise the governmental unit of the additional, documentation
needed to support/evaluate the proposed plan or the changes
required to" make the proposal acceptable. Once an agreement with
tnc 7Dvernmental unit has been reached, the agreement will be
accepted and used by all Federal agencies, unless prohibited or
limited by statute. Where a Federal funding agency has reason to
believe that special operating factors affecting its awards
necessitate special 'consideration, the funding agency will, prior
to the time the plans are negotiated, notify the cognizant -
agency.
6
-------
2. The results Of eacn negotiation shall be forma'l'ifced in
3 written agreement oe;tween .the cognizant agency ano t**c
governmental unit. This agreement will be sud;ject to re^openmg
if the agreement is subsequently found to violate a stacutfe or
the information upon which the plan.was negotiated is later founc
to be. materially incomplete or inaccurate. The results of cne
negotiation shall be made available to all Federal agencies, cor
their use.
3. Negotiated cost allocation plans based on a proposal
later found to have included costs that: (a) are unallowable fi)
as specified by law or regulation, (ii) .as identified in
Attachment B of this Circular, or (iii) by the terns and
conditions of Federal awards, or (b) are unallowable because they
are clearly not allocable to Federal awards, shall be adjusted,
or a refund shall be made at the option of the Federal cognizant
agency. These adjustments or refunds are designed to correct the
plans and -do not constitute a reopening of the negotiation.
G. Other Policies.
Billed central service activities. Each billed central
service activity must separately account for all revenues
(including imputed revenues) generated by the service, expenses
incurred to furnish the service, and profit/loss.
2. Working capital reserves. Internal service funds are
dependent upon a reasonable level of working capital reserve to
operate- from one billing cycle to the next. Charges by an
internal service activity to provide for the establishment and
maintenance of a reasonable level of working capital reserve, in
addition to the full recovery of costs, are allowable. A working
capital reserve as part of retained earnings of up to 60 days
cash expenses for normal operating purposes is considered
reasonable. A working capital reserve exceeding 60 days may be
approved by the.cognizant Federal agency in exceptional cases.
3. Carry-forward adjustments of allocated central service
costs. Allocated central service costs are usually negotiated
and approved for c futu*- r' -cal year on a "fixed with carry-
forward" basis, tinder tnis procedure, the fixed amounts for the
future year covered by agreement are not subject to adjustment
for that year. However, when the actual costs of the year
involved become known, the differences between the fixed amounts
previously approved and the actual costs will be carried forward
rnd used as an adjustment to the fixed amounts established for a
later year. This "carry-forward" procedure applies to all
central services whose costs were fixed in the approved plan.
However, a carry-forward adjustment is not permitted, for a^
central service activity than.'was not included in the approved
plan, or for unallowable costs thaw must be reimbursed
immediately.
7
-------
4. Adjustments of billed central services. Billing rates
used to charge Federal awards shall be based on the estimated
costs of providing, the services, including an estimate of the
allocable central service costs.
A comparison of the revenue generated by each billted service
(including total revenues whether or not billed or collected) to
the actual allowable costs of the service will be made at least
annually/ and an adjustment will be made for the difference
between the revenue and the allowable costs. These adjustments
will be made througn one of the following adjustment methods:
(a) a cash refund to the Federal Government for the Federal share
of the adjustment, (b) credits to the amounts charged to the
individual programs, (c) adjustments to future billing rates, or
(d) adjustments to allocated central service costs. Adjustments
to allocated central services will not.be permitted where the
total amount of the adjustment'for a particular service (Federal
share and non-Federal) share exceeds $500,000.
5. Records retention. All central service cost allocation
plans and related documentation used as a basis for claiming
costs under Federal awards must be retained for audit in
accordance with the records retention requirements contained in
the Common Rule.
6. Appeals. If a dispute arises in the negotiation of a
plan between the cognizant agency and the governmental unit, the
dispute shall be resolved in accordance with the appeals
procedures of the cognizant agency.
1. OMB assistance. To the extent that problems are
encountered among the Federal agencies and/or governmental units
In connection with the negotiation and approval process, OMB will
Lend assistance1, as required, to resolve such problems in a
:imely manner.
8
-------
Circular No. A-87
Attachment D
PUBLIC ASSISTANCE COST ALLOCATION PLANS
TABLE OF CONTENTS
A. General
B. Definitions
1. State public, assistance agency
2. State public assistance agency costs
C. Policy
D. Submission, Documentation, and Approval of Public Assistance
Cost Allocation Plans
E. Review of Implementation of Approved Plans
A. General. Federally-financed programs administered by State
public assistance agencies are funded predominately by the
Department of Health and Human Services (HHS). In support of its
stewardship requirements, HHS has published requirements for the
development, documentation, submission, negotiation, and approval
of public assistance cost, allocation plans in Subpart E of 45 CFR
Part 95. All administrative costs (direct and indirect) are
normally charged to Federal awards by implementing the public
assistance cost allocation plan. This Attachment extends these
requirements to all Federal agencies whose programs are
administered by a Sttate public assistance agency. Major
federally-financed programs typically administered by State
public assistance agencies include: Aid to Families with
Dependent Children, Medicaid, Food Stamps, Child Support
Enforcement, Adoption Assistance and Foster Care, and Social
Services Block Grant.
B. Definitions.
1. "State public assistance agency" means a State agency
administering or supervising the administration of one or more
public assistance programs operated by the State as identified in
Subpart E of 45 CFR Part 95. For the purpose of this Attachment,
these programs include all programs administered by the State
puuxic assistance agency.
2. "State public assistance agency costs" means all costs
incurred by, or allocable to, the State public assistance agency,
except expenditures- for fin^ijcial ^assistance,. medical vendor
payments, food stamps, and payments tor services*and goods'
provided directly to program recipients.
-------
C. Policy? St£te public assistance agencies will develop,
document and implement",, and trie Federal Government will review,
negotiate, ana approve, public assistance cost allocation plans
in accordance with Subpart E of 45 CFR Part 95. The plan, will
include all programs administered by the State public assistance
agency. wtiere a letter of approval or disapproval is transmitted
to a Statfc pub!Lc assistance agency in accordance with Subpart E,
the letter will apply to all Federal agencies and programs. The
remaining sections of this Attachment (except for the requirement
for certification) summarize the provisions of Subpart E of 45
CFR Part 95.
D. Submission, Documentation, and Approval of Public Assistance
Cost Allocation Plans. ~~
1. State public assistance agencies are required to
promptly submit amendments to the cost allocation plan to HHS for
review and approval.
2. Under the coordination process outlined in subsection
E. affected Federal agencies will review all new plans and plan
amendments .and provide comments, as appropriate, to HHS. The
effective date of the plan or "plan amendment will be.the first
day of the quarter following the -submission of the plan or
amendment, unless another date is specifically approved by HHS.
HHS, as the cognizant agency acting on behalf of all affected
Federal agencies, will, as necessary, conduct negotiations with
the State public assistance agency and will inform the State
agency of the action taken on the plan or plan amendment.
E. Review of Implementation of Approved Plans.
1. Since puDlic assistance cost allocation plans are of a
narrative nature, the review during the plan approval process
consists Qf evaluating the appropriateness of the proposed
groupings-of costs (cost centers) and the related allocation
bases. As such, the Federal Government needs some assurance that
the cost allocation plan has been implemented as approved. This
is accomplished by reviews by the funding agencies, single
audits, or audits conducted by the cocnizant audit agency.
2. Where inappropriate charges affecting more than one
funding agency are identified, the cognizant HHS cost negotiation
office will be advised and will take the lead in resolving the
issue(s) as provided for in Subpart E of 45 CFR Part 95.
3. If a dispute arises in the negotiation of a plan or
from a disallowance involving two or more funding agencies, the
dispute shall 'be resolved in accordance with the appeals
procedures set out in 45^CFR Part 75. Disputes involving only one
funding agency wiil oe resw-vea in accordance ~with the funding
agency's appeal process.
2
-------
* Trv »-he extent that "problems are encountered among the
_ aaencies Ld/or governmental units in connection with the
Federal agencies « / * the office ©f Management anri
retired, "to resolSe such
UC^VWA»to*w«< ¦ — #
Budget wiiL lend assistance,
problems in a timely manner.
«— -
F. Claims developed under approved cost allocation plans will
be based on allowable costs as identified in this Circular.
Where unallowable costs have been claimed and reimbursed, they
will*be refunded to the program that reimbursed the unallowable
cost using one of the following methods: (a) a cash refund, (b)
offset to a subsequent claim, or (c) credits to the amounts'
charged to individual awards.
3
-------
Circular No. A-87
Attachment E
.STATE AND LOCAL INDIRECT COST RATE PROPOSALS
TABLE OF-CONTENTS
A. General
B. Definitions
1. Indirect cost rate proposal
2. Indirect cost rate
3. Indirect cost pool
4. Base
5. Predetermined rate
6. Fixed rate
7. Provisional rate
6. Final rate
9. Base period
C. Allocation of Indirect Costs and Determination of Indirect
Cost Rates
1. General
2. Simplified method
3. Multiple allocation base method
4. Special indirect cost rates
D. Submission and Documentation of Proposals
1. Submission of indirect cost rate proposals
2. Documentation of proposals
3. Required certification
E. Negotiation and Approval of Rates
F. Other_Policies
1. Fringe benefit rates
2. Billed services provided by the grantee agency
3. Indirect cost allocations not using rates
4. Appeals
5. Collection? c- i ._llowable costs and erroneous payments
6. OMB assistance
A. General.
1. Indirect costs are those that have been incurred for
common or joint purposes. These costs benefit more than one c~~t
objective and cannot be readily identified with a particular
final cost objective without effort disproportionate to the
results achieved After .direct costs have been determined and
assigned directly to Federal rwards and other activities as
appropriate, indirect costs are those remaining to be allocated
to benefitted cost objectives. A cost may not be allocated to a
Federal award as an indirect cost if any other cost incurred for
-------
the same purpose, in l'ike circumstanqes, has been assigned to a
Federal award as a direct cost.
2* Indirect costs include (a) the indirect costs
originating in each department or agency of the governmental unit
carrying out Federal awards and (b) the costs of central
governmental services distributed through the central service
cost allocation plan (as described in Attachment C) and not
Otherwise treated as direct cos.ts.
3. Indirect costs are normally charged to Federal awards
by tfte use of an indirect cost rate. A.separate indirect cost
rate(s) is usually necessary for each department or agency of the
governmental unit claiming indirect costs under Federal awards.
Guidelines and illustrations of indirect cost proposals are
provided in a brochure published by the Department of Health and
Human Services entitled "A Guide for State and Local Government
Agencies: Cost Principles and Procedures for Establishing Cost
Allocation Plans and Indirect Cost Rates for Grants and Contracts
with the Federal Goverrunent." A copy of this brochure may. be
obtained from the Superintendent of Documents# U.S. Government
Printing Office.
4. Because of the diverse characteristics and accounting
practices of governmental units, the types of costs which may be
classified as indirect costs cannot be specified in all
situations.. However, typical examples of indirect costs may
include certain State/local-wide central service costs, general
administration of the grantee department or agency, accounting
and personnel services performed within the grantee department or
agency, depreciation or use allowances on buildings and
equipment, the costs of operating and maintaining facilities,
etc.
5. This Attachment does not apply to State public
assistance agencies. These agencies should refer instead to
Attachment D.
B. Definitions.
1. "Indirect cost rate proposal" means the documentation
prepared by a governmental unit or subdivision thereof to
substantiate its request for the establishment of an indirect
cost rate.
2. "indirect c :t rar^" is a device for determining in a
reasonable manner the proportion of indirect costs each program
should bear. It is the ratio (expressed as a percentage) of the
indirect costs to a direct cost base.
3. "Indirect cost pool" is the accumulated costs that
jointly benefit two or more programs or other cost objectives.
2
-------
4. "Base" means the-accumulated direct costs (normally
either total direct salaries and wages or total, direct costs
exclusive of any extraordinary or distorting expenditures) used
to distribute indirect costs to individual Federal awards. The
direct cost base selected should result in each award bearing a
fair.share of the indirect costs in reasonable relation to the
benefits received from the costs.
5. "Predetermined rate" means an indirect cost rate,
applicable to a specified current or futiire period; usually the
governmental unit's fiscal year. This rate is based on an
estimate of the costs to be incurred during the period. Except
under very unusual circumstances, a predetermined rate is not
subject to adjustment. {Because of legal constraints,
predetermined rates are not permitted for Federal contracts; they
may, however, be-used for grants or cooperative agreements.)
Predetermined rates may not be used by governmental units that
have .not submitted and negotiated the rate with the cognizant
agency. In view of the potential advantages offered by this
procedure, negotiation of predetermined rates for indirect costs
for a period of two to four years should be the norm in those
situations where the cost experience and other pertinent facts
available are deemed sufficient to enable the parties involved to
reach an informed judgment as to the probable level of"indirect
costs during the ensuing accounting periods.
6. "Fixed rate" means an indirect cost rate which has the
same characteristics as a predetermined rate, except that the
difference between the estimated costs and the actual, allowable
costs of the period .covered by the rate is carried forward as an
adjustment to the rate computation of a subsequent period.
7. "Provisional rate" means a temporary indirect cost rate
applicable to a specified period which is used for funding,
interim reimbursement, and reporting indirect costs on Federal
awards pending the establishment of a "final" rate for that
period.
8. "Final rate" means an indirect cost rate applicable to
l specified past period which is based on the actual allowable
costs of the period. A final audited rate is not subject to
adjustment.
9. "Base period" for the allocation of indirect costs is
the period in which such costs are incurred and accumulated for
allocation to activities performed in that period. The base
period normally should coincide with the governmental unit's
fiscal year, but in any event, shall be so selected as to avoid
inequities in the allocation of costs.
3
-------
C. Allocation of Indirect Costs and Determination ot indirect
Cost Rates. '
1.. General.
a. Where a governmental unit's department or agency
has only one major function, or where all its major functions
benefit from the indirect costs to approximately the same degree,
the allocation of indirect costs and the computation of an
indirect cost rate may be accomplished through simplified
allocation procedures as described in subsection 2.
b. Where a governmental unit's department or agency
has several major functions which benefit from its indirect costs
in varying degrees, the allocation of indirect costs may require
the accumulation of such costs into separate cost groupings which
then are allocated individually to benefitted functions by means
of a base which best measures the. relative degree of benefit.
The indirect costs allocated to each function are then
distributed to individual awards and other activities included in
that function by means of an indirect cost rate(s).
c. Specific methods for allocating indirect costs and
computing indirect cost rates along with the conditions under
which each method should be used are described in subsections 2,
3 and 4.
2. Simplified method.
a. Where a grantee agency's major functions benefit
from its indirect costs to approximately the same degree, the
allocation of indirect costs may be accomplished by (1)
classifying the grantee agency's total costs for the base period
as either direct or indirect, and (2) dividing the total
allowable indirect costs (net of applicable credits) by an
equitable -distribution base. The result of this p-ocess is an
indirect cost rate which is used to distribute indirect costs to
individual Federal awards. The rate should be expressed as the
percentage which the total amount of allowable indirect costs
baars to the base selected. This method should ^lso be used
where a governmental unit's department or agency has only one
major function encompassing a number of individual projects or
activities, and may be used where the level of Federal awards to
that department or agency is relatively small.
b. Both the direct costs and the indirect costs shall
exclude capital expenditures and unallowable costs. However,
unallowable costs must be included in the direct costs if they
represent activities to which indirect costs are properly
allocable.
A
-------
c. The)distribution base may be {1) total direct
costs (excluding capital expenditures and other distorting items,
such as pass-through funds, major subcontracts, etc.), (2) direct
salaries and wages, or (3) another base which results in an
equitable distribution.
3. Multiple allocation base method.
a. Where a grantee agency's iridirect costs benefit
its 'major functions in varying degrees, such costs shall be
accumulated into separate cost groupings. Each grouping shall
then be allocated individually to benefitted functions by means
of a base which best measures the relative benefitis.
b. The cost groupings should be established so as to
permit the allocation of each grouping on the basis of benefits
provided to the major functions. Each grouping should constitute
a pool of expenses that are of like character in terms of the
functions they benefit and in terms of the allocation base which
best measures the relative benefits provided to each function.
The niCTber of separate groupings should be held within practical
limits, taking into consideration the materiality of the amounts
involved and the degree of precision needed.
c. Actual conditions must be taken into account in
selecting the base to be used in allocating the expenses in each
grouping to benefitted functions. When an allocation can be made
by assignment of a cost grouping directly to the function
benefitted, the allocation shall be made in that manner. When
the expenses in a grouping are more general in nature, the
allocation should be made through the use of a selected base
which produces results that are equitable to both the Federal
Government and the governmental unit. In general, any cost
element or jrelated factor associated with the governmental unit's"
activities is potentially adaptable for use as an allocation base
provided that: (1) it can readily be expressed in terms of
dollars or other quantitative measures (total direct costs,
direct salaries and wages, staff hours applied, square feet used,
hours of usage, number of documents processed, population,served,
and the like), and (2) it is common to the benefitted functions
during the base period.
d. Except where a special indirect cost rate(s) is
required in accordance with subsection 4, the separate groupings
of indirect costs allocated to each major function shall be
aggregated and treated as a common pool for that function. The
costs in the common pool shall then be distributed to individual
Federal awards included in that function by use of a single
indirect cost rate.
e. The distnmition base used^in computing the
indirect cost rate for each function may be (1) total direct
5
-------
costs {excluding capital expenditures and other distorting items
such as pass-through funds, major subcontracts, ecc.r, (2) direct
salaries and wages, or (3) another base which results in an
equitable distribution. An indirect cost rate should be
developed for each separate indirect cost pool developed. The
rate in each case should be stated as the percentage relationship
between the particular indirect cost pool and the distribution
base identified with that pool.
4. Special indirect cost rates.
a. In some instances, a single indirect cost rate for
all activities of a grantee department or agency or for each
major function of the agency may not be appropriate. It may not
take into account those different factors which may substantially
affect the indirect costs applicable to a particular program or
group of programs. The factors may include the physical location
of the work, the level of administrative support required, the
nature of the facilities or other resources employed, the
organizational arrangements used, or any combination thereof.
When a particular award is carried out in an environment which
appears to generate a significantly different' level of indirect
costs, provisions should be made for a separate indirect cost
pool applicable to that award. The separate indirect cost pool
should be. developed during the course of the.regular allocation
process, and the separate indirect cost rate resulting therefrom
should be used, provided that: (1) the rate differs
significantly from the rate which would have been developed under
subsections 2. and 3., and (2) the award to which the rate would
apply is nateriai ir. amount.
b. Although this Circular adopts the concept of the
full allocation of indirect costs, there are some Federal
statutes which restrict the reimbursement of certain indirect
costs. Where such restrictions exist, it may be necessary to
develop a -special rate for the affected award. Where a
"restricted rate" is required, the procedure for developing a
non-restricted rate will be used except for the additional step
of the elimination from the indirect cost pool those costs for
•¦•hicl" the 1- prohibits reimbursement.
D. Submission and Documentation of Proposals.
1. Submission of indirect cost rate proposals.
a. All departments or agencies of the governmental
uiixc desiring to claim indirect costs under Federal awards must
prepare an indirect cost rate proposal and related documentation
to support those costs. The proposal and related documentation
must'be retained_for kudit in' accordance with"~the records
retention requirements coniaiiied in the Common Rule.
6
-------
b. A governmental unit for which a. cognizant agency
assignment has been specifically designated must submit its
indirect cost rate proposal to its cognizant agency. The Office
of Management and Budget (OMB) will periodically publish lists of
governmental units identifying the appropriate Federal cognizant
agencies. The cognizant agency for all governmental units or
agencies not.identified by OMB will be determined based on the
Federal agency providing the largest amount of Federal funds, in
these cases, a governmental unit must develop an indirect cost,
proposal in accordance with the requirements of this Circular and
maintain the proposal and related supporting documentation for
audit. These governmental units are not required to submit their
proposals unless they are specifically requested to do so by the
cognizant agency. Where a local government only receives funds
as a sub-recipient, the primary recipient will be responsible for
negotiating and/or monitoring .the sub-recipient's plan.
c. Each Indian tribal government desiring
reimbursement of indirect costs must submit its indirect cost
proposal to the Department of the Interior (its cognizant Federal
agency).
d. Indirect cost proposals must be developed (and,
when required, submitted) within six months after the close of
the governmental unit's fiscal year, unless an exception is
approved by the cognizant Federal agency. If the proposed
central service cost allocation plan for the same period has not
been approved by that time, the indirect cost proposal may be
prepared including an amount for central services that is based
on the latest federally-approved central service cost allocation
plan. The difference between these central service amounts and
the amounts ultimately approved will be compensated for by an
adjustment in a subsequent period.
2. Documentation of proposals. The following shall be
Included with each indirect cost proposal:
a. The rates proposed, including subsidiary work
sheets and other relevant data, cross referenced and reconciled
:c the financial data noted in subsection Allocated central
service costs will be supported by the summary table included in
.he approved central service cost allocation plan. This summary
;able is not required to be submitted with the indirect cost
proposal if the central service cost allocation plan for the same
fiscal year has been approved by the cognizant agency and is
3 "lilable to the funding agency.
b. A copy of the financial data (financial
statements, comprehensive annual financial report, executive
budget-*, accounting reports, c.) upon which the rate is based.
Adjustments resulting from the use of unaudited data will be
7
-------
recognized, where appropriate, by the Federal cognizant agency in
a subsequent proposal.
c. The approximate amount of direct base costs
incurred under Federal awards. These costs should be broken out
between salaries, and wages and other direct costs.
d. A chart showing the organizational structure of
the agency during the period for which the proposal applies,
along with a•functional statement(s) noting the dutie? and/or
responsibilities of all units that comprise the. agency. (Once
this is submitted, only revisions need be submitted with
subsequent proposals.)
3-. Required certification. Each indirect cost rate
proposal shall be accompanied by a certification in the following
form:
8
-------
CERTIFICATE OF INDIRECT COSTS
This is to certify that I have reviewed the indirect cost
rate proposal submitted herewith and to the best of my knowledge
and belief:
(1) All costs included in this proposal [identify
date] to establish billing Or final indirect costs rates for
[identify period covered by rate] are allowable in ^accordance
with- the requirements of the Federal award(s) to which they apply
and OMB Circular A-87, "Cost Principles for State and Local
Governments." Unallowable costs have been adjusted for in
allocating costs as indicated in the cost allocation plan.
(2) All costs included in this proposal are properly
allocable to Federal awards on the basis of a beneficial or
causal relationship between the expenses incurred and the
agreements to which they are allocated in accordance with
applicable requirements. Further, the same costs that have been
treated as indirect costs have not been claimed as direct costs.
Similar types of costs have been accounted for consistently and
the Federal Government will be notified of any accounting changes
that would a'ffect the predetermined rate;
I declare that the foregoing is true and correct.
Governmental Unit:
Signature:
Name of Official:
Title:
Date of Execution:
E. Negotiation and Approval of Rates.
1. Indirect cost rates will be reviewed, negotiated, and
approved by the cognizant Federal agency on a timely basis. Once
a rate has been agreed upon, it will be accepted and used by all
Federal agencies unless prohibited or limited by statute. Where
a Federal funding agency has reason to believe that special
operating factors affecting its awards necessitate special
'.^direct cost rates, the funding agency will, prior to the time
the rates are negotiated, notify the cognizant Federal agency.
2. The use of predetermined rates, if allowed, is
encouraged where the cognizant agency has r£asonabl,e assurance
baseH'on past experience ana reliable projection of the grantee
agency's costs, that the rate is not likely to exceed a rate
9
-------
based on actual costs. Long-term agreements utilizing
predetermined rates extending over two or more years are
encouraged# where appropriate.
3. The results of each negotiation shall be formalized in
a written agreement between the cognizant agency and the
governmental unit. This agreement will be subject to re-opening
if the agreement is subsequently found to violate a statute, or
the information upon which the plan was negotiated is later found
to be materially incomplete or inaccurate. The agreed upon rates
shall be made available to all Federal agencies for their use.
4. Refunds shall be made if proposals are later found to
have included costs that (a) are unallowable (i) as specified by
law or regulation/ (ii).as identified in Attachment B of this
Circular, or.(iii) by the terms and conditions of Federal awards,
or (b) are unallowable because they are clearly not allocable to'
Federal awards. These adjustments or refunds will be made
regardless of the type of rate negotiated (predetermined, final,
fixed, or provisional).
F. Other Policies.
•1.. Fringe benefit rates. If overall fringe benefit rates
are not approved for the governmental unit as part of the central
service cost allocation plan, these.rates will be reviewed,
negotiated and approved for individual grantee agencies during
the indirect cost negotiation process. In these cases, a
proposed fringe benefit rate computation should accompany the
indirect cost proposal. If fringe benefit rates are not used at
the grantee agency level (i.e., the agency specifically
identifies fringe benefit costs to individual employees), the
governmental unit should so advise the cognizant agency.
2. Billed services provided by the grantee agency. In
some cases, governmental units provide and bill for services
similar to those covered by central service cost allocation plans
(e.g., computer centers). Where this occurs, the governmental
unit should be guided by the requirements in Attachment C
relating to the development of billin; rates and documentation
requirements, and should advise the cognizant agency of any
billed services. Reviews of these types of services (including
reviews of costing/billing methodology, profits or losses, etc.)
will be made on a case-by-case basis as warranted by the
circumstances involved.
3. Indirect cost allocations not using rates. In certain
situations, a governmental unit, because of the nature of its
awards, may be required to develop a cost allocation plan that
distributes indirect 'tend, ii some cases, direct) costs to the
specific funding sources. In these cases, a narrative cost
allocation methodology should be developed, documented,
10
-------
maintained for audit/ or submitted, as appropriate, to the
cognizant agency for review, negotiation, and approval.
4. Appeals. If a dispute arises in a negotiation of an
indirect cost rate (or other rate) between the cognizant agency
and the. governmental unit/ the dispute shall be resolved, in
accordance with the appeals procedures of the cognizant agency.
5. Collection of unallowable costs and erroneous payments.
Costs specifically identified as "unallowable and charged to
Federal.awards either directly or indirectly will be refunded
(including interest chargeable in accordance with applicable
Federal agency regulations).
6. OMB assistance. To the extent that problems are
encountered among the Federal agencies and/or governmental units
in connection with the negotiation and approval process, OMB will
lend assistance, as required, to resolve such problems in a
timely manner.
LI
-------
-------
JLANO ftCQt4IS(Ti*»
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 4
STREt1 c., l
ATLAMT-' C rOPClA. 3C36:
3-1-%
Mr. David Harding
Nonpoint Source Coordinator
Water Quality Section
North Carolina Department of Environment, Health
and Natural Resources
P. 0. Box. 29535
Raleigh, North Carolina 27626-0535
SUBJ: FY 95 Section 319(h) Grant # C9994657-95
Project # 14, Town of Waynesville Watershed Project
Dear Mr. Harding:
I have received your fax transmittal of February 21, 1996,
related to the referenced project. Mr. A. Lee Galloway, Town
Manager for the Town of Waynesville, in his letter of February
16, 1996 to Mr. Kent Wiggins of NCDEM, has raised several
questions regarding EPA Region 4's grant conditions for this
project.
We have completed our review of the changes proposed by Mr.
Galloway. Our comments are listed below. Our numbers are
numbered to match Mr. Galloway's comments/questions.
Addendum #1
1. We have just received the referenced statute, and have
it under review at this time.
2. The measures proposed for evaluation are acceptable;
however, we need to see a more specific monitoring
plan, complete with quality assurance and quality
assurance measures, before we can finally approve the
first bullet--monitoring of siltation levels.
Also, the addendum states that these measures could be
used. The workplan should be revised to include a
specific commitment to measure and report on the five
success measures that are listed in item 2.
3. The explanation provided for item 3 is very helpful,
and satisfies our concerns on the question of staffing.
-------
2
Addendum #2
3A. We will accept one appraisal, instead of the three
called for in the grant condition, assuming that the
appraiser has met state standards, including licensing
or certification requirements for land appraisers.
3D. Deed Language
In light of the fact that the state will not be a title
.holder or co-title holder, we have revised our
requirements related to the deed. The changes we are
requesting are not more restrictive than those we
originally proposed; instead, these are intended to
provide a clearer description of the restrictions, for
the benefit all parties associated with this
transaction. The revised language is as follows:
WHEREAS, federal grant funds have been used to
purchase, the property under the terms of Grant
number C9994657-95-2, and the United States,
through its Environmental Protection Agency (EPA),
and the State of North Carolina, have agreed as
between themselves that, since the United States
has provided 44.5% of the purchase price of this
land, any subsequent sale of the land to a
nonconforming user of the land, will require that
the United States receive 44.5% of the fair market
value at the time of the subsequent sale to
satisfy its lien. A "nonconforming user" as
described above means a subsequent purchaser who
uses the property in any manner inconsistent with
the terms of this grant, § 319(h) of the Clean
Water Act, 33 U.S.C. § 1329(h), and any agreements
or contracts entered into by North Carolina to
preserve the land for maximum nonpoint source
benefits. The United States, through the EPA,
shall be notified in writing of any impending sale
at least 45¦ days before the closure of such sale.
¦ An alternative to this restrictive language is for the
State to retain title and enter into an Memorandum of
Understanding with the Town of Waynesville to manage
the land consistent with the terms of the grant and the
NPS program.
-------
3
Also, a Federal lien must be filed contemporaneously
with the deed, in the appropriate NC County Recorders
Deed book, that retains a 44.5% interest in the fair
market value, or $250,000, the amount of the federal
grant for this project, whichever is higher. This will
be granted from the State to EPA and will be binding on
subsequent purchasers.
Federal Share of Transaction
After a review of 40 CFR 31.31, we agree that the
federal share of this particular project is 44.5%, even
though the federal share of the entire grant is 60%.
We will amend the grant to make this change.
3E. Same as Comment #1, Addendum #1
Proposed Workplan Amendments
1. Scope of Project
This request is approved. The project closeout
documentation should include a copy of the executed
easement for our records. Also, the final project
report should report on the entire watershed, including
the land covered by conservation easements.
2. Appraisals
This issue was addressed in Item #3C of Addendum #2,
above.
3. We are willing to approve any proposed project period,
as long as the revised timetable is consistent with the
overall grant period, which expires September 30, 1997.
The budget period proposed may actually be too short to
complete the measures of success that are proposed.
General Comment
Because of the large number of changes to the workplan, and
the "poor quality of the original workplan which is in our
official file, we respectfully request that the cooperators
re-write the entire workplan, incorporating all of the
changes that we have agreed upon. This will then become the
official workplan, which will make implementation and
tracking of the project easier for the Town of Waynesville,
the State, and EPA.
-------
4
I hope this adequately responds to the issues that have been
raised. Please do not hesitate to call the grant project
officer, Betty Barton at (404) 347-2126, extension 6588, if you
have questions or require additional information.
Sincerely,
c.
Jb/-E. Stallings Howell, Chief
Wetlands, Oceans and Watersheds Branch
Water Management Division
-------
3S£.
UNiT ED S 1 i Ec £,NV|R,CNMEr jTAL r ROTECTIGN AGENCY
Mr. David Harding, NPS Coordinator
North Carolina Department of Environment,
Health and Natural Resources
Division of Environmental Management
P. 0. Box 29535
Raleigh, North Carolina 27626
SUBJ: FY 95 Section 319 Grant #C9994657-95-2
Project # 12: The Black River Nonpoint Source
Project
Dear Mr. Harding:
I have received the letter from Camilla Herlevich dated
October 17, 1995, regarding the subject project. As I understand
it ~he Mature Conservancy has completed pu: chacc of the tract of
land without having met EPA grant conditions related to this
project. Because EPA's assistance agreement is with the State, I
am directing this correspondence to you rather than Ms.
Herlevich.
EPA Region 4 has completed our review of the information
provided by Ms. Herlevich, and applicable portions of the Code of
Federal Regulations. We have determined that, in order for the
costs that have been incurred to be eligible for reimbursement
under this grant, the following requirements must be met:
1. EPA Region 4 must receive and approve the land
management plan for subject property. Our intent is to
ensure that all needed best management practices are
properly installed and maintained, and that the
property is managed to ensure that the nonpoint source
benefits continue in perpetuity.
2. EPA Region 4 must be provided with a description of how
the public participation requirements were met, and a
summary of public comments. In this situation, public
participation should include public notification of the
site that has been purchased, the proposed use of the
land, and an invitation for public comment.
-------
2
3. EPA must be provided with a copy of the deed with the
following restrictive language:
WHEREAS, federal grant funds have been used
to purchase the property under the terms of
Grant number C9994657-95-2, and the United
States, through its Environmental Protection
Agency (EPA), and the State of North
Carolina, have agreed as between themselves
that, since the United States has provided
60% of the purchase price of this land, any
subsequent sale of the land to a
nonconforming user of the land, will require
that the United States receive 60% of the
fair market value at the time of the
subsequent sale to satisfy its lien. A
"nonconforming user" as described above means
a subsequent purchaser who uses the property
ir. any manner inconsistent with the terms of
this grant, § 319(h) of the Clean Water Act,
33 U.S.C. § 1329(h), and any agreements or
contracts entered into by North Carolina to
preserve the land for maximum nonpoint source
benefits. The United States, through the
EPA, shall be notified in writing of any
impending sale at least 45 days before the
closure of such sale.
We are requiring this language because the State of North
Carolina will not retain title to the property. Although this
language is different from that spelled out in the grant
conditions, the intent is the same. Our revised language will
give property owners and potential buyers a clearer description
of the restriction that applies. An alternative to this is for
the State to retain title and enter into an Memorandum of
Understanding with a non-profit conservancy group to manage the
land consistent with the terms of the grant and the NPS program.
4. A Federal lien must be filed contemporaneously with the
.deed, in the appropriate NC County Recorders Deed book,
that retains a 6 0% interest in the fair market value,
or $250,000, the amount of the federal grant, whichever
is higher. This will be granted from the State to EPA
and will, be binding on subsequent purchasers.
5 . EPA must be provided with a copy of the contract of
sale for this land.
-------
3
6 . EPA must be provided with documentation that the Nature
Conservancy has authority to buy and manage land in the
State of North Carolina. This would most likely be in
the form of a state charter and organizational by-laws.
7. EPA must be provided with a copy of a'letter from DEHNR
to the appropriate state agency for protection of
historical or archaeological sites, describing the
project and pledging that no construction or road
building will occur until such time as the "appropriate
state agency" has a chance to approve it.
8. The State's revised Nonpoint Source Management Program
must be approved by EPA. EPA Region 4 has completed
our initial review of the program, and NCDEM has
received our review comments. David Harding, NPS
Coordinator for NCDEM, has indicated that the State has
rev^wed these comments, and anticipates no difficulty
in addressing them.
Please let me know if you have questions or require
additional information.
Sincerely,
Howell,
£. Stallings Howell, Chief
Wetlands, Oceans and Watersheds Branch
-------
8(JDGCT CHHV6CS
[6] From.: SLankfor 9/10/93 8:42AM (2125 bytes: 32 In)
To- '^Miller
5i :t: Re: Clarafication re: Post-Award Changes in Grant Budget/Project
Forwarded —
F ILinvill 8/18/93 1:04PM (1929 bytes: 32 In)
1 iYancey
cc: SLankfor, GMiller, MGates
Subject: Re: Clarafication re: Post-Award Changes in Grant Budget/Project
i Message Contents
Thanks for the clarification. I'm glad Sharon called. The
least amount of paperwork possible is my preference. A copy
of the request and my response is on the way to Stephanie.
Ira
I took a call yesterday from Sharon Wells with MS DEQ
regarding a request to rebudget $9,000 from Contracts object
class to Personnel and Travel (on their Grant Award No.
X-994299-92, - Alluvial Plains - $25,000).
She indicated MS DEQ had written to you to get EPA's
approval for this transfer and had received an approval
letter from you. She said she had been told MS DEQ would
need to submit a request for a grant amendment containing
revised budget pages to reflect the change.
However, as she pointed out, 40 CFR 31.30(c)(ii) requires
prior approval of the awarding agency when cumulative
transfers among direct cost categories...which exceed or are
expected to exceed 10% of the current total approved,
budget, WHENEVER THE AWARDING AGENCY'S SHARE EXCEEDS
$100,000. Since MS DEQ's award on this grant was only
$25,000, I informed Ms. Wells, that a formal grant amendment
would not be required for this transfer of money and MS DEQ
would not need to submit anything further.
Please send the Grants Specialist (Stephanie Lankford) a
copy of the incoming request from MS DEQ and your response
approving this action for the-official grant file.
-------
"P#0£«AM INCOME
[34] From: Mark Nuhfer 6/13/96 3:46PM (1844 bytes: 32 In)
To: Betty Barton, Steven Blackburn, Ed Decker, Howard Marshall, Glenda Miller,
Mark Nuhfer, Ron Phelps, Emily Price, Duane Robertson, Tressa Turner
F-'-'ect: Re: Request for Help
Forwarded ;
x : Dorothy Dimsdale 6/13/96 10:28AM (1544 bytes: 32 In)
To: Mark Nuhfer
Subject: Re: Request for Help
' Message Contents
Mark - You need to read Section 31.25, Program Income, concerning
earning income on grants. If the income is earned during
the course of the grant, you will need to tell them what to
do with those funds - there are several options. After the
grant is over, the can do whatever they want with any funds
they earn unless you tell them otherwise by a grant
condition. We normally don't have anything to do with
program income after the grant period is over.
Yep, they can earn a "profit." If they didn't charge more
than cost for whatever they produced there wouldn't be any
program income since you deduct the cost of producing the
item to determine the income.
Doro
Dorothy,
I wonder if you might be able to direct me to the appropriate
regulation(s) that deal with the following situation:
A University is applying for a grant to produce an educational video,
which they propose to sell to schools, groups, and individuals.
Does the University have to sell the video at cost, or may they sell it
at a profit?
Thanks for the help!
Mark Nuhfer
Watersheds Protection Section
x6587
-------
?KQ€RAK\ iMCMtg.
Author: Kim Gnoffo at REGI0N4
Date: 08/11/95 03:27 PM
Priority: Normal
?0: Ed Springer
CC: Betty Barton
CC: Kim Gnoffo
Subject: disposition of project income
Message Contents
Ed:
Compost generated as a result of a poultry composting demonstration
paid for with FY 92 319 money was sold and generate about $15,500
worth of income. The project total is $92,796 of which $30,704 or 34%
is federal funds.
According to 40 CFR part, we have three options for the disposition of
program income: 1) Deduction - or take our cut of the money back,
which in this case would be about $5,200; 2) Addition - expand the
activities of the project which in this case really isn't feasible as
the composting demo's have been completed; or 3) Match - allow
Limestone Valley R C & D and/or the state of Georgia to keep the money
and apply it as match.
I am inclined to support #3, allowing the R c & D to keep the money
which they will use to continue supporting programs designed to
encourage farmers to put environmental controls in place.
Please let me know if I am in error in this interpretation. Thanks!
Kim
-------
FwPftimtoY Rtctif*
[128] From: Harriet Yancey 11/22/95 10:24AM (3894 bytes: 85 In) Jy C
To: Ed Decker, Betty Barton , • "/ /
Subject: Re [2] : Proprietary rights on grant-funded equipment •
Message Contents r--\.
Ed/Betty, /J
w v. '
Did Leif forward his response to you? In case he did not,
here it is
hhy
/
Dear Harriet: I have called Mr. Decker and was
able to speak to him--though he didn't have much info to
add. However, the details are not crucial.
Under section 319(i)(l), (2), (3) & (4), we can certainly
authorize demonstration grants. However, (2) requires that
the application take such form as the "administrator may
require" .... The only regs I could find on demo grants are
in 40 CFR 40.100 thru 165. Of all the "authorized" demo
grant programs in 40 CFR 40.110, section 319 grants are NOT
listed!! Since 40 CFR 40.110 does not list s. 319 and since
40.100 covers Research AND Demonstration Grants, the
applicability of 4C CFR 40.100 to s. 3 j.9 d^tno grants is
questionable. Regular grant regs apply (40 CFR part 30),
etc.
The import of all this is that there are no specific rules
that cover this situation, or involving proprietary rights.
Obviously, you will need to comply with s. 319 & gen. grant
regs. Let me know if the grantee wants to be excepted from
any disclosure requirements (if its Patents, copyright or
trademark rights he's trying to protect--that info is
already publicly available--trade secrets will be a
different story.)
Good luck, Leif
Leif,
Thought I'd bug you about this again. It keeps coming up on
my ^ollow-up list
hhy
Leif,
As follow-up to our "brief" conversation re: above subject,
please call Ed Decker, EPA project officer, at VM 6582 for
details about their question.
Thx,
Harriet
dear, have you had any time to research this yet? Soon?
Thx,
Harriet
HELP! ! !
Harriet
-------
Harriet - can you ask Leif for help in this. Thanks
Ed
We've had a new question raised by the State of Fla, in
reference to their FY 96 Section 319 grant:
What-, if any, restrictions apply to using Section 319 grant
funds to demonstrate and promote the use of equipment and/^or
a process that is under patent or other proprietary rights?
We'll appreciate your help in researching this question.
thanks.
bb
I'm sorry Harriet but I've been caught up with end-o-year
garbage and have not had time to look at this. Are they
trying to market a product currently available on the
market? What is the product? Are they only going to promote
its use. . .c1: other products that ma-/ favs similar effects?
I'll try and call a couple of my colleagues in other
Regions. Why don't they just tidy up a swamp or something?
•Lp
-------
uev/nnt* 'n£6u£*r
$32
PRO^
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLAND STREET. N E
ATLANTA. GEORGIA 30365
tXt'C
FEB *4 1595
4PM-CGA
MEMORANDUM
SUBJECT:
P fj u ••
-- =. u"
^3 2 1395
WATERSK£0 UNIT
cnfl ocniONJ rv
J?
FROM:
TO:
Deviation Request from the Provisions of 40 CFR 31.23,
for the North Carolina Department of Environment,
Health and Natural Resources Section 319(h) Grant
William A. Waldrop, Jr.
Acting Assistant Regional AdministratOf"-
for Policy and Management
Gary M. Katz, Director
Grants Administration Divisic- (3903-F)
Region 4 awarded federal funds in the amount of $2,001,398
for a Section 319(h) grant to the North Carolina Department of
Environment, Health and Natural Resources on May 25, 1990. The
State matching share was $1,225,470.
The State is requesting a deviation from the requirements of
40 CFR 31.23 which would allow the State to be reimbursed for
costs incurred prior to the grant award date. The amount of pre-
award costs are $415,660 for the federal share and $300,933 of
non-federal funds. The State has made no previous request for a
deviation on this grant.
This was the first Section 319(h) grant the State received.
Previous experience of the State staff had been with continuing
program grants where costs can be incurred before the award date.
The State was under the mistaken opinion that costs incurred
between October 1, 1989, and May 21, 1990, would be allowable
under the grant so several workplan activities were initiated
before the grant was awarded.
In a letter dated October 24, 1990, the State informed EPA
that several workplan activities had been initiated before the
grant was awarded. The Region inadvertently failed to inform the
State that these grant funds were not allowable until August
1994.
Printed on Recveltiti Pantfr
-------
2
Attached is a letter from the State of North Carolina Idated
December 14, 1994, requesting the deviation. The Region concurs
with the request. Supporting documentation is attached.
The Region 4 contact is Dorothy Dimsdaie (404/347-2200 ext.
6795)r
Attachments
cc: Richard Mitchell (3903-F)
-------
James B. Hunt, Jr., Governor
Jonathan B. Howes, Secretary
A. Preston Howard, Jr., P.E.; Director
State of North Carolina
Department of Environment,
Health and Natural Resources
Division of En', :,onmental Management
DEHNR
December 14, 1994
Ms. Betty Barton
U.S. Environmental Protection Agency
345 Courtland Street N.E.
Atlanta, Georgia 30365
RE: Request for Deviation, FY90 Section 319 grant, Cooperative
Agreement No. C9994791-90. Award = $3,336,868 ($2,001,398 (F);
$1,335,470 (S))
Dear Ms. Barton:
This is in response ~o the August 22, 1letter from Mr. Ira
Linville (enclosed) asking that a request for ocviaLion be
submitted to cover costs incurred before the FY90 grant budget
period. The matter concerning additional documentation has been
addressed in a separate letter to you dated December 14, 1994.
The Division of Environmental Management (DEM) hereby requests
this deviation from 40 CFR 31.23(a) to allow the costs incurred as
listed by EPA in the August 22, 1994 letter to be covered by the
FY90 grant because we acted in good faith to meet all the grant
requirements. These costs were incurred after October 1, 1989, but
before May 21, 1990 which is the date of the grant award. There
have been no previous requests for a deviation on this grant.
DEM agrees that costs were incurred before May 21, 1990, but
we understood that the grant was retroactive to October 1, 1S89.
This was the propcct-J start date of the grant according to the
Department's grant application which was submitted to EPA on
January 10, 1990. DEM simply regarded the grant to be a program
grant that allowed pre-award costs to be covered. The nature of
this grant no doubt led to this confusion because program grant
funds for 201(g)(1) and 205 (j) (5) , which included FY89 funds, were
all included as part of the FY90 Section 319(h) award. There has
been no intention to cover these costs without EPA Region IV
knowledge becauseall of the activities were approved by EPA Region
IV and subsequent status reports sent to the Regional Office as
early as October 24, 1990 were never questioned. In any case, we
regret the confusion that has surrounded this first Section 319(h)
award and we attribute some of the problem to the newness of the
program and to combining the different type of funds into one grant
award.
P.O. Box 29535. Raleigh. North Carolina 27626-0535 Telephone 919-733-7015 FAX 919-733-2496
An Equal Opportunity Affirmaltve Action Employe' 50t> recycled/ 10% post-consumer paper
-------
Ms. Betty Barton
December 14, 1994
•Page Two
I hope this letter addresses your concerns to your
satisfaction. If you have any questions require additional
information, please contact me at 919-733-d083. Thank you in
advance for your thoughtful consideration of this request for
deviation.
Sincerely,
Steve Tedder, Chief
Water Quality Section
Enclosures
cc: David Harding
dev.ltr
vol.12
-------
SK
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 courtlamd street ne
ATLANTA GEORGIA 30365
MEMORANDUM
® 1 6 (955
DATE:
SUBJECT: Deviation from the Provision, of 40 CFR 31.23(a) North
Carolina FY 90 Section 319(h) grant
FROM: Betty Bartor
North Carollhr^SftferCe' Coordinator
Surface Water Quality Grants Team
THRU: E. Stallings Howell, Chief
Wetlands, Oceans and Watersheds •'•ich
TO: Linda Mobley, Acting Chief
Grants, IAG and Audit Management Section
Applicant Information:
State of North Carolina
Department of Environment, Health and Natural Resources
P O Box 29535
Raleigh, North Carolina 27626-0535
Grant Numcei. "SOC1"''C _-90
Allocated Amount: $2,001,398 federal plus $1,335,470
nonfederal match
Date of Award: May 25, 1990
Project Period: May 25, 1990 - September 30, 1993
Period for Which a Deviation is Requested: October 1, 1989
through May 24, 1990
Amount of Pre-award costs: $415,660 federal and $300,933
non-federal
EPA Project Officer: Betty Barton
404/347-2126 x6588
Section of the CFR from which a deviation is needed: 31.23
North Carolina requested a deviation from 40 CFR Part 31.23
EPA Region IV is requesting a deviation from 40 CFR Part
31.23.
-------
Description of Circumstances:
EPA Region IV's review of closeout documentation for this
grant revealed that the State had initiated some workplan
activities and incurred costs before the grant was awarded. In a
letter from Mr. Steve Tedder dated December 14, 1994, (copy
attached) the State requested a deviation from 40 CFR Part 31.23,
so that pre-award costs incurred between October 1, 1989 and the
award date would be allowable.
Analysis and Recommendation
The State's position is that they have acted in good faith
to meet the program requirements, and implement the approved
workplan. The grant was confusing because it included several
different funding sources, including some FY 89 funds as well as
FY 90 funds. In addition, it was the State's first experience
with Section 319(h) funding. The State program staff was not
.iware that thes«j funds could not be use' retroactively, as their
past 205(j)(5) grants had been. In a letter dated October 24,
1990, the State had informed EPA Region 4 that several workplan
activities had been initiated before tho grant was awarded. The
State received no response from EPA on this issue until almost
four years later. On August 22, 1994, Ira Linville sent a letter
to Mr. Steve Tedder informing him that these grant funds had not
been available for pre-award costs.
This grant included several different funding sources:
FY 90 was the first Section 319(h) grant the State of North
Carolina received. Prior to this grant, the state Nonpoint
Source Program staff's experience with 205(j)(5) funds had been
as continuing program grants, where costs may be incurred
retroactively to the first day of the fiscal year, rather than
project grants, where costs cannot be incurred before the award
date. The fact that the grant included both FY 89 and FY 90
205(j)(5) funds, as well as several other sources of funds, added
to the complexity.
FY 89 205(j)(5)
FY 90 205(j)(5)
FY 90 201(g)(1)(B)
FY 90 319(h)
FY 90 319(h) Supplement
$ 109,473
173,061
671,892
796,972
250,000.
-------
3
Since Section 319(h) funding was first appropriated in FY
90, there has been question in the Region regarding these grants,
and whether they should be awarded as project grants or
continuing program grants. For the first four years, Region 4
decided to award Section 319 funds as project grants. Beginning
in FY 94, the Region has begun awarding Section 319(h) funds as
continuing program grants instead.
Once informed that the State had incurred pre-award cos4"",
EPA Region 4 had a responsibility to inform the State that these
costs were not eligible for reimbursement. Unfortunately, this
did not happen until two years after all funds had been drawn
down.
The State has made no previous requests for a deviation on
this grant. There is no reason to believe that approval of this
request will set a precedent for other requests from the grantee.
We have reviewed the State's request deviatior and find
L.he request to be reasonable and consistent with the goals of the
Clean Water Act. We recommend that this deviation from the
regulations be approved as requested.
If you have questions or need additional information, please
call Betty Barton at extension 6588.
-------
3AlAit 7WR.CHA&
Lotus cc:Mail For: Betty Barton
,hor: Ron Phelps at REGION4
Date: 03/05/97 10:02 AM
Priority: Normal
TO: Betty Barton
TO': Steven Blackburn
TO: Bo Crum
TO: Drew Kendall
TO: Howard Marshall
TO: Glenda Miller
TO: Mark Nuhfer
TO: Emily Price
TO: Duane Robertson
TO: Tressa Turner
TO: Tom Welborn
Subject: training video
Message Contents
Ron,
States are permitted by the grant regulations to follow
their own procurement procedures. However, I believe
Mississippi has no statewide procurement system and follows
the procedures found in Section 31.36. Paragraph (d) of
this Section discusses procurement by
small purchase procedures, which Mr. Millette's situation
appears to fall under. (I believe you said the estimated
cost of this video development was ® $18,000, which is well
below the simplified acquisition (i.e., small
purchase) threshold amount of $100,000.)
These small purchase procedures state that price or rate
quotations must be obtained from an adequate number
of qualified sources. (The recommendation is 2 or more.)
Although small procurement contracts generally go to the
low bid vendor, there may be other considerations
that justify why it was not used, such as
past performance, ccnticctc: integrity, or technical
resources available. However, it would be difficult to
justify using another vendor, if their cost was much higher
than the other quotations.
Let me know if you have further questions.
Harriet
Harriet,
cam u provide some help on this ???
thx
Ron
Forward Header
Subject: training video
Author: rjmillette®juno.com (Robert J Millette) at IN
Date: 02/25/97 09:14 AM
am currently in the process of trying to contract out services from
It Grayson to do the trainiii^ video to supplement the Sediment &
erosion Control Manual. Walt has done several videos in conjunction with
Mark's group and is familar with BMPs and their importance. Adnmi is now
giving me problems, citing some OMB A-87 paper and demanding that I go
out for the low bid. I am trying to get a video done, not purchase
equipment and will be contracting Walt's talent as he will develop the
script, shots and editing. He has also agreed to produce a video for
-------
thfe budget we have and will bend over backwards to work with us. Can you
give me any suggestions to help get through this?
-------
IN0ICAT0R5 or i*p*op«irrT
IN CONTRACT IMG
SOLICITATION PHASI. Look To
o Tailored Specification#
o Government Estimates
o Vague Specifications
o Unnecessary Purchases
o Time Limitations
o Sole Source
Sped f icat ione 10 restrictive
as to exclude competing firms.
Estimate# not prepared or
prepared after solicitations
are requested.
Sped f lcatione do not include
work site locations, all known
changes, or have poorly
defined wox* descriptions.
Bids beinc solicited for go^ds
or services that aren't needed
or that duplicate other
contracts.
Response times for the sub-
mission of bids is restricted
giving one offeror an unfair
advantages.
Justifications are vague,
inadequate or not authorized
at the appropriate level.
BID EVALUATION PHASE. Look
o Similarities Among Bids
o Odd Company Names
o Bid Sheets
Documents from competing firms
contain similar or identical:
--Company names
—Company stationery
--Handwr1tten/sIgnatures
--invoice numbers(in sequence)
—Telephone numbers
Vendor's name suggest* it may
not provide the type of
service or product being
solicited.
Bid sheets are changed to
indicate competition when only
one bid was solicited.
-------
AWARD/ORDERING PHASE, com. Look for
o Split Purchases
o Emergency Procurements
o Purchases of Small
1 terns
o Unusual Purchases
Invoices being split to cir-
cumvent the procurement
author1 ty 1imitatIon.
An undue number of sole sojrce
procurements are justified as
emergency purchases.
Procurements Involving exces-
sive amounts of tools, equip-
ment, and supplies such as
calculators and cameras.
Materials being purchases that
do not relate to the job being
performed or exceeding the
amounts needed to perform the
job.
POSTAWARD PHASE. Look for:
o Improper Certifications
o Cost Increases
o Questionable Test
Results
The receipt of goods and
services is certified even
though physical inspections
have not been performed.
Substantive changes in con-
tract requirements shortly
after award.
Laboratory test reports that:
- are copies or have been
a 1tered;
- lack the appropriate
signature;
- differ from Government or
independent test results;
- are typed on contractor
stationery; and/or
-are dated after shipment.
Also, watch for reports that
show repetitive results or are
narked "pass or fail" instead
of being quantitative, as
requ ired.
-------
POSTAWARD PHASE. CONT. Look
o Que*t1 onat)2 e Contract
Modit ica 11 ons
tor :
Acceptance of substandard or
substitute material;
continuous granting of no-cos:
extensions when contractor Is
at fault; and granting of
deviation requests without
suppor t.
-------
3PAtTV IH- «int>
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
efiOA
REGION IV
345 COURTLAND STREET M E
ATLANTA GEORGIA 30365
4PM-CGA
^ 1 1996
Mr. Gregory Upham, Manager
Nonpoint Source Program
Tennessee Department of Agriculture
Division of Agricultural Resources
Ellington Agricultural Center
Box 40627
Nashville, TN 37204
Dear Mr. Upham:
Your memorandum of January 22, 1966, to Howard Marshall has
been referred to this office for response. Let me preface my
answers to your questions with this foundation: It is my
understanding that the objective of the two projects you
specified is to educate the public regarding non-point source
pollution control. Third party in-kind services count towards
satisfying a cost sharing or matching requirement only where, if
the party receiving the contriubtions were to pay for them, the
payments would be allowable costs (40 CFR 31.24).
Question 1 (a & bl
If the student is performing work required by the
project (i.e., laborer, classroom aide, etc.), his
services may be counted as match. If the student's
involvement is solely in a learning capacity, he is
not providing a service, but is a beneficiary of
the project.
Question 2 (a & b)
If the teacher is performing work required by the
project, whether in or out of the classroom, his
services may be counted as match.
I hope these answers are the ones you wanted. If you need
further clarification, please give me a call at 404/347-2200, VMX
6805.
Jdnda C. Motley, Acting Chief
Grants, IAG and Audit Management
Section
{/ cc: Howard Marshall
-------
IN-KIND CONTRIBUTIONS
• Contributions must be for allowable costs under the
grant/cooperative agreement.
• Any part of contribution acquired with Federal funds is
not allowable.
SERVICES
Donated or Vr»i nnt-oer Services; Unpaid services may be
furnished to an organization by professional and
technical personnel, consultants, a--* other skilled and
unskilled labor.
Rates for Voliint-«wr Services; Rates for volunteers shall be
consistent with those regular rates paid for similar work
either in the organization or consistent with those rates
paid for similar work in the labor market in which the
work is xocated. A reasonable amount for fringe benefits
may be included in the valuation.
Services Donated by Other Organizations; When an employer
donates the services of an employee, these services shall
be valued at the employee's regular rate of pay -
exclusive of fringe benefits and indirect costs
provided the services are in the same skill for which the
employee is normally paid. If the services are not for
the same skill, then the fair market value shall be used.
-------
2
DONATED SUPPLIES AND LOANED EQUIPMENT
• Donated supplies will be valved at the fair market value
o
of the supplies at the time of donation.
• Donated use of equipment or space in a building will be
valued at the fair rental rate of the equipment or space.
DONATED EQUIPMENT. BUILDINGS. AND LAND
If a third party donated equipment, building, or land and
the title passes to a grantee or subgrantee, the method
for charging cost varies depending on the purpose of the
grant.
1) If the purpose of the grant is to pnrrhaup
property, then total market value of the donated
property at the time of the donation may be
claimed.
2) If the purpose of the grant is to support
activities that require the uae of equipment, .
buildings, land, etc, and approval is given by EPA,
the market value of the equipment and/or buildings
and fair rental value of land may be claimed. Full
value of equipment or other capital assets and fair
rental charges for land may be allowed only with
EPA prior approval. With no prior approval land
may not be counted and only use allowances may be
counted for donated equipment and buildings.
-------
DOCUMENTATION
Basis for determination of the valuation must be
documented and must not exceed the fair market/rental
value.
Records must be verifiable.
Full value of equipment or other capital assets and fair
rental charges for land must have prior EPA approval.
Volunteer services must be documented, and to the extent
feasible, supported by the same methods used by the
recipient for its employees.
EPA suggests developing a memorandum/form to document in-
kind contributions which should include:
Type of contribution
Hours or Quantity
Rate (Including how rate was determined.)
Date
Total Value
Approvals
-------
James E. Bickford
Secretarv
$3
VEHlCCt 5
COMMOMWEALTH OF KENTUCKY
Natural Resources and Environmental Protection Cabinet
Department for Environmental Protection
Frankfort Office Park
14 Reilly Rd
Frankfort KY 40601
Paul E. Patton
Governor
i'£>h 6
' V/
J
November 6, 1996
Robert F. McGhee, Director
Water Management Division
EPA Region IV
345 Courtland Street, NE
Atlanta, GA. 30365
Dear Mike:
We would appreciate your staff clarifying the Region IV policies concerning the purchase
and/or lease of vehicles under grants to the Commonwealth of Kentucky. Up until a few
years ago the purchase and direct charge of vehicle purchase was an allowable grant
expense. In the past year, however, we had been informed by both the Wastewater SRF
program and the 319(h) program that only the lease of vehicles could be supported by
grants.
Further, in the case of the SRF program, we were informed that the intent of leasing was
to ensure that the cost of the vehicle was accounted within the indirect cost pool. On the
other hand, we understand the 319(h) program's position was that the direct charge of
lease costs to the grant was acceptable. As a final complication, we now have received
word from the 319 program that purchase and direct charge was again an option.
We understand concerns on the part of EPA concerning vehicles that are purchased by
state programs under specific grants and then used in a general motor pool situatioa
While there are State motor pool vehicles available to the Division of Water (DOW) this
operation is totally separate from those vehicles owned and operated by DOW. At no
time has any vehicle purchased by DOW with funds from any source been assigned to a
general use motor pool.
Our bottom line is that, currently, our budget office will not allow the purchase and/or
lease of additional vehicles to support federal program activities unless they are direct
charged to a grant. The addition of leased vehicle charges to our indirect cost pool is
not considered sufficient financial support to cover the cost of adding an additional
vehicle or vehicles to our fleet for use in a specific grant program.
^ Printed on Recycled Paper
^ An Equal Opportunity Employer M/F/D
-------
Mr. Robert F. McGhee, Director
Water Management Division
Page Two
We would hope region IV can provide a uniform policy across all grant programs that
allows the direct charge of vehicle purchases to our grants. Currently, we are cone: faring
the purchase of only 3 federally funded vehicles (2-319 program, 1-Wastewater SRF
program). State price contracts for SFY 1997 vehicle purchases will become effective
very soon and we are in need of new vehicles, therefore, your prompt response would be
appreciated.
Thank you for your assistance and cooperation.
fck A. Wilson
Sincerely,
-------
b
z
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 4
ATLANTA FEDERAL CENTER
100 ALABAMA STREET, S W
ATLANTA, GEORGIA 33303-3104
ssy
1-/ ,r?
PHO^°
DEC i 6 1896
4PM-GPB
Mr. Jack A. Wilson
Director
Water Management Division
Kentucky Natural Resources and Environmental
Protection Cabinet
Department for Environmental Protection
14 Reilly Road
Frankfort, KY 40601
Dear Mr. Wilson:
I am -esponding to your letter aater .'^vnnbor 6, 1996, to
Mike McGhte concerning the purchase and/or lease of vehicles
under Assistance Agreements to the Commonwealth of Kentucky.
This letter will address Environmental Protection Agency (EPA)
programs other than Superfund which has specific program
requirements which differ from those of other programs.
In accordance with OMB Circular A-87, "Cost Principles for
State, Local, and Indian Tribal Governments," and 40 CFR Part 31,
"Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments," equipment purchases
are allowable costs under assistance agreements.
In addition, OMB Circular A-87 requires cost to be treated
consistently in accordance with the cost allocation plan that
forms the basis for the indirect cost pool. cost allocation of
.vehicles (wholly or partially) as direct or indirect, depends on
the approved cost allocation method. The Circular further states
that equipment is a typical direct cost when it can be identified
specifically with a particular final cost objective.
Part 31 states that ..."a State will use, manage, and dispose
of equipment acquired under a grant by the State in accordance
with State laws and procedures." Title to equipment rests with
the State unless the Federal government specifically reserves the
right to transfer'title to the Federal Government or a third
party named in the award document.
The Circular and regulations state that equipment costs are
allowable under an assistance agreement if the item is determined
to be an eligible cost of the specific EPA program which is
funding the award. If the EPA program office agrees that the
item is necessary to the direct performance of the workplan and
Recycled/Recyclable • Printed with Vegetable Oil Based Inks on 100% Recycled Paper (40% Postconsumer)
-------
2
chat it is an allowable, reasonable cost, the equipment may
generally be included as an eligible direct cost under the grant.
If direct charging is inconsistent with the approved indirect
cost allocation plan, then the equipment could not be purchased
under the grant as a direct, charge but should be purchased with
State funds and charged to the grant under a equitable usage rate
plan. In some cases it may be more reasonable to rent or lease a
piece of equipment and charge it as a direct cost to an
assistance agreement with EPA Project Officer approval.
In summary, unless direct charging is inconsistent with the
approved indirect cost allocation plan; equipment that is
purchased/leased for a specific program need should be considered
as a direct cost to the agreement under which it was purchased.
Therefore, we recommend the Department's accounting personnel
determine that direct charging of vehicles is consistent with the
approved cost allocation plan.
If you have any additional questionr or med further
clarification, please call me at 404/562-8410, or
Dorothy DimsJale of my staff, at 404/562-8398.
Sincerely,
it Management
Section
Office of Po/icy and Management
cc: ^Jim Reynolds, KNREPC
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION IV
345 COURTLAND STREET NE
ATLANTA GEORGIA 30365
Mr. Alan Hallum, Chief
Water Protection Branch
Georgia Environmental Protection Division
Suite 1058
205 Butler Street
Atlanta, GA 30334
Res CWA S319 FY '93 - Element 8 and FY '94 - Element 10 grants
Teacher/Student Water Quality Trend Monitoring for NPS
Pollution
.jar j-^^Tailum:
This letter is in response to your letter of May 16, 1995,
to Gail Vanderhoogt, concerning the eligibility of the cpsts of
room and board for teachers and students attending monitoring
workshops paid for, in part, with Clean Water Act Section 319
funds. Previously, our representatives have indicated that these
costs are not allowable under Section 319 program grants to the
states, citing a strict interpretation of OMB Circular A-87,
"Cost Principles for State and Local Governments." In
investigating this issue further, we have found, in an EPA Order
with a Case study example (enclosure), reasons to allow these
costs to be funded within the scope of the project.
We apologize for any problems this issue may have caused
your agency or the contracting organization. If you have any
questions, please do not hesitate to call me, at (404)347-2126
ext. 6576, or Kim Reid Gnoffo (404)347-2126, ext. 6586.
Sincerely,
S>. }%CoJUU^—<
E. Stallings Howell, Chief
Wetlands, Oceans, and
Watersheds Branch
Enclosure
Printed on Recycled Paper
-------
EPA ORDER 57XX XXX
XXXXXX
CASE STUDY #1
FACTS:
1. An EPA office has recently announced a new regulatory program.
A trade association has submitted a proposal requesting EPA
financial assistance for a national conference to inform its
members about the new program and its requirements.
2. The trade association will run the conference, including
developing the agenda and selecting the speakers. Association
employees and members are among the featured speakers. EPA's
role will consist of sending a few officials to the conference
to speak, answering questions and monitoring the proceedings.
3. The proposal calls for funds to cover the travel expenses of
the non-federal speakers and others who will participate in
programs and workshops at the conference.
4. For purposes of this case study, assume that there is
statutory authority and delegated approval authority
for this award.
QUESTION A: May the office use an assistance agreement to fund
this conference?
ANSWER A:
the
Yes. The principal purpose of the agreement is to
support the trade association in training and
educating its members, not to acquire services for
the Government's direct use or benefit. Although
EPA officials will speak at the conference and EPA
derives some benefit from explaining its program,
principal purpose of the agreement is to provide
information to the regulated parties.
QUESTION B:
May the agreement pay for travel expenses of non-
federal speakers and other participants in the
conference?
ANSWER B:
Yes. Participant support costs such as stipends,
subsistence allowances, travel allowances, and
registration fees for a conference, meeting, or
training are allowable under an assistance agreement
and are covered by OMB Circular A-122. However,
travel costs for Federal personnel cannot be paid
for through assistance agreements.
15
-------
(JftftKSK0P£
J UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
—MM 2 0 1955 REG'ON 'v
3JSCOURiL»NO STREET \ !£
ATLANTA G E- G R GIA 3 O 3 6 5
Mr. Greg Upham, Manager
Nonpoint Source Program
Division of Agricultural Resources
Tennessee Department of Agriculture
Ellington Agricultural Center
Post Office Box 40627
Nashville, Tennessee 37204
Subject: Proposed Project "Water Education for Teachers"
(WETT). EPA Grant No. C9994594-94
Dear Mr. Upham:
This letter is in response to a draft work plan for the WETT
project transmitted by your February 27, 1996, correspondence to
me. Item #3 of the budget, "Workshop and Academy Participants,"
referenced "participant expenses, to include time, travel and
substitute reimbursements during training, workshops and
inservices.
The cost for the teachers' time and travel would be
allowable project costs and are reimbursable expenses. Those
expenses are appropriate to use as financial match.
The substitute teachers are not directly involved in the
teacher training program and their efforts do not directly
contribute to meeting project objectives, i.e., teaching
Tennessee teachers about nonpoint source pollution. The expenses
for the substitute teachers are not cost reimbursable, and,
therefore, are not allowable as financial match. Accordingly,
you should delete substitute substitute teacher reimbursements
from the budget. Additional allowable sources of rton-federal
match may have to be identified.
If I can be of additional assistance in this matter, please
do not hesitate to contact me.
Sincerely,
Howard L. Marshall, Ph.D
Project Officer
cc: Mike Countess, TDA
Jim Nance, TDA
Mandy Clark, TDA
Betty Barton, EPA Region IV
Linda Mobley, EPA Region IV
Stephanie Lankford, EPA Region IV
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,
*<. - REGION 4
"t
-------
2
(c) salaries and wages of employees engaged xn setting up
and displaying exhibits, making demonstrations, and
providing briefings;
In your telephone call, you also inquired about revised
Circular A-87's discussion of reasonable costs and its reference
to arms-length bargaining, market prices, and deviations from
established practices which may unjustifiably increase the.
Federal award's-cost.
As you mentioned, MDEQ follows Part 31.36 when procuring
goods or services under a Federal award, which allows States to
follow the same policies and procedures it uses for procurements
with its non-Federal funds. However, since the State of
Mississippi procurement rules do not cover contracts, there is no
State requirement to obtain price or rate quotations for this
type procurement.
All costs under a Federal award, whether incurred in-house
or contracted out, must ir"*et the tests of eligibility,
al-owabiiity, allocability, necessity and reasonableness and be
able to withstand an audit. These tests apply to both direct and
indirect costs. In the absence of a State procurement process
for contracts, MDEQ may wish to follow paragraphs (b) through (i)
under Part 31.36. Following these procurement procedures should
insure that the cost of a contract is reasonable and does not
exceed that which would be incurred by a prudent person under
similar circumstances.
If the above discussion does not fully address your concerns
regarding both public relations costs and reasonable costs under
revised Circular A-87, please feel free to contact Harriet Yancey
or me to further talk about these issues.
GrantsV^IAGs, and Audit
Management Section
-------
Cardinal
-------
Cardinal®
-------
r _ ^
^ n ro
| | Office of Inspector General
Report of Audit
V"~*~V
*L prO^
ANIMAL WASTE
DISPOSAL ISSUES
Audit Report No.
E1XWF7-13-0085-7100142
March 31,1997
-------
Inspector General Division(s)
Conducting the Audit
Region(s) covered
Program Office(s) Involved
Special Review Unit
Region 4
Office of Water
Office of Enforcement and Compliance Assurance
-------
MEMORANDUM
SUBJECT: Animal Waste Disposal Issues
Audit Report No. E1XWF7-13-0085-7100142
FROM: Michael Simmons
Deputy Assistant Inspector General
for Internal Audits (2421)
TO: Robert Perciasepe
Assistant Administrator for Water (4101)
Steven Herman
Assistant Administrator for Enforcement
and Compliance Assurance (2201 A)
Attached is our audit report entitled "Animal Waste Disposal Issues." Our overall
objective was to review the 1995 spills from animal waste lagoons in North Carolina to determine
the State's actions before and after the spills, and what EPA could do to prevent such spills in the
future.
In accordance with EPA Order 2750, you as action officials are required to provide us
within 90 days a report on the actions that the Agency has taken as a result of our
recommendations. IF-your proposed actions will not be complete at the time of your response, we
ask that you describe the actions that are ongoing and provide milestones and completion dates
for those actions.
Should your staff have questions or desire to further discuss the issues raised in the report,
please contact Judith Vanderhoef, Chief, Special Review Unit, on 260-5471.
Attachment
-------
EXECUTIVE SUMMARY
PURPOSE
In July 1995, animal waste from an eight-acre lagoon in North Carolina burst through its dike,
spilling approximately 22 million gallons of animal waste into the New River. The spill was twice
the size of the Exxon Valdez oil spill. We reviewed information related to this and five other
spills occurring in the summer of 1995 to determine what actions the state had taken before and
after the spills, and to determine what EPA could do to reduce the possibility of animal waste
spills in the future, in North Carolina and elsewhere.
RESULTS IN BRIEF
North Carolina is the number one meat-producing state in the nation. For hogs alone, the animal
waste produced for disposal is an estimated 9.5 million tons per year. In the summer of 1995,
North Carolina experienced six spills from animal waste lagoons totaling almost 30 million
gallons. North Carolina has not issued any National Pollutant Discharge Elimination System
(NPDES) permits to livestock or poultry facilities: Nationwide, only 30% of the estimated 6,600
operations meeting concentrated animal feeding operation (CAFO) size requirements have been
issued NPDES permits (although not all are required to have permits).
North Carolina, which was delegated NPDES authority in 1976, has had a no-discharge state
program for animal feeding operations that has been stricter than federal regulations. For
example, before 1993, state regulations set requirements on hog facilities with 250 hogs, whereas
federal regulations are not automatically applicable until the facility has 2,500 hogs weighing an
average of 55 pounds!. In 1993, the state started strengthening its animal waste management
program by requiring facility registration and certified animal waste management plans.
'Animal feeding facilities with 750 to 2,500 hogs must meet federal regulations in certain
circumstances, such as directly discharging wastes into waters .of the United States. EPA may
also designate facilities as CAFOs regardless of the numbers, of animals if there are indications of
polluting activity, but only on a case-by-case basis.
i E1XWF7-13-0085-7100142
-------
As a result of the animal waste spills in 1995, the state further strengthened its animal waste
management program. Additional requirements included permitting, stricter lagoon construction
requirements, annual inspection requirements, certification of operators of the waste management
system, and siting requirements for the animal feeding operations. The permitting system requires
an animal waste management plan, which state personnel call the "backbone" of the permit
system. The plan establishes the individual requirements for a facility including nutrient
management. The improvements in the state's program are due to the state's efforts, involving
several different state offices, with significant assistance from the North Carolina Cooperative
Extension Service and the Natural Resources Conservation Service of the U. S. Department of
Agriculture. EPA was not significantly involved in this effort.
Even with its efforts to strengthen its animal waste management programs beyond federal
requirements, North Carolina experienced problems with these programs, including the spills cited
previously. Twenty-two states, by law, cannot adopt environmental program regulations that are
more restrictive than the specific requirements in federal regulations. Therefore, should any of
these states experience problems similar to North Carolina, they will neither be able to readily
strengthen state environmental regulations to prevent future occurrences, nor can they rely on
federal regulations to provide this protection.
Land application, nutrient management, specific facility construction, and waste system operator
training and certification are critical elements of North Carolina's animal waste management and
regulatory program. Federal regulations do not address these elements, but the regulations allow
NPDES permits to include land application procedures where the land application is a necessary
part of the animal waste management system. EPA encourages including the remaining elements.
Permitting helps ensure that the critical elements of a good animal waste management system are
adhered to. Permitting also enhances compliance efforts. Under existing regulations, when
inspecting an unpermitted facility, the inspector may be able to take expedient action only upon
observing a discharge from a lagoon.
"Pollution prevention first" is an Agency strategy. The goal for the CAFO program should be to
prevent a spill, and therefore pollution, before it occurs. The permit can be the tool to help
achieve that goal. Therefore, the Agency should maximize use of current permitting authority.
Current regulations allow permitting authorities (federal or state) to designate an animal feeding
operations as a CAFO on a case-by-case basis if the operation is a significant contributor to
pollution of waters of the U.S. Permitting authorities must complete an on-site inspection that
considers factors such as size, location, vegetation, rainfall and other elements that affect the
likelihood or frequency of discharge prior to designating a CAFO. The designation process may
be time and manpower intensive; however, we believe it offers a measure of protection that
otherwise would not occur. For this reason, we suggest its adoption on a more wide-spread
basis.
The Office of Enforcement and Compliance Assurance (OECA) has included CAFOs as a priority
for enforcement and compliance actions in 1998. OECA is now working to develop a compliance
ii
E1XWF7-13-0085-7100142
-------
and enforcement strategy, which would include means of identification of non-permitted facilities.
Use of U.S. Department of Agriculture data to identify areas with environmental problems is
being considered as a means to focus the compliance and enforcement strategy for CAFOs.
RECOMMENDATIONS
We recommend that the Assistant Administrator for Water, with the support of the Assistant
Administrator for Enforcement and Compliance Assurance, take actions to implement the
following recommendations. CAFO regulations should be revised and reissued to streamline and
strengthen the definition of a CAFO. Regulatory actions should also be taken to include minimum
adequate requirements for land application, nutrient management, waste system operator training,
and facility and expansion construction requirements.
In the meantime, use of existing regulations should be maximized by encouraging in delegated
states and requiring in non-delegated states intensive use of the case-by-case CAFO designation.
A means for identification of at-risk animal feeding operations for permitting consideration under
CAFO case-by-case designation rule should be developed. We also recommend that a plan to
inspect permitted and unpermitted CAFOs on a regular basis be established.
Agency Comments
In the March 31, 1997 response, the Office of Water and the Office of Enforcement and
Compliance Assurance generally agreed with the report and agreed to take corrective actions that
should enable the Agency to provide better protection and prevent pollution from animal waste
disposal. OW and OECA indicated that they share the concerns expressed in the report about the
environmental threat posed by animal waste. Both offices have included animal waste as a
priority in office initiatives for fiscal 1997 and 1998, and are working together to assure proper
regulation of CAFOs.
Office of the Inspector General Evaluation
We believe that the actions of OW and OECA will address the concerns addressed in the report.
The cooperation and coordination of OW and OECA efforts in addressing the animal waste issue
should assist in strengthening EPA's water quality program. Applicable comments from the
response have been incorporated in the report.
E1XWF7-13-0085-7100142
-------
GLOSSARY
Animal Unit - unit of measurement used to determine when animal feeding operations with
different types of animals meet the CAFO definition. Based on its size, each animal is assigned a
different weighting factor in the regulations. For example, an animal feeding operation with
feeder catde and swine would be defined as a CAFO when the number of feeder cattle multiplied
by 1.0 plus the number of swine (over 55 pounds) multiplied by 0.4 totals more than 1,000.
Animal Waste Management Plan - a plan to properly collect, store, treat, or apply animal waste to
land in an environmentally safe manner. The plan generally includes information on. site
evaluation, facility design, and a waste utilization plan that addresses land application procedures
and nutrient management Also known as waste utilization plan or pollution prevention plan.
Animal Waste Management System - combination of structures and nonstructural practices
serving an animal feeding operation that provides for the collection, treatment, storage, and/or
land application of animal waste.
Effluent - waste material discharged into the environment especially when serving as a pollutant
Effluent Guidelines - effluent limitation guidelines, which mean any restrictions established on
quantities, rates, and concentrations of chemical, physical, biological, or other constituents that
are discharged from point sources.
Lagoon - a confined body of wastewaters to hold animal byproducts including bodily waste from
animals or a mixture of waste with feed, bedding, litter, or other agricultural material.
Land Application - removal of wastewater and waste solids from a control facility, such as a
lagoon, and distribution to, or incorporation in, the soil primarily for disposal purposes.
Nutrient Management - managing the amount, form, placement, and timing of application of
nutrients (whether as animal waste, commercial fertilizer, or other form of nutrients) to plants.
The purpose is to supply plant nutrients for optimum forage and crop yields, minimize entry of
nutrients to surface and groundwater, and maintain or improve condition of soil.
Point Source - any discernible, confined, and discrete conveyance, including but not limited to any
pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated
animal feeding operation, or vessel or other floating craft, from which pollutants are or may be
discharged.
"Wet" Animal Waste Management System - System using lagoon and land application for
disposal of animal wastes.
iv
E1XWF7-13-0085-7100142
-------
TABLE OF CONTENTS
Eage
EXECUTIVE SUMMARY i
Glossary
. iv
CHAPTERS
1. INTRODUCTION 1
Objective 1
Background 1
Scope and Methodology 4
Prior Audit Coverage 4
2. HOG WASTE SPILLS RESULT IN REGULATORY CHANGES
IN NORTH CAROLINA 5
State "Deemed Permitted" Program 6
Changes Occur After The Spills 7
3. WHAT CAN EPA DO? 9
Current Federal Regulations 9
Permitting Requirements . . .11
Permitting Enhances Compliance And Enforcement Program 11
Pollution Prevention 13
Measuring Progress 13
Recommendations 15
APPENDIX
REPORT DISTRIBUTION ..: 20
E1XWF7-13-0085-7100142
-------
CHAPTER 1
INTRODUCTION
Objective In June 1995, animal waste contained in an eight-acre lagoon in
North Carolina burst through its dike, spilling approximately
22 million gallons of animal waste into the New River. The spill
was twice the size of the Exxon Valdez oil spill, and reportedly
killed fish along a 19-mile downstream area. This was the worst of
six reported spills in the state during the summer of 1995.
At the request of OIG senior management, we reviewed
information concerning the spills to determine what preventive
measures were taken in the state before and after the spills and what
EPA could do to reduce the possibility of animal waste spills in the
future, in North Carolina and elsewhere.
Background Animal feeding operations and feedlots are concentrated, confined
animal or poultry growing operations for meat, milk, or egg
production. Animal waste resulting from these operations can be
considerable and requires disposal. For example, hogs generally
produce two to four times more waste, per hog, than humans. In
North Carolina, hog waste amounts to about 9.5 million tons per
year. Most of the hog operations use a "wet" animal waste
management system to dispose of the waste. The animal wastes are
stored in earthen pits called lagoons, for decomposition. Then, the
wastes are disposed of by spraying on, spreading on, oi
incorporating into crop lands, in a process known as land-
application.
Animal waste, if applied to land properly, can provide nutrients
such as nitrogen to soil. However, improper application or over-
application of animal waste to the soil or spills from lagoons can
result in discharges into rivers and streams that contribute to
"nutrient-pollution" in surface waters. The overabundance of
nutrients speeds the growth of algae in surface waters.. When algae
growth exceeds the capacity of the surface waters to support it,
oxygen in the waters is depleted and fish kills can result. Animal
1
E1XWF7-13-0085-7100142
-------
waste is also linked with Cryptosporidium and giardia, pathogens
that can be waterborne and can cause diseases that adversely affect
human health. Animal waste is not the only source of pollutants
discussed above, but even if only one of several contributors, it is a
compelling reason to ensure that animal waste is disposed of
correcdy.
Under the Clean Water Act (CWA), the discharge of any pollutant
into the waters of the United States by a point source is unlawful
unless the discharge is in accordance with a permit issued under
the National Pollutant Discharge Elimination System (NPDES).
The CWA defines the term "point source" as "any discernible,
confined, and discrete conveyance, including but not limited to any
pipe, ditch, channel, tunnel, conduit, well, discrete fissure,
container, rolling stock, concentrated animal feeding operation
(CAFO), or vessel or other floating craft, from which pollutants are
or may be discharged." The term exempts agricultural stormwater
discharges and return flows from irrigated agriculture. The
inclusion of concentrated animal feeding operations in the
definition of the term "point source" subjects CAFOs to the
requirements of NPDES.
The CWA does not specifically define a CAFO. However, the
legislative history of the CWA suggests that Congress intended that
the CAFO definition be applied to feeding operations
accommodating large numbers of animals. In addition, any animal
feeding operation that was directly discharging wastes into streams
traversing the operation was to be considered a CAFO, no matter
the number of animals.
In order to meet the requirements of a court order to issue CAFO
regulations, the Agency released the proposed NPDES regulations
for CAFOs for comment in November 1975. The final regulations
were promulgated and effective on March 18, 1976, and are found
in Tide 40 of the Code of Federal Regulations (CFR) Part 122.23.
In 1992, the Agency established a workgroup to address issues
related to CAFOs. The workgroup issued The Report of the
EPA/State Feedlot Workgroup in 1993. One of the report
recommendations was that the Agency provide additional guidance
on CAFOs. The Agency issued the CAFO guidance, Guide Manual
On NPDES Regulations For Concentrated Animal Feeding
Operations, in February 1996.
2
E1XWF7-13-0085-7100142
-------
In 1996, the Natural Resources Defense Council (NRDC), in
comments on EPA's draft plan for biennial review of effluent
guidelines as required by the CWA, raised the CAFO issue with the
Agency. NRDC encouraged the Agency to readdress the effluent
guidelines for all feedlots, including CAFOs. On January 31, 1997,
the Agency agreed, as part of a consent decree with NRDC, to
include feedlots as an industry that will be studied beginning in
1997 and ending in 1998. Among the specific areas that the
Agency has agreed to consider for study are general
characterization of wastewater from CAFOs in terms of pollutant
concentrations, volumes, and environmental impacts. The study
will also review the pollutant reduction capabilities of various
control and treatment practices, associated costs, waste generated
by different animal types, and a profile of the industry relative to
size and location of facilities. The result of the study will be a
preliminary data summary. The Agency has also begun internal
discussions focusing on the need for review of the point source
definitions concerning CAFOs as found in 40 CFR Part 122.23 and
is including CAFOs as a priority for the Office of Water National
Agenda for 1997-1998. The Agency is also including CAFOs as a
priority for compliance and enforcement.
Animal feeding operations have changed since the regulations were
issued more than 20 years ago. The United States Department of
Agriculture (USDA) has reported that from 1982 to 1992 the
number of hogs coming from farms producing 200 or fewer Head
per year declined 44%, while the number of hogs coming from
farms that produce 5,000 or more head per year increased by
257%. More recent pork industry figures indicate a similar trend.
From 1991 to 1996, the number of hog operations accommodating
less than 1,000 hogs decreased by 24%, while the number of
operations handling over 5,000 hogs increased by 15%. The
Agency has estimated that approximately 2,000 NPDES permits
have been issued to CAFOs, out of an estimated 6,600 operations
which met size requirements for a CAFO. Not all of these
operations are required to have a permit. Under existing
interpretation of CAFO regulations, operations that do not
discharge in other than a defined storm event are not required to
obtain a permit
3
E1XWF7-13-0085-7100142
-------
Scope and Methodology The audit was conducted from October 1996 through February
1997. We interviewed Office of Water, Office of Enforcement and
Compliance Assurance, and EPA Region 4 personnel who work
with CAFO issues. We also interviewed personnel with the State of
North Carolina Department of Environmental, Health, and Natural
Resources (Divisions of Air, Water Quality, and Soil and Water.
Conservation), North Carolina Cooperative Extension Service, and
USDA, including its Natural Resources Conservation Service
(NRCS) in North Carolina. Additional interviews included
individuals associated with various environmental organizations
and a local industry group. We also accompanied a State of North
Carolina inspector on an inspection of a swine facility. We
reviewed documents and information related to CAFOs and the
lagoon spills in North Carolina from a variety of sources, including
newspapers, the-Agency, the State of North Carolina, USDA,
Natural Resources Conservation Service, environmental and
industry organizations, OIG, and General Accounting Office
(GAO).
We conducted this audit in accordance with Government Auditing
Standards (1994 Revision) issued by the Comptroller General of the
United States as they apply to economy and efficiency and program
results audits. Our audit included auditing procedures considered
necessary for the audit, but did not include a test of internal
controls related to NPDES and reports required under Section
305(b) of the CWA. We refer to the NPDES permit system, but
we did not test or evaluate the permit system itself. Therefore, we
cannot and do not attest to its integrity.
Prior Audit Coverage The Central Audit Division of the EPA OIG released an audit
report, Region 7's Efforts To Address Water Pollution From
Livestock Waste, in September 1996. This audit found that the
Region needed a more structured overall strategy to measure
states' success in reducing livestock waste pollution. The General
Accounting Office completed a briefing report, Animal Agriculture:
Information On Waste Management and Water Quality Issues, in
June 1995. Applicable information from these reports was used in
this report as necessary.
4
E1XWF7-13-0085-7100142
-------
CHAPTER 2
HOG WASTE SPFI.I.S RESULT IN RF.GIIIATORY CHANGES
IN NORTH CAROI.INA
North Carolina is the number one meat-producing state in the
United States, with the swine industry alone accounting for 8.9
million hogs and 4,500 operations. During the summer of 1995,
there were six reported spills totaling almost 30 million gallons of
animal waste from waste operations at animal feeding facilities in
the state. Five of the six spills occurred at swine facilities.
At the time of the spills, North Carolina had issued no NPDES
permits to any livestock or poultry feeding operations.2 The state
did have a "no-discharge" program in place for its animal feeding
operations, which was, in many ways, stricter than the federal
CAFO regulations. Yet, in 1995, the discharges from animal waste
operations associated with animal feeding facilities reached surface
waters in the state, and resulted in varying amounts of damage.
After the spills occurred, the state passed legislation to further
strengthen its regulatory program related to animal feeding
operations. North Carolina has not issued an NPDES permit to any
livestock or poultry feeding operation.
Forty-two of the states have met federal requirements and have
been delegated authority to administer their state's NPDES
program, as allowed by CWA section 402(b). North Carolina
received its delegation in 1976. In general, North Carolina is
considered by EPA personnel, both at Headquarters and Region 4,
to be a leader among the states in addressing water quality issues
and to have strong water quality programs. However, Region 4
was recently sued by an environmental group for failing to require
North Carolina to set and enforce "firm thresholds" for
2North Carolina has issued four NPDES permits to
aquaculture feeding operations which are regulated separately from
livestock and poultry operations.
5
E1XWF7-13-0085-7100142
-------
nitrogen in the Neuse River plan. As mentioned earlier, increased
levels of nitrogen in surface waters can occur as a result of
improper land application or spills of animal waste, though animal
waste disposal is only one of several possible sources of increased
levels of nitrogen.
State "Deemed Permitted" Before 1993, North Carolina had a "no-discharge" requirement that
Program considered animal waste facilities "deemed permitted" as long as
the facility was not discharging animal waste. There were no
registration or reporting requirements, and state inspections were
performed only if there was a complaint. In 1993, the state
strengthened its regulations. Facilities were still "deemed
permitted" with no discharge, but registration of the facility was
required based on the number of animals. For hog operations,
registration was required when the operation accommodated 250 or
more hogs. The state based its registration requirement on the
number of animals at which a facility would need a "wet" animal
waste management system that would include a lagoon. The
regulations also required that registered facilities have an animal
waste management plan which had to meet, at a minimum, Natural
Resource Conservation Service (NRCS) standards for North
Carolina, as certified by a technical specialist3. Existing facilities
had to have these plans completed by the end of 1997. New and
expanding operations had to have the certified animal waste
management plan in place prior to stocking animals at the facility.
Despite these stricter requirements, there were six spills from
animal waste operations in North Carolina in 1995. The spills
included a 22 million gallon spill from a swine facility, a 6 million
gallon spill from a poultry facility, and a total of 2 million gallons
from four separate spills at four different swine facilities. Heavy
rainfall contributed to all of the spills. Poor management
contributed to several of them. An NRCS engineering report about
the 22 million gallon spill found that the lagoon was breached
during a period of rainfall that was much higher than normal and at
a time when the lagoon liquid level was very near the top of its
3Technical specialists were designated by the North Carolina
Soil and Water Commission. Technical specialists can include
engineers, agronomists, and soil scientists.
6
E1XWF7-13-0085-7100142
-------
embankment In total, almost 30 million gallons of animal waste
were spilled in North Carolina in 1995.
Changes Occur After The After the 1995 spills, the Governor directed that a statewide
Spills inspection of animal waste lagoons be completed. More than 3,600
lagoons were surveyed, with 124 lagoons identified as being at
great risk of overflowing or bursting. An additional 526 lagoons
were identified as having effluent higher than desired, placing them
near a critical point. The state legislature also passed additional
requirements for animal waste operations. The additional
requirements include permitting; annual inspections of facilities;
certification of operators of animal waste management systems;
stricter lagoon construction requirements; and siting requirements
for the animal feeding facilities. The state established a general
permit with five sections. The performance standards section
requires an animal waste management plan that maintains the no-
discharge requirement except in certain storm events. The
operations and maintenance requirements include nutrient
management for land application of waste. Other requirements of
the permit are monitoring and reporting with required
recordkeeping, inspections, and general conditions. State
environmental personnel noted that the animal waste management
plan is the "backbone" of the permit system, because this certified
plan establishes the individual requirements for a facility that
include nutrient management procedures. The general permit, with
its animal waste management plan requirements, provides a
stronger enforcement tool than the "deemed permitted" system.
General permit requirements were not yet finalized at the time of
our visit to the state, so we could not assess the impact of the new
program on the state's compliance and enforcement program.
North Carolina had taken action against those operations involved
in the 1995 spills, as well as others, and Region 4 considered these
actions to be adequate. The operator of the hog facility which
spilled 22 million gallons of waste was fined approximately
$ 104,000 in penalty and enforcement costs. However, this
operation, which, after the discharge, met the definition of a CAFO,
does not have an NPDES permit.
We discussed North Carolina's new requirements with federal,
state, and industry officials. Many individuals we talked to agreed
that it was a reasonable expectation for a large animal feeding
operation to have an animal waste management plan. The
7
E1XWF7-13-0085-7100142
-------
certification requirement for operators of animal waste management
was also considered important, but we found that the
reasonableness of this requirement was not as universally accepted
as the requirement for an animal waste management plan.
By strengthening the state regulations related to animal feeding
operations, North Carolina is in a better position to protect the
state's water quality from accidental spills and improper land
application of animal waste effluent. The improvement in the
state's animal waste management program is due to the state's
efforts, involving several different state offices, with significant
assistance from NRCS, and the North Carolina Cooperative
Extension Service.
EPA did not significantly contribute to the improvements in the
state's program. EPA Region 4 offered manpower assistance to the
state for its initial lagoon inspection program in 1995, but the state
said that its legislature had provided additional funding to complete
the inspections. The state did write the Region later requesting
assistance in the form of funding. Region 4 offered technical
assistance and was trying to ensure that grant funds were directed
toward animal waste issues.
Region 4 has an Agriculture Coordinator, but the coordinator had
visited the state of North Carolina only once in three years, in
November 1996. Travel fund limitations were cited as the reason
for no travel to the state for three years, including the summer of
1995 when the state was experiencing spills from animal feeding
facilities. The Region was taking some steps to address the animal
waste issue. A team to look at animal waste issues has been
established. One of the team's goals was to develop a regional
strategy on animal waste issues.
8
E1XWF7-13-0085-7100142
-------
CHAPTER 3
WHAT CAN EPA DO?
EPA has recognized the value and benefit of pollution prevention
initiatives. Encouraging and persuading, or if necessary, requiring
and compelling facilities to operate in an environmentally
responsible manner provides better protection for the nation's
vegetation, animal, aquatic, and human population than any fines or
penalties. As EPA's Five Year Strategic Plan states,
"... anticipating problems and stppping them before they occur is far
more cost effective and protective of the environment" than solving
environmental problems long after they have been created.
Pollution prevention has changed the way EPA does business—but
not as it applies to CAFOs. EPA's regulations were written in the
1970s, and have restricted EPA's ability to deal proactively with
CAFOs. North Carolina had to change its regulations to handle
situations which could not be dealt with adequately under existing
federal regulations.
Before the 1995 spills, North Carolina had an animal feeding
operation permit program that was, in many ways, stricter than the
federal CAFO program. Yet, North Carolina experienced
significant problems with animal waste operations. As a result, the
state significantly strengthened its animal feeding operation
regulatory program.
Twenty-two states, by law, cannot adopt environmental program
regulations which are more restrictive than the specific
requirements in the federal regulations. Should any of those states
experience problems similar to the North Carolina spills, they
cannot readily strengthen their own state environmental regulations
to minimize future occurrences, nor can they rely on federal
regulations to provide this protection.
Current Federal Under federal regulations, only animal feeding operations defined as
Regulations CAFOs are point sources and must be permitted. Meeting the
definition of a CAFO requires consideration of several factors as
9
E1XWF7-13-0085-7100142
-------
defined in 40 CFR Part 122.23. First, the animal feeding operation
must contain a specified number of animals, such as 700 dairy
cattle, or 2,500 swine weighing over 55 pounds, or 1,000 animal
units. Second, an animal feeding operation with a fewer number of
animals (300 to 1,000 animal units) which discharges pollutants
through a man-made device or directly into waters of the United
States also a CAFO. While these two factors alone are somewhat
complex, the addition of a third factor can confuse both regulators
and the regulated community. Federal regulations state that any
animal feeding operation that otherwise meets the definition of a
CAFO (factor one or factor two) but discharges only in the event of
a 25 year, 24-hour storm,4 is not a CAFO.
The regulations also allow for the permitting authority (federal or
state) to designate an animal feeding operation as a CAFO on a
case-by-case basis if the operation is a significant contributor of
pollution to waters of the United States. The designation authority
has several specific requirements that must be completed for the
case-by-case CAFO designation to be assigned. The permitting
authority must conduct an on-site inspection prior to any
designation. The size and location of the facility, the amount of
waste reaching waters of the United States and means of
conveyance of the waste, and the slope, vegetation, rainfall, and
other factors affecting likelihood or frequency of discharge must
also be considered. The designation process may be time- and
manpower- intensive. However, we believe that it offers a measure
of protection that otherwise would not occur. For this reason, we
suggest adoption of the case-by-case designation on a more
widespread basis.
""The National Weather Service publishes maps that show
the amount of rainfall (expressed in inches) that constitutes a 25
year, 24-hour storm for every location in the United States.
10
E1XWF7-13-0085-7100142
-------
Permitting Requirements Federal regulations do not address land application, nutrient
management, animal waste management plans, specific construction
requirements, or operator training and certification. These factors,
however, are critical elements of North Carolina's strengthened
animal waste management and regulatory program. EPA
regulations allow land application to be addressed in NPDES
permits issued to CAFOs where land application is a necessary part
of operating the animal waste management system to achieve the no
discharge requirements of the feedlot effluent guidelines. EPA
encourages permit writers to include the other elements in the
permit. EPA. Region 6 issued a general permit for CAFOs for the
four states that have not been delegated NPDES authority. This
general permit includes requirements for the above elements, as
well as other requirements similar to those contained in the North
Carolina permit program.
North Carolina has much stricter coverage, since it requires permits
for facilities with many fewer animals and without regard to
discharge. Region 6, and those states that must follow federal
regulations, will not have the same depth of coverage as North
Carolina. For example, in North Carolina, a swine facility with 250
hogs must be permitted, while in Region 6 the swine facility would
generally need to have 2,500 hogs to be permitted. Permitting
helps ensure that the critical elements of a good animal waste
management system are adhered to.
The Office of Water has included CAFOs as a priority for its
National Agenda for 1997-1998. Compliance with existing NPDES
permits will be evaluated. The need to issue permits to additional
animal feeding operations that are significant contributors of
pollution will be assessed, as well as the need to strengthen national
guidelines for CAFO operations through identification of improved
operational practices.
Permitting Enhances OECA has included CAFOs in its fiscal year 1998 national
Compliance And enforcement priorities. Headquarters and regions will develop
Enforcement. Program memorandums of agreement that spell out regional enforcement
expectations and responsibilities, and delineate roles. At the
present time, OECA personnel noted that it is difficult to have an
effective compliance and inspection program. Only 30% of the
estimated 6,600 facilities that must meet the no-discharge CAFO
regulations are permitted.
11
E1XWF7-13-0085-7100142
-------
Permitting facilities will allow for more effective inspections.
Inspection of non-permitted facilities, which is allowed by the
CWA, is limited by the no-discharge regulation. This means that if
inspections are conducted under federal requirements, the facility
would have to have a discharge/spill in process at the time of the
inspection for EPA to take expeditious action5. Since permitted
facilities must meet permit requirements, which include many of the
critical elements mentioned above, such as nutrient management for
land application, inspections for permitted facilities can be more
effective. OECA is now working to develop a compliance and
enforcement strategy, which would include means of identification
of non-permitted facilities. Use of USDA data to identify areas
with environmental problems is being considered as a means to
focus the compliance and enforcement strategy for CAFOs.
We believe that the current regulations, for CAFOs need to be
simplified and strengthened. We suggest elimination of the
25 year, 24-hour storm exemption and a reduction in the minimum
number of animal units requiring an NPDES permit.
In the meantime, we believe that the Agency can and should be
proactive by maximizing present permitting authority. This effort
should begin by requiring that all operations meeting the CAFO
definition and having unallowed discharges be issued NPDES
permits. In addition, the case-by-case designation should be
adopted on a more widespread basis. Under the present
regulations, increased permitting would enhance the compliance
and enforcement program.
This endeavor should be coordinated with OECA's compliance and
enforcement efforts on CAFOs. OECA will need to develop a
methodology to identify and prioritize at-risk feeding operations.
Once the at-risk operations are identified, case-by-case CAFO
designation efforts should be encouraged by the Agency in states
with-delegated authority, and initiated by the Agency where it
retains authority.
5EPA can also take action upon observing indications that
problems are imminent, such as a lagoon near the top of its
embankment or improper operation of the lagoon, but the action
cannot occur as quickly as when a spill is observed.
12 E1XWF7-13-0085-7100142
-------
Pollution Prevention Pork industry figures indicate that, from 1991 to 1996, the number
of hogs processed has increased 8% while the number of hog
operations decreased over 20%. As the numbers of operations
decrease while the numbers of hogs increase, one can conclude that
the number of animals per operation is increasing. We understand
that this trend is generally applicable across the animal feeding
industry. Therefore, it appears that the number of facilities which
meet the size requirements of CAFOs are also increasing. The
Agency should be able to do more to ensure that the larger facilities
operate in an environmentally responsible manner.
EPA has increasingly recognized the value and benefit of pollution
prevention initiatives. We believe that permitting with its attendant
management plans, specific construction requirements and operator
training and certification, as well as inspections, are pivotal to the
pollution prevention process
The Agency's Strategic Plan presents pollution prevention as one of
the seven Agency-wide principles and states that "Pollution
prevention will be the first strategy considered for all programs at
EPA." The goal for the CAFO program should be to prevent a
spill, and therefore pollution, before it occurs. The permit can be
the tool to help achieve that goal. For maximum effectiveness, the
permit should address design and construction issues, waste and
nutrient management issues, and waste management system.
operator training and certification. EPA already encourages
including most of these areas in permits, but the effort would be
enhanced by developing, with state and industry input, a model
general permit for each, type or all types of animal feeding
operations.
Measuring Progress Section 305(b) of the CWA requires states to provide biennial
reports to the Agency on the quality of waters in the state. The
reports generally describe the quality of waters, both surface water
and groundwater, and existing state programs to protect water
quality. Waters are assessed on how well they support designated
use (e.g., swimming, aquatic life support, and water supply), as well
as likely causes of impairment. The Agency is required to provide
the state reports, together with an analysis of the reports, to
Congress biennially.
13
E1XWF7-13-0085-7100142
-------
As noted in the GAO report, Animal Agriculture: Information on
Waste Management and Water Quality Issues. Agency officials
believe that the 305(b) reports are the best available information on
water quality. However, there are limitations to the usefulness of
the reports. The reliability of the state report depends on how
much monitoring the state actually does and how much estimation
is used. In addition, the Agency does not know how states decide
how and where to monitor. The Agency noted that the 1992/1993
state reports assessed 17% of the nation's rivers, 42% of its lake
acres, and 78% of estuary square miles.
Agency officials said that North Carolina's monitoring program
covers approximately 85% of the state's water. That program rates
"pretty good" nationwide and really stands out in the region. When
we asked if comparing 305(b) reports would help in assessing
improvement/degradation of water quality, Region 4 officials said
that a 305(b) report is a "snapshot" and not a "trend" document, so
generally comparison would not be possible. However, since North
Carolina does extensive monitoring, comparison of the state's
reports might be possible.
The 305(b) reports give North Carolina a tool to evaluate the
impact of its strengthened animal waste management system
regulations on the state's water quality. Since the state knows
where the CAFOs are and extensively monitors water quality for
the 305(b) report, the state should be able to assess
improvement/degradation in water quality.6
Not all other states are this advanced. Therefore, the usefulness of
this tool will vary from state to state. This method of assessment
will only be helpful with a suitable 305(b) water quality monitoring
program and adequaite CAFO permitting.
One of the ways the Agency proposes to measure results under the
Government Performance and Results Act is through the use of the
305(b) reports. We do not believe that these reports will provide
adequate national assessment at this time. Clearly, more
6We realize that this is an oversimplification of the
implementing use of such a-tool. But we are including it as a means
for encouraging uses of existing sources of data for performance
measurement.
14
E1XWF7-13-0085-7100142
-------
needs to be done to improve the reports for use as a reliable
measuring device. The Central Audit Division of the OIG is now
addressing water quality issues Agencywide that will more
completely assess the 305(b) report and other indicators, their
functions, and usefulness.
Recommendations We recommend that the Assistant Administrator for Water and the
Assistant Administrator for Enforcement and Compliance:
1. Take actions to revise and reissue the CAFO regulations to
include the following:
a. Streamline and strengthen the definition of a CAFO to
ensure more adequate and equitable coverage nationwide.
b. Delete the storm event exemption and reduce the minimum
number of animals requiring an NPDES permit.
Agency Response
The Office of Water (OW) supported this recommendation, but
noted that its implementation is a long-term action that is best
conducted along with the study of the feedlot effluent guidelines.
Estimated completion of the revised guidelines is December 2004.
Concurrently, OW will be developing and implementing a
watershed approach in abating pollutants from CAFOs. This short-
term action is to assist upper level management in understanding
the overdue need for revising the CAFO regulations at 40 CFR Part
122.23. OW and OECA will develop a draft CAFO regulatory
deficiency paper to be distributed at a national OW/OECA National
CAFO meeting in May 1997. OW, OECA, and the Office of
General Counsel will develop a policy statement to clarify the
definition of a CAFO. The policy statement will be used by the
EPA Regions and the states to help them determine which
operations are required to obtain an NPDES permit.
OIG Response
Although not specifically stated, your response seems to indicate
that the revision to the CAFO regulations at 40 CFR Part 122.23
will be completed at the same time as the effluent guidelines. We
agree with this concurrent approach. Please provide milestone
15
E1XWF7-13-0085-7100142
-------
dates for revising 40 CFR Part 122.23. Also, we will need
milestone dates for the policy statement to consider your response
complete.
2. Take actions to address in a regulatory manner (either through
CAPO or effluent limitation guideline regulations):
a. Minimum requirements for land application, nutrient
management, and waste system operation management
b. Facility and expansion construction requirements.
Agency Response
In the short-term, the Agency stated that it will encourage
permitting authorities to include in permits minimum requirements
for animal waste management (including ultimate disposal of
waste), and the development of best management practices (BMPs)
which assure adequate knowledge of waste management by
operators. OW noted that many of these issues are included in its
effluent guidelines preliminary study of feedlots. The Office of
Wastewater Management (which is responsible for permitting) will
assist the Office of Science and Technology (which is responsible
for effluent guidelines) in the effluent guidelines study.
PIG Response
We agree with the Agency response. Please specify exactly how
and when you intend to encourage permit authorities to include
minimum waste requirements in their pennits. OW must ensure
that the areas above are included in the feedlot effluent guidelines
study.
3. Maximize use of existing regulations:
a. Develop a methodology for identification of at-risk animal
feeding operations for permitting consideration under CAFO case-
by-case designation rule. Encourage in delegated states, and
require in non-delegated states, intensive use of the CAFO case-by-
case designation rule to ensure that permitting is increased to
minimize potential problems from animal feeding operations.
b. Require that NPDES permits are issued to facilities meeting
CAFO size requirements which have prior unallowed discharges.
16
E1XWF7-13-0085-7100142
-------
Agency Response
OW, OECA, and the Office of Policy, Planning, and Evaluation are
forming a team to develop a methodology and a policy paper to
encourage Regions/States to use existing case-by-case designation
more frequently for permitting at-risk animal feeding operations.
The project completion date is March 1998.
OIG Response
We agree with the Agency response.
4. Develop a model general permit, such as Region 6's general
permit, for required use in non-delegated states and encourage use
in delegated states where state actions can be no stricter than
federal requirements.
Agency Response
OW agreed that the need for a model general permit should be
considered, but noted that there are quite a few CAFO general
permits in existence at the present time. OW agreed to investigate
the need to develop a model general permit through input from
Regions and States over the next six months. If development of a
model general permit, which includes requirements for land
application, operations and maintenance, and reporting
requirements is warranted. The Office of Wastewater Management
in OW will undertake the development of a model general permit in
fiscal 1998-1999.
OICi Response
We agree with the Agency response.
5. Establish a plan to inspect permitted and unpermitted CAFOs on
a regular basis by either including some CAFOs in existing regularly
scheduled inspection programs or developing a regularly scheduled
program for inspection of CAFOs.
Agency Respopse
The Agency response stated that implementation of this
recommendation could be resource intensive. OECA noted that
17
E1XWF7-13-0085-7100142
-------
the most realistic approach would be to establish a targeted plan
for inspecting some permitted/unpermitted CAFOs based on the
risk to the environment. For example, under a States Watershed
Protection Approach (WPA), an identified universe of
unpermitted/permitted CAFOs could be inspected during a certain
cycle in a Basin Management Plan.
QIG Response
We agree with the proposed actions as long as some permitted and
unpermitted CAFOs are included in annual inspection plans.
Determining which CAFOs are inspected based on watershed risk
certainly seems to be a reasonable and appropriate approach.
6. Develop a model project to assess the usefulness of 305(b)
reports as a performance measurement for water quality related to
CAFOs. The project should also include assessment of the most
effective monitoring methods that would be helpful in improving
and standardizing the monitoring program nationwide.
Agency Response
OW and OECA did not generally agree with this recommendation.
Because the OIG Central Audit Division is now addressing water
quality issues Agency-wide that will more completely address the
305(b) reports, its functions and usefulness, the program offices
stated that it would be prudent to wait for the complete
recommendations on the 305(b) reports before the offices commit
to, develop, and implement this recommendation.
QIG Response
While the OIG is addressing the 305(b) reports as part of its work
with water quality issues, we do not agree that implementation of
this recommendation should be delayed. Gaps in the 305(b) data
are readily apparent and recognized in the agency. We believe that
the project recommended can be implemented on a small scale and
still be effective. There are existing state water quality monitoring
programs and CAFO programs that contain the necessary
information to allow a model project to be implemented. The
project could be established in an appropriate watershed to allow
assessment of such a performance measure and provide
18
E1XWF7-13-0085-7100142
-------
information that can be used by the Agency to improve
performance measurement. The information can also be used by
the OIG as it further considers the 305(b) reporting processes.
19
E1XWF7 -13-0085-7100142
-------
APPENDIX
REPORT DISTRIBUTION
Office nf Inspector General
Inspector General (2410)
Divisional Inspectors General
Director, Policy and Resources Management
Staff, Office of Audit (2421)
EPA Headquarters
Assistant Administrator for Water (4101)
Assistant Administrator for Enforcement and Compliance Assurance (2201A)
Director, Office of Wastewater Management (4201)
Director, Office of Science and Technology (4301)
Director, Office of Wetlands, Oceans, and Watersheds (450 IF)
Director, Office of Compliance (2221 A)
Director, Office of Regulatory Enforcement (2241 A)
Director, Engineering and Analysis Division (4303)
Director, Permits Division (4203)
Director, Assessment and Watershed Protection Division (4503F)
Director, Agriculture and Ecosystem Division (2225A)
Director, Water Enforcement Division (2243A)
Agency Audit Follow-up Official (3101)
20 E1XWF7-13-0085-7100142
-------
Agency Audit Follow-up Coordinator (3304)
Attn: Director, Resources Management Division
Regional Offices
Regional Administrators
Director, Office of Ecosystem Protection, Region I
Director, Division of Environmental Planning and Protection, Region II
Director, Water Protection Division, Region ID
Director, Water Management Division, Region IV
Director, Water Division, Region V
Director, Water Quality Protection Division, Region VI
Director, Water, Wetlands, and Pesticides Division, Region VH
Director, Office of Pollution Prevention, State and Tribal Assistance, Region VIE
Director, Water Management Division, Region IX
Director, Office of Water, Region X
Director, Division of Enforcement and Compliance Assistance, Region II
Director, Compliance Assurance and Enforcement Division, Region VI
Director, Office of Enforcement, Compliance and Environmental Justice, Region VIII
Director, Office of Enforcement and Compliance Coordination, Region X
21
E1XWF7-13-0085-7100142
-------
Cardinal&
-------
Chapter 1
AGREEMENT
Scope of Agreement and Fiscal Accountability
This Performance Partnership Agreement (PPA) covers the
following environmental programs:
• Air Protection
•Water Protection
• Public Water System Supervision and Groundwater
• Hazardous Waste
• Underground Storage Tank
• Emergency Response
• Information Management
• Customer Assistance
• Local Government Partnering
• Improved Communication
• Pollution Prevention
• Environmental Justice
• Community Based Environmental Protection
The work plans for all these programs are contained in the PPA.
A number of the covered programs are federally delegated and
federally supported and are administered by EPD.1 A Performance
Partnership Grant is the federal funding accompanying this Agreement
for the grant categories listed below. The Performance Partnership
Grant allows EPb to consolidate its categorical program grants into a
single environmental management grant. EPD is consolidating the below
listed eligible grants and/or cooperative agreements in this fashion. This
allows USEPA grant dollars to be allocated within or across media and
1 For Federally funded programs administered by EPD, 40 CFR
Parts 31 and 35 apply as Well as OMB circulars A-102, A-128 and
A-87 and as well as EPA's July 24, 1996 Guidance Document.
l
-------
programs which was not previously possible before. The following
grants and/or cooperative agreements are being consolidated under the
Performance Partnership Grant:
1. water pollution control - CWA Section 106 (including groundwater)
2. public water system supervision - SDWA Sections 1443(a) &
1451(a)(3)
3. underground storage tanks - SWDA Sections 2007(f)(2)
4. hazardous waste management - RCRA Section 3011(a)
5. air pollution - CAA Section 105 (does not include funding of Title V
activities)
Given that a Performance Partnership Grant is sought for these five
programs, this Agreement serves as the work plan for these programs.
Unless otherwise specifically noted, this document does not
supersede media specific or enforcement MOA's between EPD and
USEPA.
Enforcement
USEPA and EPD share a continued commitment to use a full range
of tools from traditional enforcement to compliance assurance activities
to strengthen our protection of public health and the environment by
directing scarce public resources toward improving environmental
results. Both parties recognize that the continuing foundation of strong
enforcement is a necessary and supporting aspect of the new strategies
which focus on risk to human health, communities, sensitive
ecosystems, and compliance assistance to the regulated community. In
many cases, the possibility of enforcement has served to both promote
greater participation in new initiatives and to encourage greater
innovation by businesses. It has also served well its key role of
ensuring a level "playing field" for all businesses.
The parties also recognize that each agency has strengths and
expertise to offer and identifiable roles and responsibilities in the
enforcement arena. The commitment made in this Agreement is to
2
-------
effectively utilize these respective strengths and areas of expertise and
to work together within our respective roles, and given our respective
responsibilities, to ensure a strong enforcement presence in Georgia.
The parties agree that USEPA has unique federal enforcement
responsibilities as environmental steward. It is USEPA's responsibility
to ensure the enforceability of federal environmental regulations; ensure
that national standards for the protection of human health and the
environment are implemented, monitored, and enforced consistently in
all states; foster environmental justice by assuring that environmental
pollution does not disproportionately affect minorities and low income
groups; establish national priorities for enforcement and compliance
assistance based on risk and/or national, interstate and transboundary
environmental and compliance problems; evaluate the effectiveness of
enforcement and compliance programs and policies on a national level;
build state and Tribal capability in implementing federal environmental
programs; lead by example by assuring compliance and promoting
pollution prevention throughout the federal sector; and empower the
public through access to information relating to the environmental
performance of individual facilities and sectors.
In light of these responsibilities, USEPA's enforcement role
includes:
(1) enforcing, in coordination with the State as appropriate, to
bring an immediate stop to illegal activities that pose actual
or potential harm to public health or the environment, or
harm to the regulatory program;
(2) enforcing, in partnership with the State, against sources that
pose the greatest risks to human health or the environment
and/or having histories of noncompliance, against companies
who have engaged in criminal conduct, and to deter and
prevent the creation of pollution havens;
(3) enforcing against corporate sources with significant
company-wide noncompliance in several states;
3
-------
(4) enforcing against sources where releases to the environment
threaten the health or environment of another state or
country;
(5) enforcing to assure compliance with federal consent
decrees, consent agreements, federal interagency
agreements, judgments and orders;
(6) conducting multi-media inspections and enforcement at
federal facilities; and
(7) enforcing in non-delegated programs, partially delegated
programs, or non-delegable programs.
Program Agreement and Review Procedures
The USEPA guidance on Performance Partnership Grants requires
that the PPG recipient prepare an annual report (as described in CFR
Section 31.40(b)) as well as satisfy any other reporting requirements in
the Agreement. In addition to evaluating performance based on the
Agreement's commitments, the PPG recipient should identify any
problems, delays, or conditions which materially affected the recipient's
ability to meet the Agreement's objectives and any benefits that
enabled the recipient to perform better than expected. Other
components of the Agreement's evaluation are set out in the Interim
PPG Guidance. The Guidance provides that after reviewing this annual
report, the USEPA Project Officer provides evaluation findings to the
recipient and includes such findings in the official PPG file. This
accomplishes two objectives:
1. To serve as a beginning for the negotiation of the FY
98 Agreement (this needs to be done early enough in
the Agreement's term to allow for time to negotiate
the next year's agreement); and
2. To serve as the assessment required for grant
accountability purposes and as discussed above (this
4
-------
assessment needs to be done late enough in the
Agreement's term so that a final assessment of
commitments can be accurate).
EPD commits to prepare an annual report satisfying USEPA's
requirements and submit it to USEPA by September 1, 1997. This is in
addition to the established reporting and oversight procedures contained
in the existing MOA's. The use of mid-year and end-of-year audits
program has proven to be beneficial to EPD and USEPA and will
continue.
Dispute Resolution
EPD and USEPA will use an agreed upon dispute resolution
process to handle the conflicts that may arise as we implement our
environmental programs and will treat the resolution process as an
opportunity to improve our joint efforts. The dispute resolution process
will be in accordance with 40 CFR Part 31.70.
In setting up the resolution process we hereby agree to the
following principles:
• We approach the discussion as an opportunity to improve
the product through joint efforts.
• We aim for resolution at the staff level, while keeping
management briefed.
• We promptly disclose underlying assumptions, frames of
reference and other driving forces.
• We clearly differentiate positions and check understanding of
content and process with all appropriate or affected parties
to assure acceptance by all stakeholders.
• We document discussions to minimize future
misunderstandings.
5
-------
• We pay attention to time frames and/or deadlines and
elevate quickly when necessary.
• We deal promptly with conflicts.
For the purposes of this agreement, EPD and USEPA agree on the
following dispute resolution, definitions and procedures:
1. Dispute - any disagreement over an issue that prevents a
matter from going forward.
2. Resolution process - a process whereby the parties move
from disagreement to agreement over an issue.
3. Principle - all disputes should be resolved at the front line or
staff level.
4. Time frame - generally, disputes should be resolved as
quickly as possible but within 2 weeks of their arising at the
staff level. If unresolved at the end of 2 weeks, the issue
should be raised to the next level of each organization.
5. Escalation - when there is no resolution and the 2 weeks
have passed, there should be comparable escalation in each
organization, accompanied by a statement of the issue and a
one page issue paper. A conference call between the parties
should be held as soon as possible. Disputes that need to be
raised to a higher level should again be raised in comparable
fashion in each organization.
Regional Environmental Strategic Plan
USEPA Region IV and the States in Region IV prepared a Regional
Environmental Strategic Plan (RESP) in 1996. This PPA furthers the
strategies in the RESP and is a step towards reliance on strategic
planning for environmental results. Future PPA's will continue in this
Direction.
6
-------
The Agreement can be reopened at any time during its term at the
request of either the Regional Administrator of USEPA or the Director of
EPD. Any modification or amendment to this Agreement must be in
writing and made by mutual consent of parties.
The Agreement is hereby entered into this a day of January
1997. The Agreement remains in effect until September 30, 1997,
unless amended by mutual consent of the parties.
Harold F. Reheis, Director ^ohn H. Hankinson, Jr.
Environmental Protection Division Regional Administrator
GA Department of Natural Resources USEPA Region 4
7
-------
CHAPTER 2
AIR PROTECTION
General
The purpose of this chapter is to set out the commitments for
Georgia's air pollution control program for Federal FY 97. It also
describes how State and Federal efforts will meet those commitments
and how the State's program performance will be measured. This
chapter identifies Core Program Commitments for EPD's Air Protection
Branch. These Core Program Commitments represent requirements in
statutes, regulations, standing legal agreements between USEPA and
EPD, and USEPA National Program Manager guidance. The
commitments consist of jointly established goals, objectives, activities,
deliverables, and performance measures. They are set out below to
facilitate effective environmental management and to form the legal
basis for the expenditure of federal grant funds. The commitments set
out in this chapter represent the work plan for Air Protection for
purposes of EPD's Performance Partnership Grant for FY 97.
EPD Air Protection Branch's main purpose is to protect the air
quality throughout the State and to insure that activities within the
State do not adversely impact interstate air quality. In order to do this,
limits have been placed on air emissions from industries and other air
pollution sources and a strong enforcement program has been put in
place. The air is measured throughout the State to determine its
quality. If it does not meet federal and state standards, additional
controls are required. By doing this, the health and welfare of the
general public have been protected. The only part of Georgia currently
not meeting national ambient air quality standards is the Atlanta ozone
nonattainment area. The goal is to bring Atlanta into attainment status
for ozone by 1999.
In addition, new federal rules required by the Clean Air Act
Amendments of 1990 will result in more controls of toxic pollutants
throughout the State. Specific industry types, from large pulp and
8
-------
paper mills down to small corner dry cleaners, will be required to install
additional air pollution control equipment to control specific air toxics.
These rules will be developed and phased in over several years, with the
long range effect of lowering the overall concentration of toxics in the
air and protecting the health of the general public. EPD is committed to
implement the air toxics requirements of the Clean Air Act, and to
supplement it with its own toxics control program, begun over 10 years
ago. EPD is also phasing in a state-wide toxic ambient monitoring
program (not required by USEPA), to measure air quality and to ensure
that these toxic controls are sufficient to protect the general public.
Further, and as detailed in this chapter, EPD also commits to
continue implementing its various programs, such as permitting and
monitoring in accordance with federal rules and guidelines and adopting
new federal rules in a timely manner. EPD will continue to work with
USEPA Region 4 on possible flexibility in those areas which may be
impeding progress toward true environmental improvement or may be
diverting resources away from activities which support State priorities.
Core Program Commitments
I. Attainment of National Ambient Air Quality Standards (NAAQS1
The Atlanta-area ozone nonattainment area is the only part of
Georgia not meeting national ambient air quality standards (NAAQS).
This is the most significant air quality environmental problem in the
State.
A. Goal: Bring the Atlanta area into attainment status for
ozone and protect the air quality throughout the State and insure
that activities within the State do not adversely impact interstate
air quality.
* Environmental Indicators:
Monitored levels of ambient ozone, both concentration and
frequency
9
-------
Reductions in ozone precursors (volatile organic compounds
and nitrogen oxides)
B. Objectives:
1. Fully participate in the Ozone Transport Assessment
Group (OTAG).
EPD Activity; Actively participate in OTAG workgroup
activities and in the ongoing activities of the OTAG
Southeast Modeling Center. This will lead to Georgia and
Southeast issues being addressed and fully considered in this
process and to results that will have a positive effect on air
quality in Georgia.
USEPA R4 Role: Assist EPD in meeting the intent of the
Phase II commitment, per the March 2, 1995 USEPA Ozone
policy memo. Participate in the national OTAG subgroups
and the regional modeling activities to provide assistance in
the OTAG assessment of regional control strategies by the
end of 1996. Help coordinate all Regional OTAG activities.
Provide technical staff support, particularly in the emissions,
inventory area.
2. Develop an ozone attainment State Implementation
Plan (SIP).
EPD Activity. Based in part on output from OTAG, develop a
control strategy for the Atlanta ozone nonattainment area.
This Strategy will address the definition of "attainment" as
predicted with a modeling strategy and any local, statewide,
regional, or national controls required for this strategy and
according to USEPA's revised attainment guidance. A
revised protocol will be developed to discuss how the OTAG
output will be used by EPD in their SIP strategy and any new
modeling procedures or inputs that will be used in the
development of the modeling demonstration.
10
-------
EPD Dfilivprahlpc-
• Submit an Atlanta area ozone attainment plan
approvable by USEPA R4 by mid-1997.
• Submit an updated modeling protocol and schedule,
outlining the developments and milestones to be
achieved leading to this submittal. This will be a
dynamic schedule and protocol with periodic updates
or revisions.
• Submit Urban Airshed Model (UAM) results with
interim assumptions about boundary conditions and
transport, as determined in consultation with USEPA
R4 by Summer, 1997. The ultimate goal is to meet
the requirements of the March 2, 1995 USEPA Ozone
policy memo. Any delays or problems that would
prohibit the SIP submittal will be presented to USEPA
R4 as soon as they are identified.
USEPA R4 Roles:
• Closely coordinate and work with EPD in the
development of this SIP to ensure timely review and
submittal of the SIP and coordination and resolution of
national issues.
• Complete review and take action on the revised 15%
and 9% plan submitted in the Summer of 1996, within
12 months of the completeness determination.
3. Implement Enhanced Inspection/Maintenance (l/M)
Program.
li
-------
FPD Artivitieg-
• Implement start-up of an enhanced l/M program,
ensuring high public and test station participation, and
ensuring high quality test data, taking advantage of the
l/M provisions of the 1995 Federal Highway Act.
• Develop an approvable program to evaluate the l/M
program's success under the 1995 Federal Highway
Act, USEPA l/M regulations, and the ECOS/EPA
program evaluation guidance, and to implement
possible program improvements.
• Begin data collection and analysis of program
effectiveness in order to demonstrate that emissions
credits identified in the SIP have been achieved.
USEPA R4 Role: Closely coordinate with EPD in l/M program
implementation providing guidance on national issues.
Provide assistance to develop technical specifications for
ASM testing. Review reports and provide assistance as
needed. Provide guidance and assistance to the State
regarding data collection, analysis and interpretation of
results.
4. Implement Reasonable Further Progress Requirements.
FPD Activity: Implement elements of EPD's 15% and 9%
reasonable further progress plans to reduce ozone
precursors.
12
-------
C. Pftrformanrfi Mpasnrpg
1. Status of participation in OTAG workgroup activities
and in the ongoing activities of the OTAG Southeast
Modeling Center.
2. Status of control strategy development for the Atlanta
ozone nonattainment area.
3. Submission, by mid-1997, of Atlanta area ozone
attainment plan approvable by USEPA R4.
4. Submission of an updated modeling protocol and
schedule outlining developments and milestones to be
achieved leading to ozone attainment plan submittal,
5. Submission of UAM results by Summer 1997.
6. Status of enhanced l/M program start-up.
7. Status of development of approvable evaluation
program for l/M program success.
8. Status of data collection and analysis of enhanced l/M
program effectiveness.
9. Status of implementation of EPD's 15% and 9%
reasonable further progress plans.
II. Maintenance of National Ambient Air Quality Standards (NAAQS1
The basis of all air quality planning is a good understanding of the
historical and existing air quality in the State. An adequate State-wide
monitoring network must be maintained to measure air quality levels, to
determine attainment status, and to plan for upcoming revisions to the
national ambient air quality standards.
13
-------
A. Goal: To obtain high quality data on air quality.
B. Objectives;
1. Maintain an EPA-approved State-wide ambient air
monitoring network.
EPD Activity: Ensure an adequate network size and high
quality data to adequately measure State-wide air quality.
Plan for particulate matter and revised ozone standard as
needed.
FPD Deliverable: Track trends of criteria pollutants and
summarize in the Annual Ambient Monitoring Report, which
will be submitted to USEPA R4 by July 1, 1997. This will
indicate network status and track ambient trends of criteria
pollutants.
USEPA R4 Role: Continue to provide technical assistance to
the ambient air monitoring program for the State. Review
proposed changes to the network and make the State aware
of changes to the monitoring regulations. Review ambient
data submittals to assure they meet USEPA data quality
requirements and provide regulatory interpretation of
applicable statutes.
C. Performance Measures
1. .Status of ambient air monitoring network and quality of
air data.
2. Submission of criteria pollutant trends in the Annual
Ambient Monitoring Report by July 1, 1997.
14
-------
III. Air Toxics
The air toxics emission standards resulting from the 1990 Clean
Air Act Amendments will have a major impact on regulated sources and
will result in a significant improvement in air quality state-wide.
A. Goal: A primary goal of EPD's Air Toxics activities is to
develop and implement a comprehensive program capable of
successfully implementing all State and Federal requirements
relating to both major and non-major air toxic sources. In
order to achieve this goal, EPD and USEPA R4 will pursue
activities and meet the pertinent objectives identified below
to ensure successful implementation of these controls and to
monitor their results.
Environmental Indicators: Reductions in air toxics resulting
from implementation of MACT standards.
B. Objectives:
1. Ensure full implementation of all Maximum Available
Control Technology (MACT) standards.
EPD Activities:
• Identify and provide early outreach efforts as much as
possible to educate and inform regulated sources
subject to Maximum Available Control Technology
(MACT) standards. This will increase compliance rates
and maximize positive air quality benefits.
• Identify, permit, and require controls of MACT sources
in accordance with MACT requirements and schedules.
EPD Deliverables: Quantify toxics releases and changes in
releases of MACT sources, and report status of MACT
15
-------
implementation and changes in releases to USEPA R4 by
October 31, 1997.
2. Ensure full implementation of all Section 112
infrastructure programs, including the 112(g) and
112(j) Case-by-Case MACT programs, the Early
Reductions Program, and the 112(r) Risk Management
Program for major sources.
EPD Activity: Identify and provide early outreach efforts as
much as possible to educate and inform regulated sources
subject to the identified infrastructure programs.
EPD Deliverable: Provide a list of affected sources and report
on outreach and implementation activities to USEPA R4 by
June 30, 1997.
USEPA R4 Role: Provide technical assistance, guidance, and
training as necessary to assist with effective implementation
of the infrastructure programs.
3. Implement State-wide ambient toxics network.
EPD Activity: Continue to phase in the start-up of an
ambient air toxics monitoring network. This network was
begun in 1995, and will be expanded with the addition of
new sites through 1998.
EPD Deiivfirahld: Beginning with the 1996 report, include
toxics network monitoring data in the Annual Ambient
Monitoring Report, to be submitted to USEPA R4 by July 1,
1997. This will indicate network status and track ambient
trends of monitored toxic compounds.
IJSEPA R4 Role: Assist EPD in selecting monitoring sites,
parameters, methods and quality assurance procedures, as
requested. Assist with peer review and data analyses, as
appropriate. Assist State in the use of air toxics data.
16
-------
C. Pflrformanpfi MeasnrPQ
1. Description and status of key activities underway to
implement MACT standards and other provisions of
Title III, including activities with the regulated
community, number of permits issued, etc.
2. Status of ambient air toxics network.
Compliance and Enforcement
A. Goal: To maintain an effective compliance and enforcement
program.
B. Objectives:
1. Use an inspection targeting strategy that focuses on
sources with a higher potential for noncompliance and
identifies industry sectors, locations, or rules where
additional compliance efforts are needed.
FPD Activities:
• Ensure implementation of the inspection targeting
strategy.
• Where appropriate, incorporate environmental justice
and pollution prevention into targeting and planning
activities. Participate in multimedia inspections to
target remediation, enforcement, and compliance
assurance activities.
• Support the acid rain program by conducting yearly
audits and/or reviews of 50% of the applicable
source's continuous emission monitoring (CEM) system
and CEM reports.
17
-------
• Continue to review notifications and conduct
inspections of the national emission standards for
hazardous air pollutants for asbestos (asbestos
NESHAP) activities. Take appropriate compliance and
enforcement actions to eliminate the potential for
public harm and provide sufficient deterrence to
discourage noncompliance activities.
EPD Deliverables:
• Provide a list of targeted inspections for FY 97 to
US EPA R4 by October 31, 1996.
• Maintain the AFS database with reliable and up-to-date
data, so that USEPA may assess the current state of
EPD compliance and enforcement activities whenever
needed for regional or national use. The level of detail
will be discussed and agreed upon between EPD and
USEPA R4.
USEPA R4 Roles:
• Continue to coordinate joint media specific and multi-
media inspections. Identify to EPD areas of federal
interest, cross-regional concern, and/or national
concern that may require USEPA or joint USEPA/EPD
compliance and enforcement activities or actions.
Discuss and work with EPD in setting these priority
areas and in determining the proper EPD/USEPA role in
these activities.
• Encourage EPD to use innovative compliance measures
and indicators that can be used to assess the state of
industry compliance, to evaluate the effectiveness of
compliance and enforcement activities, and to show
measurable benefits to the environment.
18
-------
• As early as possible, and to the extent practicable,
inform EPD of any activities planned which would
utilize federal authority to conduct compliance
assistance activities, inspections, and sampling
activities within the State.
• Continue to either provide or coordinate inspector
training courses. Develop and distribute training and
compliance assistance materials to EPD, as resources
allow.
2. Provide timely and appropriate enforcement actions for
significant violators.
EPD Activities:
• Continue to adhere to the goals of USEPA's Significant
Violator Timely and Appropriate (T&A) Guidance. Use
the Penalty Calculation Worksheet which has been
approved by USEPA R4 in determining appropriate
penalties and which will recover economic benefits
that are gained by sources through their violating
activities. Employ the T&A Guidance specific to
asbestos NESHAP violations and collect appropriate
penalties, including economic benefits due to
noncompliance.
• Promote pollution prevention by encouraging the use of
supplemental environmental projects (SEPs) for
enforcement actions where substantial penalties are
being sought. Such use will be reported to EPA
annually.
EPD Deliverables: In lieu of monthly conference calls, EPD
will meet quarterly with USEPA R4 to discuss compliance
and enforcement actions of a substantive nature, to provide
19
-------
a quarterly status report of activities associated with
compliance assistance and compliance assurance and
enforcement initiatives, and to discuss EPD and USEPA R4
roles and resources.
USEPA R4 Rnle; Assist with guidance and provide
information on comparable enforcement actions in other
states to insure that equitable treatment is administered
throughout the Region. Continue to retain the ability to
initiate federal enforcement.
C. Performance Measures
1. Status of implementation of inspection targeting
strategy.
2. Status of pollution prevention, multimedia and
environmental, justice-related inspection activities.
3. Status of acid rain audits.
4. Status of asbestos program implementation.
5. Status of data in AFS.
V. Permitting
A strong and effective permitting program is critical to ensure
compliance with air emission standards and to ensure proper
implementation of new rules, particularly air toxics rules. The permit
review process and the eventual air quality permit is a good mechanism
to prevent degradation of air quality.
A. Goal: Continue strong permitting program as mechanism to
prevent degradation of air quality.
B. Qhjertives:
20
-------
1. Implement Title V of the Federal Clean Air Act
Amendments of 1990, in accordance with the
EPA/State Title V Implementation Agreement. The
Agreement is negotiated on an annual basis and
delineates both USEPA and State roles and
responsibilities including deliverables. This Title V
Implementation Agreement is incorporated herein by
reference.
EPD Activities:
• Continue to implement an effective Title V permitting
program.
• Use outreach efforts as much as possible to identify
and assist Georgia industry and public interest groups.
EPD Deliverable: Negotiate a final Title V Implementation
Agreement with USEPA R4 by December 1, 1996.
USEPA R4 Role: Assist Georgia in outreach efforts and
provide EPD with an Intergovernmental Personnel Act (IPA)
assignment. This assignment will be renegotiated every six
months.
2. Maintain an effective and timely New Source Review
Permit Program.
EPD Artivity: Ensure timely review of major and minor
permit applications following State and Federal permitting
guidelines. Encourage pollution prevention alternatives
wherever possible during the application review process.
EPD Deliverable: Provide USEPA R4 with copies of PSD/NSR
(prevention of significant deterioration/new source review)
applications, preliminary determinations, and final permits.
21
-------
USEPA R4 Rnif>: Assist with guidance where requested,
particularly regarding national consistency in implementation
of Federal air emission standards.
3. Implement the Acid Rain Program in accordance with
the EPA/State Title V Implementation Agreement. The
Agreement addresses implementation of the Clean Air
Act's Title IV Acid Rain Program as part of the overall
Operating Permits Program.
EPD Dfilivprahlp/Activity: Track trends of acid rain indicators
such as precipitation pH in the Annual Ambient Monitoring
Report which will be submitted to USEPA R4 by July 1,
1997.
4. Implement an effective Federally Enforceable State
Operating Permit (FESOP) Program, including the
implementation of other programs designed to allow
potential Title V sources to opt out of the Program via
a federally enforceable mechanism (i.e., exclusionary or
permit by rule mechanisms).
EPD Activity: Ensure issuance of FESOPs in a timely manner
and provide adequate public participation including USEPA
R4 review of draft/final permits.
USEPA R4 Role: Provide timely review of draft permits and
assist the State in the resolution of complex permitting
issues. In order to reduce the State's burden of submitting
large volumes of information to USEPA R4 regarding
draft/final FESOPs, USEPA R4 will negotiate with the State a
reduced number of permits for review through the Title V
Implementation Agreement process.
C. Performance Measures
1. Status of Title V permitting program implementation.
22
-------
2. Status of new source review (NSR) permitting
program, including provision of copies of PSD/NSR
applications, preliminary determinations and final
permits to USEPA R4.
3. Status of Acid Rain Program, including submission of
Annual Ambient Monitoring Report.
4. Status of FESOP implementation.
23
-------
CHAPTER 3
WATER PROTECTION
General
This chapter sets out the commitments for EPD's Water
Protection Branch for Federal FY97. It also describes how state and
federal efforts will meet those commitments and how the State's
program performance will be measured. The Core Program
Commitments are derived from requirements in statutes, regulations,
standing legal agreements between USEPA and EPD, and National
Program Manager guidance. The commitments consist of jointly
established goals, objectives, indicators, activities, deliverables, and
performance measures. They are set out below to facilitate effective
environmental management and to form the legal basis for the
expenditure of federal grant funds. The commitments set out in this
chapter represent the work plan for Water Protection CWA Section 106
and 104 (b)(3), for purposes of EPD's Performance Partnership Grant
for FY 97.
Mission
The mission of the Water Protection Branch (WPB) is to protect and
enhance the waters of the State through effective monitoring,
allocation, regulations, and management of water resources in
accordance with State and Federal legislative mandates.
Principles
• Will strive to meet or exceed the statutory goals, requirements,
and deadlines of State and Federal legislative mandates;
• Will utilize strategic planning and a priority setting approach to
direct Branch efforts and to facilitate efficient, effective and
innovative uses of resources;
24
-------
• Will strive to provide a work environment that challenges
associates to be participating members of a coordinated team
effort;
• Will be open, flexible, and amenable to change;
• Will actively solicit input and participation from interested and
informed parties; and,
• Will foster a cooperative working relationship with US EPA and
other agencies.
• Will strive to utilize pollution prevention to meet programmatic and
enforcement goals.
CORE PROGRAM COMMITMENTS
Georgia has adopted a river basin management planning (RBMP)
approach to watershed protection, as defined in State law (O.C.G.A.
12-5-520), as passed by the Georgia General Assembly in 1992. The
law designated the Chattahoochee, Flint, Coosa, and Oconee Rivers as
the first basins to be addressed.
The law requires that each plan include a description of the basin or
watershed, identification of local governments in each basin, land use
inventories, and a description of plan goals, which may include
providing environmental education, improving water quality, reducing
pollution at the source, improving aquatic habitat, reestablishing native
species of fish, restoring and protecting wildlife habitat, and providing
recreational benefits. Descriptions of the strategies and measures
necessary to accomplish the goals are also to be part of each
management plan. The law also requires a seven-person local advisory
committee to be appointed to provide advice and counsel to EPD during
the plan development. The Georgia program includes both water
quantity and water quality and includes a significant effort to promote
stakeholder involvement.
25
-------
The surface water protection goal for Georgia is as follows:.
A. Goal: The long-term goal for the Water Protection Branch is to use
the 1994-95 305(b) report as a baseline and increase by 10% the
percentages of river miles, estuary acres, and lake acres fully supporting,
designated uses, by the year 2005.
Environmental Indicators
For lakes, rivers, and estuaries:
* Can you eat the fish/shellfish?
Public health criteria met for consumption of fish/shellfish.
* Can aquatic organisms live in the water?
Water quality standards are met which provide for the support of
aquatic organisms.
* Can you swim in the water?
Water quality standards are met to support recreation.
* Can you boat, canoe, wade in the water?
Water quality standards are met to support secondary contact
recreation.
* Is the water suitable for a drinking water supply after treatment
(for designated drinking water supplies)?
B. Ohjertives! EPD's primary objectives for the Water Protection
Branch are to perform the following 10 functions, in support of its
overall goal of increasing waters meeting their designated uses:
1. Monitoring - EPD will monitor facilities, discharges and waters
of the State to assess compliance with applicable laws, rules and
permits. This includes: (1) compliance inspections at permitted
facilities, (2) water quality monitoring programs to identify
problem areas, evaluate trends, and assess environmental and
26
-------
public health risks, and (3) coordination of Section 314 Clean
Lakes Grant projects.
FPn ArtivitiflS
• Conduct inspections at all major facilities and significant
minor facilities in each basin of focus in accordance with the
river basin management planning schedule.
• Conduct inspections of facilities with significant problems
which are outside the basins of focus.
• Conduct pretreatment inspections on significant industrial
facilities with approved pretreatment programs in the basins
of focus as resources are available.
• Sample and inspect all industrial users with state
pretreatment permits discharging into Publicly Owned
Treatment Works (POTWs) with an unapproved pretreatment
program during the fiscal year.
• Conduct audits and inspections of local pretreatment
programs in the basins of focus as resources are available.
• Conduct trend monitoring in the river basins of focus and
maintain a statewide perspective by conducting monitoring
at core stations across the state.
• Conduct intensive surveys in the river basins of focus
including model calibration studies, impact studies, studies
to document water quality conditions, and lake studies in
accordance with O.C.G.A. 12-5-23.1 as resources are
available.
• Conduct water quality monitoring in other basins as
appropriate in response to problem issues.
27
-------
• Conduct fish tissue monitoring in river basins of focus for
use in developing guidance on fish consumption.
• Coordinate ongoing Section 314 Clean Lakes projects for
Lakes Lanier, Allatoona, Walter F. George, and Carters, and
provide reports in accordance with grant requirements.
FPD Deliverable:
• Develop a plan to increase biological monitoring with
establishment of ecoregions and subregions and
corresponding reference areas for each ecoregion and
subregion.
2. Watershed Management - EPD will employ a watershed
management approach to address issues of water quality and to
conduct river basin management planning as resources are
available in accordance with O.C.G.A. 12-5-520.
FPD Activities
• Continue work in the Chattahoochee/Flint River Basins
(Group. 1). Tasks include initial drafting of basin plan, review
and edits, and initial public input in the review process.
Produce an initial draft basin plan for public review.
• Continue work in the Coosa/Oconee/Tallapoosa River Basins
(Group 2). Tasks include continuing the monitoring work
through the end of 1996, developing initial list of impaired
waters, prioritizing problem issues, and initial work on
evaluation and developing management strategies to address
priority issues.
• Continue work on the Savannah/Ogeechee River Basins
(Group 3). Tasks include reviewing available data and
finalizing and implementing the monitoring for the basin
group (monitoring year is 1997).
28
-------
• Initiate work on the Ochlockonee/Suwanee/Satilla/St. Mary's
River Basins (Group 4). Tasks include organizing a basin
team, securing nomination and appointment of a local
advisory group, and initial review of available information
and data.
3. Compliance Assuranrft/Enfnrrflment - EPD will resolve permit
violations in an effective and expeditive manner by initiating and
completing appropriate enforcement actions. EPD will ensure the
quality and reliability of Discharge Monitoring Report Data
submitted by permittees through active use of the Discharge
Monitoring Report Quality Assurance (DMR-QA) Program.
EPD Activities:
• Review Operation Monitoring and Discharge Monitoring
Reports for all assigned NPDES permitted facilities within 30
days of receipt.
• Follow EPD's Enforcement Management Strategy to resolve
permit violations in a timely manner.
• Take appropriate follow up actions to address analytical
laboratory deficiencies identified through USEPA's DMR-QA
Program.
• Continue to take appropriate actions to address SSOs.
• Submit any changes in the State Enforcement Management
System for review and approval.
USEPA R4 Rnlfls:
• EPA will assist with enforcement obligations as requested by
EPD including the enforcement of storm water permits in
basins of focus. EPA will follow its Enforcement
Management Strategy (EMS) with respect to this activity.
29
-------
• EPA will review timeliness and appropriateness of
enforcement actions identified through the Quarterly Non-
Compliance Report (QNCR).
• EPA will assist with attainment of pretreatment
commitments as requested by EPD.
4. Modeling - EPD will develop water quality models to support
water resource analyses and decision-making processes. This
includes development of total maximum daily loads (TMDLs),
wasteload allocations (WLAs), or other control strategies to
restore impaired waters or to protect high quality waters.
EPD Artivities
• Model and review wasteload allocations for point sources in
the basins of focus to support permit reissuance on a basin
wide approach.
• Model and review wasteload allocations for point sources as
needed for new or expanded discharges.
EPD Deliverables:
• Work with EPA to create a TMDL development strategy for
all 303(d) listed waters, as necessary.
• Work with EPA to provide a strategy to implement newly
developed and existing TMDL's.
• Complete the Chattahoochee River Modeling Project by
September, 1997.
• PPG/PPA Annual Report to include status on ongoing TMDLs
and EPD field assistance needs.
30
-------
• Update Georgia's Continuing Planning Process (CPP), in
accordance with recommendations provided by Region 4, by
the target date of June 30, 1997, or within 90 days of
receipt of comments and recommendations by EPA.
USEPA R4 Rnlfts:
• Utilize EPD assistance to fulfill both the TMDL development
and implementation strategies.
• Review TMDLs and approve/disapprove within 30 days of
submittal. If disapproved, EPA will develop and public notice
TMDL
• As requested by the State, EPA will formally review and
approve/disapprove TMDLs for waters not included in the
303(d) list.
• Provide recommendations to EPD on the draft CPP no later
than March 15, 1997.
• Support basin planning efforts by providing technical and
field assistance for monitoring and TMDL development,
participate in review process, provide program specific
national and regional guidance.
5. Permitting. EPD will process and issue in a timely manner,
NPDES permits, Industrial Pretreatment permits , and 401
Water Quality Certifications which are technically correct,
enforceable, and of high quality.
The existing Memorandum of Agreement (MOA) between EPD and
EPA Region 4 remains in effect. This PPA provides for the
following interpretive understanding of specific National Pollutant
Discharge Elimination System (NPDES) permit review requirements
31
-------
under Section III, Permit Review and Issuance. EPA retains the
right to request review of any permit in accordance with the
MOA.
FPD Activities
• EPD will reissue permits prior to permit expiration in
accordance with Water Protection Branch permitting
procedures and process new permit applications within 90
days of receipt of a complete application.
• EPD will continue the NPDES storm water program which is
based upon issuance of NPDES general permits.
• EPD will participate in the review of section 404 dredge &
fill plans and help identify new alternatives or options that
protect water quality.
EPD Deliverables:
• By November 30th, EPD will provide to EPA Region 4 a list
of all major and significant minor NPDES permits which EPD
intends to issue in FY 97 specifically indicating those located
within the basin(s) of focus. EPD will provide to EPA Region
4 on an ongoing basis, a list of all facilities subject to new
permit actions based on TMDL's for discharges to 303(d)
listed waters.
• EPD will send to EPA Region 4 all draft NPDES permit
actions, reissuances and issuances selected from the 303(d)
list (including accompanying rationale sheet, application and
WLAs) for Combined Sewer Overflow (CSO), MS4, and
general permits and draft major modifications of these same
permits.
• EPD will send to EPA Region 4 all draft and final minor
primary and minor permits selected for review.
32
-------
• EPD will develop a General NPDES permit for a specific
category of non-storm water discharges.
• EPD will ensure that all 404 projects comply with water
quality standards through the 401 certification process.
MSEPA R4 Roles:
• By December 30th, EPA Region 4 will submit to EPD a final
list of NPDES permits (from the November 30th list) for EPA
review in accordance with 40 CFR Section 123.24(d).
EPA's review of NPDES permits will be targeted toward the
basin(s) of focus and other select permits. At any time, EPA
may also select any permit from updated lists of facilities
subject to new permit actions based on TMDL's for
discharges to 303(d) listed waters.
• EPA will review, comment on, and consider for approval all
procedures used to develop and implement permitting
processes to address compliance with the Clean Water Act
goals of compliance with State water quality standards and
elimination of discharges of toxicity into surface waters.
• EPA Region 4 supports EPD's use of the streamlined
reapplication approach detailed in the "Interpretative Policy
Memorandum on Reapplication Requirements for Municipal
Separate Storm Sewer Systems," CFR 61, 155, August 9,
1996.
6. Rulfls and Regulations - EPD will ensure the Georgia Rules and
Regulations for Water Quality Control clearly and accurately define
how State and Federal water quality laws will be implemented.
EPD Dftlivftrahlfts:
• Adopt water quality standards for Lake Jackson and Lake
Walter F. George.
33
-------
• Complete the triennial review of Water Quality Standards
and adopt new standards.
7. Nnnpnint Snurrfis - EPD will address nonpoint sources (NPS) of
pollution from agricultural, urban and commercial forestry sources.
EPD will coordinate and manage Section 319 Grant funds and
implement programs to control, abate and prevent NPS pollution.
FPD Dflliverahlfis:
• Continue coordination of approximately 90 contracted 319
projects.
• Continue the Georgia Adopt-A-Stream project and develop
an Adopt-A-Wetland Program.
• Continue the Nonpoint Source Education Project.
• Continue to work with the Georgia Soil and Water
Conservation Commission and the Georgia Forestry
Commission on the agricultural and forestry nonpoint source
programs.
• Assist DNR in the purchase of sensitive lands through
Rivercare 2000 project utilizing 319 grant funds.
8. Engineering and Technical Assistance - EPD will ensure that
wastewater systems in Georgia are planned, designed,
constructed in accordance with acceptable engineering practices.
FPD Dflliverahlfis;
• Perform reviews of engineering documents and active
coordination of comments and recommendations with design
engineer.
34
-------
• Perform reviews of biosolid management plans and active
coordination of comments and recommendations with
planner.
• Continue 205(g) construction grants closeout strategy.
• Perform biddability, constructability, reviews, inspections,
change order and pay request management and other
construction management functions with GEFA.
• Develop guidelines for sludge handling systems.
• Conduct updated and revised guidelines for LAS, drip
irrigation, urban reuse.
• Provide real-time support to local governments and their
engineering consultants.
9. Public Involvement - EPD will promote public involvement in
activities of the Water Protection Branch.
EPD Activities:
• Issue press releases and hold public meetings, as needed to
inform the public.
• Implement the 5th annual River Clean Up program.
• Form the River Basin advisory groups and hold stakeholder
meetings in the basins, as appropriate.
• Distribute copies of the 305(b) report to the general public.
10. Data Management - EPD will manage data in an efficient and
effective manner.
35
-------
FPn Activities:
• EPD will maintain the Permit Compliance System (PCS)
national database and will store monitoring data in STORET
or a STORET-compatible format.
EPD Deliverables:
• Upload into PCS all Water Enforcement National Database
elements.
• EPD will maintain PCS-DMR data entry at a 95% level or
better during FY 97.
Additional USEPA R4 Roles
USEPA Region 4 will assist EPD in performing the following
activities for FY 97.
• Environmental Indicators development and GIS support
• Provide contractor assistance in the river basin framework
development process.
• Review annual reports; provide guidance.
• Provide guidance and assistance on Clean Lakes studies.
• Review/approve final Clean Lakes Study reports.
C. Performance Measures:
The following measures will be reported by EPD through PCS or
other means:
36
-------
r.nmpliance
1. Major non-municipals, municipals, and federal facilities in
Reportable Non-Compliance (QNCR) during FY 97.
2. Number of DMR/QA follow-up actions and "State Judicial
Actions" report forms for FY 97.
3. Identify POTWs that met criteria for Reportable Non-Compliance
during FY 97 and track formal enforcement actions on the QNCR.
4. Number of categorical industrial users in non-pretreatment cities
and those in significant non-compliance (Categorical Industrial
Users Moving Base Form).
Permits, Individual Municipal and Cnmhined Sewer Overflows (Non-
Storm Water} & Individual Municipal Facilities (Storm Water)
5. # of major municipal, minor municipal, MS4, and CSO permits
issued, reissued, expired.
6. # of major municipal, minor municipal, MS4 and CSO permits for
which evidentiary or administrative hearing requests have been
received.
Permits, Individual Industrial (Storm Water Only) & Permits designated
under Clean Water Ant 5407(pH2He) (Storm Water)
7. # of industrial storm water permits and permits designated as
storm water under CWA §402(p)(2)(e) issued, reissued, expired.
8. # of industrial storm water facilities and those designated as
storm water under §402(p)(2)(e) for which evidentiary or
administrative hearing requests have been received.
Permitsf General (Storm Water Only) & Industrial Facilities (Non-Storm
Water)
9. # of general storm water permits issued and non-storm water
general permits issued for industrial facilities.
10. # of non-construction facilities & construction activities covered
by storm water general permits, and # of industrial facilities
covered by non-storm water general permits.
37
-------
Permits Individual Industrial Facilities (Non-Stnrm Water)
11. # of major/minor industrial permits issued, reissued, expired.
12. # of major/minor industrial permits for which evidentiary or
administrative hearing requests have been received.
Watershed Protection
13. Status of the state's implementation of the watershed
management approach.
38
-------
CHAPTER 4
PUBLIC WATER SYSTEM SUPERVISION
AND GROUND WATER PROGRAMS
In Georgia, ground water protection is accomplished through the
joint efforts of the state Geologic Survey and EPD's Drinking Water
Program. Drinking water protection activities are implemented by EPD's
Drinking Water Program.
This chapter sets out the partnership's commitments for Georgia's
drinking water and ground water protection programs for Federal FY 97.
It also describes how state and federal efforts will meet those
commitments and how the State's program performance will be
measured. The chapter identifies Core Program Commitments for
EPD's Drinking Water Program and the state Geologic Survey. These
Core Program Commitments represent requirements in statutes,
regulations, standing legal agreements between USEPA and EPD, and
National Program Manager guidance. The commitments consist of
jointly established goals, objectives, indicators, activities, deliverables,
roles and performance measures. They are set out below to facilitate
effective environmental management and to form the legal basis for the
expenditure of federal grant funds. The commitments set out in this
chapter represent the CWA Section 106 and SDWA Sections 1443(*a)
and 1451 (a)(3) work plans for the purposes of EPD's Performance
Partnership Grant for FY 97.
I. Drinking Water Program (Public Water System Supervision)
A. Goal: By 2005, the population served by community water
systems in violation of health requirements will be reduced to 5
percent.
B. Ohjectivfis:
1. Monitoring Activities - Monitoring of water produced by
public water systems in accordance with the Georgia Rules
for Safe Drinking Water and comparable federal regulations
39
-------
is one of the essential functions of a state drinking water
program.
ppn Antivity; Will ensure that public water systems
continue to monitor their systems for all (microbiological,
chemical, radioactivity and unregulated) contaminants that
are required by state and federal safe drinking water laws,
rules/regulations.
FPD Deliverable: Provide EPA with monitoring, reporting and
maximum contaminant level violations each quarter, and
other reports as needed.
1JRFPA R4 Rnlfis:
•- Review and streamline State reporting requirements,
where possible.
• Actively participate in analyzing/integrating geographic
and PWSs data to support monitoring of risk based
targeted areas.
2. System Permitting/Lahoratory Certification - Although
permitting public water systems to operate is a requirement
of the Georgia Safe Drinking Water Act of 1977 and not a
federal requirement, the permit is the legal basis for most
enforcement activities. All systems that meet the definition
of a public water system must be permitted.
Laboratories that examine regulated drinking water samples
are required by the Federal Safe Drinking Water Regulations
(40 CFR 141.28) to be certified by the EPA or the state if
the state has primacy. EPD's drinking water laboratory
certification program inspects all bacteriological laboratories,
but uses a third party accreditation process to certify
chemical laboratories.
40
-------
FPD Activities:
• Will issue and reissue permits after an engineering
assessment of the physical facilities and operational
review. Special conditions and schedules of
compliance will be included when applicable.
• Will issue certificates to laboratories that pass on-site
inspections and have acceptable results on
performance evaluation (PE) samples for contaminants
for which the laboratory request approval. Certificates
will be issued for a maximum of 3 years.
EPD Deliverables:
• Permits will be issued within 30 days after engineering
assessment and operational review is received.
• Laboratory certification will be processed within 45
days after receipt of an acceptable inspection report
and satisfactory results of PE monitoring.
US EPA R4 Role: EPA Region 4 will continue to certify the
State Principal Laboratory once every three years; coordinate
the EPA Water Supply Performance Evaluation Studies which
provide performance samples to the certified laboratories;
and, provide technical assistance to the State Principal and
State Certified laboratories as requested.
3. Technical Assistance and Engineering Activities'-
Engineering assessments and technical assistance will help
minimize compliance problems later and are essential to a
quality program. This assistance will help ensure that
drinking water systems in Georgia are planned, designed,
constructed and operated in accordance with acceptable
engineering standards and systems operation meets
minimum standards.
41
-------
EPD Activity: Will provide coordinated engineering and
regulatory reviews of engineering documents to assure that
chosen design alternatives are technically appropriate, well
engineered and feasible for implementation. Will also
provide technical assistance to public water systems to help
optimize treatment processes in order to comply with the
surface water treatment rules, lead/copper rules, and others.
EPD Deliverable: In an annual report, provide EPA a
summary of the activities, including engineering reviews,
approvals and source approvals, including new or expanded
water supply reservoirs for community water systems and a
summary of technical assistance.
USEPA R4 Role Assist EPD as needed in areas of technical
assistance and engineering activities.
4. Compliance Assurance Activities - EPD operates and
maintains an aggressive program of public water system
surveillance, outreach, and technical assistance for the
water industry and general public and works closely with the
regulated facilities to improve the compliance of public water
systems with state and federal drinking water regulations.
EPD Activities:
• Will expeditiously address all acute health concerns
and/or violations of acute Maximum Contaminant
Levels (MCLs) and take appropriate action, including .
enforcement when necessary, to prevent recurrence.
Priority is given to enforcement of the Total Coliform
Bacteria Regulations and the Surface Water Treatment
Rule. Large water systems will be addressed first.
• Continue to develop and implement an Enforcement
Management System.
42
-------
• State and Federal Managers shadow exchange program
for up to one week.
FPn Dftlivfirahlfts:
• Negotiate the universe of Significant Non-Compliers
(SNCs) for the Target Setting Process (Fixed Base) that
will be appropriately addressed by EPD by the end of
the second quarter of the fiscal year.
• Submit to EPA a summary of enforcement actions
taken within 45 days after the end of each quarter.
• Provide to EPA an annual report on efforts regarding
compliance with the Ground Water Under the Direct
Influence of Surface Water (GWUDI) determinations
and follow-up activities.
USEPA R4 Roles
• EPA retains its role to initiate federal enforcement if
requested by the State or should the State be unable or
unwilling to conduct timely and appropriate
enforcement for SDWA violations.
• Assist in evaluating compliance trends and provide
feedback on compliance trends and enforcement
activities.
• State and Federal Managers shadow exchange program
for up to one week.
• Conduct up to 10 on-site joint inspections/sanitary
surveys. These efforts may be redirected to
deliverables listed under Risk-based targeting.
43
-------
• Provide annual and quarterly lists of systems
determined to be significant non-compliers.
• Negotiate the universe of SNCs for the Target Setting
Process that will be appropriately addressed by the
State by the second quarter of the fiscal year.
• Provide on-site EPA support to EPD up to one month
providing compliance assistance.
5. Data Management - EPD will manage data related to the
public water system supervision program in accordance with
40 CFR Parts 141 and 142.
EPD Activity: Actively participate with EPA in resolving data
discrepancies between the State and Federal database to
ensure national data quality for responding to Congressional
and public inquiries, calculating the State's continuing
program grant, and tracking national drinking water public
health trends.
EPD Deliverable: Submit to and advise EPA Region 4 in the
prescribed format, public water system inventory, violation,
and enforcement action updates within 45 days following
the end of a quarter.
USFPA R4 Roles:
• Building on activities completed in FY 96, continue to
review Summary and Error reports, as requested by
State, to assist in determining programmatic and/or
systematic obstacles that impede the upload process.
• Inform State of SDWIS/FED systematic problems that
may impact the effectiveness of State data submittal
and/or data quality.
44
-------
• Assist in quality assurance/quality control of regional
and national data by pulling and analyzing reports of
State actions and violations in SDWIS.
• Provide a forum for communicating data issues for
resolution including conducting quarterly management
level meetings.
• Provide priority data discrepancy reports as they relate
to regional and national data quality initiatives.
6. Risk Rased Targeting Issues - Cryptosporidium Strategy:
Develop and implement a strategy to protect drinking water
from Cryptosporidium and other related microbes.
FPD Antivity: Will continue to provide leadership for a multi-
agency task force developing a strategy for implementation
of a plan to protect drinking water from microbes of this
nature.
EPD Deliverable: A final plan to handle issues related to
Cryptosporidium and other microbial contamination. The
plan would include emergency procedures that would be
implemented by EPD, the Department of Human Resources,
and/or the Department of Agriculture in the event of a
bottled water problem. Standardized or pre-prepared news
releases would also be part of the project.
IJSEPA R4 Rnles:
• Assist the State in development and implementation of
the Cryptosporidium Strategy by providing technical
support, as needed.
• Receive and comment on plan.
45
-------
• Assist in the development of standardized news
releases.
7. Water Conservation - New permit applicants for water
use of 100,000 or more gallons per day and existing
withdrawal permit holders requesting an increase in
withdrawal for public drinking water are required to develop
comprehensive water conservation plans in accordance with
EPD guidelines. The plans address such categories as;
unaccounted-for-water, metering, plumbing codes, water
shortages, water reuse planning, public education, etc. The
guidelines also require water systems to: submit water
conservation progress reports, water use data (every five
years), and unaccounted-for-water data (annually); and to
reduce water demand through the implementation of
proactive water conservation measures incorporated into
long term water supply planning.
EPD Activity: Will work with the local governments to
ensure the requirements are adopted and enforced in order to
remain eligible for state grants or loans for water supply
projects.
EPD Deliverable: Provide EPA, in an annual report, a
summary of activities which include a summary of
presentations made in local/regional meetings and
conferences for education and dissemination of information
concerning water conservation.
USEPA R4 Role;
• Receive and review annual report.
8. Cross-Connection Control Program - This is an ongoing
program to prevent drinking water supplies from being
connected to unapproved sources or any contaminant from
46
-------
entering the public water system which would pose a health
threat.
EPD Activity: Will complete notifying all public water
systems serving 10,000 people or more to review and
update their current program and participate in educational
seminars and workshops.
EPD Deliverable: Complete review of 50% of the updated
plans and inform EPA about EPD's progress in an annual
report.
MSFPA R4 Role: Receive and review annual report.
9. Small System Strategy as related to Compliance -
Historically, small water systems that serve less than 1,000
people have had the most difficulty complying with the Safe
Drinking Water Rules/Regulations, because of many factors
including financial stability of the ownership, operator
training, and others.
EPD Activity: Will address one factor that is critical in
improving the quality of operation of small systems -
operator training and certification. Operator training will be
addressed through our formal enforcement process by
requiring systems in violation to employ an operator that is
licensed by the State.
EPD Deliverable: Improvement in the operator license
program for small water systems.
USEPA R4 Role: Assist the State in development and
implementation of the Small System Strategy. Devoting
20% of a Full Time Employee to this activity.
47
-------
II. Ground Water Protection Program
A. final: By 2005, increase to 50% the percentage of the
population served by community public water supply wells that
have wellhead protection programs in place.
B. Qhjectives:
1. Ground Water Protection and Monitoring
FPD Activities:
• Will continue to maintain the Ambient Groundwater
Monitoring Network which measures the long term
trends in groundwater quality.
• Will continue to maintain a ground water quality
database and provide data entry to EPA's STORET
database.
• Will have in place a fully functioning Groundwater
Protection Coordinating Committee comprised of
representatives of agencies involved with ground water
quality protection to assist in implementing the state's
EPA endorsed core Comprehensive State Ground Water
Protection Program (CSGWPP).
• Will continue to require that the installation, sampling,
and abandonment of geological or engineering
boreholes and monitoring wells be under the direction
of a Professional Engineer or Professional Geologist
registered to practice in Georgia.
• Will commit to the continuation and expansion of a
saltwater monitoring network for southeast Georgia
due to the threat of salt water intrusion. Additional
48
-------
wells will be constructed where needed and monitored
for chlorides.
EPD Deliverables;
• Generate laboratory data sheet for each well sampled
as part of the Ambient Groundwater Monitoring
Network. Enter the analytical results into EPD's Prime
database which will be uploaded to EPA's STORET
database.
• Report on the results of the saltwater monitoring
network.
• Information submitted for the 305(b) Report as
required.
• Provide products that demonstrate implementation of
the Core CSGWPP.
• Provide Geographic Information System (GIS)
databases that interrelate potential pollution sources to
underground sources of drinking water and known
point sources of pollution in the Chattahoochee/Flint
river basin.
• Provide summary report covering development of all
GIS databases and make databases available to EPA
electronically.
USEPA R4 Rnlfis:
• Provide appropriate grants and program guidance.
• Provide timely reviews and feedback on deliverables.
49
-------
Provide technical assistance to the state as requested
and as available.
• Coordinate with other Regional programs in responding
to ground water related flexibility requests.
2. Source Water/Wellhead Protection Activities
EPD Antivity: Will commit to completing approximately 50
Wellhead Protection Plans (WHPPs) (representing
approximately 120 wells) per year. Ten percent of the
WHPP's will be focused in low income and/or minority
communities.
EPD Dfilivfirahlfts:
• Report the percent (%) of wells covered by wellhead
protection plans on a yearly basis. This percentage will
be reported as the number of wells protected by
wellhead protection compared to the number of total
public water supply wells in the drinking water system.
• Report the percent of the population served by
community public water supply wells that have
wellhead protection plans in place on a yearly basis.
• Information submitted for the Biennial Wellhead
Protection Program Report.
USEPA R4 Roles:
• Provide appropriate grants and program guidance.
• Provide timely reviews and feedback on deliverables.
• Technical assistance to the state as requested and as
available.
50
-------
• Assist the State in outreach and education activities.
C. Performance Measures
EPA Region 4 and EPD will jointly review and evaluate the
progress of the activities committed to in this Chapter. Progress
evaluation shall be used as the PWSS and ground water
performance measures. EPD will report on FY 97 progress toward
meeting the Drinking Water Program and Ground Water Protection
Program goals for 2005.
51
-------
CHAPTER 5
HAZARDOUS WASTE
General
The purpose of this chapter is to set out the commitments for
Georgia's hazardous waste management program for Federal FY-97. It
also describes how state and federal efforts will meet those
commitments and how the State's program performance will be
measured. The chapter identifies Core Program Commitments for
EPD's Hazardous Waste Management Branch (HWMB). These Core
Program Commitments represent requirements in statutes, regulations,
standing legal agreements between USEPA and GADNR/EPD, and
National Program Manager guidance. The commitments consist of
goals, objectives, activities, deliverables and performance measures.
They are set out below to facilitate effective environmental
management and to form the legal basis for the expenditure of federal
grant funds. The commitments set out in this chapter represent the
work plan for the Georgia Hazardous Waste program (generation and
management) for purposes of EPD's Performance Partnership Grant for
FY97.
As noted above, the Core Program Commitments consist of goals,
objectives, activities, and performance measures. With regard to
performance measures in particular, the HWMB of EPD has developed
and reformed the framework by which it is evaluated and reports its
performance. The purpose of this framework is to improve
environmental performance and more effectively link goals and
achievements with positive environmental results. The environmental
performance measures identified below allow for the evaluation of the
effectiveness of Georgia's Hazardous Waste Program and reduce the
administrative burden and cost by reducing overall number of tracking
elements. Emphasis has been shifted to measure environmental
outcomes with less emphasis on traditional reporting measures of input
52
-------
and activity. The use of the goals and their associated objectives and
activities also provide the program with greater flexibility to apply
resources to pressing environmental problems and multimedia responses
to targeted areas.
CORE PROGRAM COMMITMENTS
I. Reduction of Hazardous Waste Generation
A. Goal: Reduce hazardous waste generation in Georgia.
* Environmental Indicator: volume of hazardous waste
generated.
B. Ohjectives:
1. Inspect 20 percent of large quantity generators and all the
treatment, storage and disposal permittees.
EPD Activity: Conduct inspections of 20 percent of large
quantity generators and all the treatment, storage and
disposal permittees to specifically evaluate efforts and
progress toward performance goals certified in their
Hazardous Waste Reduction Plans required by State law.
Inspections will focus primarily at generators whose waste
streams include constituents determined by EPD to be
persistent, bioaccumulative and/or toxic (PBT). State will
update its existing PBT identification strategy.
USEPA R4 Rnlft: Overview at least 5 percent of the
inspections conducted and provide timely comments
regarding findings to the HWMB Chief. Provide technical
assistance to EPD on identification of PBTs in RCRA
hazardous wastes.
53
-------
2. Compile report from data gathered from CY-1995 Biennial
Hazardous Waste Reports filed with EPD.
FPD Activity: The biennial report data will be analyzed to
determine statewide trends in hazardous waste generation
and progress made in reducing hazardous waste generation
and to guide future Branch activities on hazardous waste
reduction, compliance monitoring, and technical assistance
activities. A report will be compiled from data gathered
from Biennial Hazardous Waste Reports filed with EPD. Data
and analysis compiled and evaluated by EPD will be provided
to the public in a user friendly biennial report. The contents
of the report will be summarized in the form of tables,
diagrams and/or graphs. The trend analysis will include
identification of RCRA waste codes, process residuals, PBT
waste and wastewater.
USEPA R4 Role: Review a draft of the biennial report and
discuss emerging trends with EPD.
3. Prepare an annual report to evaluate the progress made
during the year towards achieving the goals identified in the
Hazardous Waste Reduction Plans.
FPD Activity: An annual report will be prepared and
available to the public which lists the inspections performed
to evaluate the progress made during the year towards
achieving the goals identified in the Hazardous Waste
Reduction Plans. The report will identify opportunities for
enhancing the quality of future inspections. A copy of each
trip report that details the findings of the inspection and any
resulting correspondence to the generator will be available to
the public and USEPA R4.
USEPA R4 Rnlft: Review draft of the annual report.
4. Reduce presence of bioaccumulating and toxic constituents
in hazardous waste by 50 percent by the year 2005.
54
-------
FPD Activity Develop strategy for implementing the Waste
Minimization National Plan in Georgia over the next ten
years. EPD supports the goals expressed in the Waste
Minimization National Plan. However, insufficient specificity
exists in the national plan to implement it. During FY-97,
EPD will select a baseline year from which we can measure
success and will further develop our existing state strategy
in identification of PBT wastes.
C. Performance Measures:
1. Percentage of inspections completed for the large quantity
generators and the treatment, storage and disposal
permittees to evaluate efforts and progress toward
performance goals certified in Hazardous Waste Reduction
Plans.
2. Status of biennial report on trends in hazardous waste
generation and progress made in reducing such generation.
3. Status of annual report listing inspections and evaluating
progress made towards achieving goals identified in the
Hazardous Waste Reduction Plans.
4. Status of strategy for implementing Waste Minimization Plan
in Georgia over the next ten years.
5. Report in numerical terms what volume of PBT wastes was
generated in CY-95 versus the baseline year.
II. Assure the Safe Management of Hazardous Waste
A. Goal: To assure the safe management of hazardous waste
generated by Georgia businesses, industries, and
governmental sectors.
55
-------
B. Objectives;
1. Conduct annual inspection of 20 percent of large quantity
generators, 1 percent of small quantity generators and all
treatment, storage and disposal facilities.
EPD Activities
• Conduct annual inspection of 20 percent of large quantity
generators, 1 percent of small quantity generators and all
treatment, storage and disposal facilities to determine
compliance with the rules under the Georgia Hazardous
Waste Management Act (GHWMA). Off-site commercial
handlers will be inspected a minimum of once every six
months. Inspections will focus on the generation, physical
handling, and management of hazardous waste. Special
emphasis will be placed on determining whether the facility
is taking steps to eliminate or minimize releases of hazardous
waste into the environment. Inspections will also be
performed for suspected non-notifiers, for complaints
received, and used oil facilities to assure that wastes are not
illegally dumped, burned, or mismanaged. Provide USEPA
with planned list of inspections by November 15, 1996.
• Take appropriate follow-up action in response to violations
discovered consistent with the state's updated enforcement
procedures.
• Documentation of the inspections will be provided in a trip
report maintained in the HWMB files. Notices of violation
and executed orders will be copied to USEPA R4 and made
available to the public. Notify USEPA promptly of significant
violations at off-site TSDs.
• Update Enforcement Procedures by December 1, 1996 and
submit to USEPA for review.
56
-------
• Prepare a report which identifies the number of generators
and treatment, storage and disposal facilities inspected that
are properly handling hazardous waste (i.e., not dumping or
burning hazardous waste illegally).
• Overview at least 5 percent of the inspections. Be
available to assist in inspections, enforcement, and technical
support when requested by EPD. Review revised
Enforcement Procedures and provide comments or approval.
2. Issue, deny, revoke, or modify hazardous waste permits to
RCRA treatment, storage and disposal permittees as required
by law. Review, approve or disapprove of closure plans for
RCRA treatment, storage and disposal facilities.
FPD Activities
• We expect to shift resources from our historical permitting
efforts to hazardous waste reduction, corrective action
activities, and expanded technical assistance activities. This
shift is due to the fact that the vast majority of all RCRA
treatment, storage and disposal facilities have already been
permitted; few remain in interim status. Permitting and
closure activities will focus on treatment, storage and
disposal facilities recently brought under regulation and
modification or reissuance of existing permits.
• Maintain a current "pending" list of permit and closure call-
ins and permit modification requests until final
determinations are made. Maintain a current annual list of
permits issued, denied, revoked, or modified. Maintain list
of current closure plans called in, approved or disapproved.
Provide this information on as requested basis to the public
and USEPA.
• By November 15, 1996, submit to USEPA Region 4 the
lists of pending and anticipated permitting and closure
activities. Indicate which of these activities are anticipated
57
-------
during FY-97. Submit a complete treatment, storage and
disposal facility universe list to USEPA by November 15,
1996.
• Review proposed permit decisions for selected draft
permits and provide comments. Provide technical assistance
on permitting issues when requested. Provide on-going
training to permit writers. Assist EPD in BYP permit and
closure planning.
3. Participate in selected multimedia community, sector, and/or
environmental based initiatives.
EPD Activity: Prepare a final report describing activities,
focus, and conclusions on such initiatives. Continue on-
going state activities in support of the Brunswick initiative.
Discuss future plans in subsequent fiscal years with USEPA
and any affected border states.
4. Ensure controls are in place for hazardous waste combustors
(to destroy hazardous constituents in waste and reduce
emissions).
EPD Activity: Issue, deny, modify, or revoke permits for
hazardous waste combustion facilities consistent with the
USEPA National Combustion Strategy.
USEPA R4. Rnlft: Provide guidance and technical assistance
as requested, and provide review of selected draft permits.
C. Performance Measures:
1. Percentage of inspections planned in II.B. above that are
completed for large quantity generators, small quantity
generators, and all treatment, storage and disposal facilities
to determine compliance with RCRA rules.
58
-------
2.
Number of inspections performed for suspected non-
notifiers, for complaints received, and for used oil facilities.
3. The report identifying number of generators and treatment,
storage and disposal facilities properly handling hazardous
waste.
4. Incremental progress in issuing, denying, revoking or
modifying hazardous waste permits. Incremental progress in
certifying closure or in issuing post-closure permits or orders
to the currently identified land disposal universe. Percentage
of treatment, storage and disposal facilities universe with no
permit or closure issues pending.
5. Status of participation in selected multimedia community,
sector, and/or environmental based initiatives. Status of
final report describing these activities.
Site Clean-Up
A. Goal: Cleanup of sites where releases of hazardous
constituents threaten human health and the environment.
B. Ohjertive:
Facilitate and encourage the cleanup and/or adequate control
of RCRA land disposal facilities and solid waste management
units through implementation of removal, treatment,
stabilization or containment remedies for contaminated
source material and contaminated media. Compel interim
measures, as necessary, prior to finalization of complete
facility-wide remedy to insure protection of human health
and the environment.
EPD Activities:
• Identify sites in the RCRA cleanup universe. By November
1 5, 1996, provide USEPA with lists showing the status of
59
-------
corrective action activities at all RCRA treatment, storage
and disposal facilities in the cleanup universe. Explain what
corrective action activities are anticipated during FFY-97.
•Track the number of risk assessments submitted to EPD for
review by RCRA facilities. Review risk assessments on a
prioritized basis.
• Take necessary action to ensure the completR assessment
of the rate and extent of contamination from all regulated
units and significant solid waste management units at RCRA
facilities in the existing universe (as of October 1, 1996) by
the end of FY-2002.
• Approve initial corrective action systems (or determine
corrective action is not needed) at all RCRA facilities in the
FY-96 corrective action universe by the end of FY-2003.
• At all RCRA treatment, storage and disposal facilities
where Environmental Indicator (El) evaluations show
probable human exposure, initiate stabilization or interim
measures to address the exposure within one year of
discovery.
• At all RCRA treatment, storage and disposal facilities
where Els show uncontrolled groundwater releases have
migrated off-site or into significant areas of groundwater
use, ensure corrective action system is initiated by the end
of FY-1999.
•Approve final facility-wide corrective action plans for the
existing FY-97 universe by the end of FY-2005.
• Evaluate the effectiveness of existing corrective action
systems at RCRA facilities and require modifications to
systems when needed. Regulated units will be evaluated
semi-annually and SWMUs will be evaluated annually.
60
-------
• Prepare a report by the end of FY-97 that depicts the
current status of the RCRA corrective action universe with
respect to the first objective above. The report will also
include the volume of groundwater treated annually and the
volume of source material removed and/or contained and a
discussion of the effectiveness of existing corrective action
systems.
IJSEPA R4 Role: Provide a written statement of findings
regarding the performance indicated by the annual report;
the finding may be made available for enforcement or
technical assistance as requested by EPD.
C. Performance Measures:
1. Status of efforts to identify sites in the RCRA
corrective action universe.
2. Percentage of risk assessments reviewed versus
submitted.
3. Percentage of sites progressing towards the sub-
objectives in B.2.-7. above.
Industry and Puhlic Outreach
A. Goal: Provide industry and public outreach on hazardous
waste management issues.
B. Qhjertives:
1. Develop and implement at least one EPD compliance
assistance/education outreach program for a small business
sector.
61
-------
EPD Activities
• Development, technical support, and implementation for at
least one EPD compliance assistance/education outreach
program for a small business sector including preparation
and distribution of a hazardous waste educational package
tailored for the sector.
• Prepare a final report detailing activities of HWMB in the
compliance assistance/education outreach program.
• Hire a Community Outreach Facilitator to assist citizens in
understanding hazardous site issues, including remediation.
Time will be split between RCRA/CERCLA/HSRA sites.
USEPA R4 Role: Review draft hazardous waste educational
program and package and provide comments back to EPD.
Provide technical assistance as needed.
2. Design and implement a "White Hat" inspection program for
hazardous waste handlers that are defined as small
businesses who request a compliance assistance inspection
from EPD.
EPD Activity: Prepare first draft of "White Hat" inspection
program by January 1, 1997 and submit to USEPA R4 for
comment. Implement "White Hat" program by
April 1, 1997.
USEPA R4 Role: Review, comment, and participate in draft
"White Hat" inspection program.
3. Hold informal meetings with citizens, public meetings and
public hearings. Hold meetings with the regulated
community.
62
-------
fpd Activity: Conduct and participate in informal meetings
with citizens, public meetings and public hearings and
conduct and participate in meetings with the regulated
community. Report the number of meetings attended and
the results of the meetings.
HSFPA R4 Rnle: Participate in meetings when
requested by EPD.
C. Performance Measures:
1. Status of implementation of at least one EPD compliance
assistance/education outreach program for a small business
sector, including the number and percentage of facilities
assisted and reached by EPD efforts.
2. Status of final report detailing activities of HWMB in the
compliance assistance/education outreach program.
3. Status of "White Hat" inspection program design and
implementation.
4. Status of public meetings with citizens and regulated
community.
V. State Authorization
• EPD will continuously update the Rules for Hazardous Waste
Management by drafting annual amendments that
encompass the final federal RCRA analogues.
• EPD will continue to provide notice to EPA of new legislation
effecting the state RCRA program.
• EPD will seek continuous authorization to operate RCRA
program in lieu of federal program.
63
-------
MOA/RCRIS Reporting
The existing Memorandum of Agreement (MOA) between EPD and
USEPA R4 remains in effect. EPD commits to adhere to national
reporting requirements and to maintenance of the RCRIS national
database as set forth in the MOA. USEPA R4 and EPD will jointly
negotiate changes to the MOA on an annual basis, or as
necessary.
64
-------
CHAPTER 6
UNDERGROUND STORAGE TANKS (USTs)
General
The quality of surface and ground water in Georgia affects human
health, ecology and quality of life. The Underground Storage Tank
Management Program's (USTMP's) primary goal is to protect the quality
of Georgia's groundwater and surface water and to ensure both human
and ecological health through elimination of releases of regulated
substances from leaking USTs. This is accomplished through the
improvement of UST management and by providing education and
assistance to tank owners/operators, thereby preventing such releases.
This Chapter sets out the partnership's commitments for Georgia's UST
programs for Federal FY 97. It also describes how state and federal
efforts will meet those commitments and how the State's program
performance will be measured. The chapter identifies Core Program
Commitments for EPD UST Program. These Core Program
Commitments represent requirements in statutes, regulations, standing
legal agreements between USEPA and EPD, and National Program
Manager guidance. The commitments consist of jointly established
goals, objectives, indicators, activities, deliverables, roles and
performance measures. They are set out below to facilitate effective
environmental management and to form the legal basis for the
expenditure of federal grant funds. The commitments set out in this
chapter represent the UST SWDA Sections 2007 (f)(2) workplans for
the purposes of EPD's Performance Partnership Grant for FY 97.
I. Reduction in Confirmed Releases - One of the main goals of the
program is to reduce the number of confirmed releases to ground
water, surface water, drinking water sources or any other
receptors.
A. Goal: By 2005, the number of annual confirmed releases
from USTs will be eighty percent (80%) lower than in 1994. The
1994 baseline is 960 confirmed releases.
65
-------
B. Objectives
FPD Artivitifis
• Receive reports of suspected or confirmed releases.
• Follow up on reports of confirmed releases, e.g., site visits.
• Receive initial site characterization reports.
• Receive free product removal reports and determine the
practical extent for free product removal.
• Request and receive reports of investigations of the
magnitude and extent of soil and groundwater
contamination.
• Require owner/operators (o/o) to determine if the UST
system is the source of off-site impacts.
• Establish alternative time frame for o/o to report suspected
releases, spills and overfills, and confirmed releases.
• Establish alternative time frame for o/o to investigate and
confirm suspected releases.
• Test tanks and/or require tanks to be tested for leaks when a
leak is suspected.
EPD Delivftrahlft: By September 30, 2000, confirmed annual
releases will be 10% lower than 1994.
II. UST Systems Meeting Standards - Upgrading of systems to meet
both state and federal standards is the up-front, preventative
approach to avoiding releases from USTs.
66
-------
A. Goal: By 2005, ninety-five percent (95%) of the known UST
systems will meet state and federal standards.
B. Objectives
EPD Activities
• As needed, revise state authorities and regulations for the
state UST program in order to meet federal standards.
• Maintain an ongoing tank notification program and capability
to report aggregate data derived from the notification
requirements to EPA on an annual basis.
• Investigative and develop mechanisms to fund the state
program.
• Maintain a state fund to help owners/operators meet
financial responsibility requirements.
• Improve state authorities and procedures for an adequate
compliance monitoring and enforcement program.
• Secure technical assistance and training for state and local
personnel for UST program implementation.
• Participate in regional and national EPA meetings upon
request by EPA, to the extent such participation can be
supported by available travel allocations.
• Promote compliance with federal and state requirements
through outreach efforts designed to disseminate regulatory
and technical information to the regulated community.
Distribute printed program material to the regulated
community and interested citizens and organizations. Make
presentations about the UST program to public and private
organizations.
67
-------
Identify, investigate and resolve violations of state
regulations. Carry out compliance and enforcement
initiatives directed at UST systems subject to UST program
requirements.
Develop and implement a system for assigning priorities to
sites.
Implement enforcement policies and procedures.
Implement public participation procedures.
Implement quality assurance practices.
Actively participate in the state's Ground Water Coordinating
Mechanism established by the state's Ground Water
Program to support and implement the state's
Comprehensive State Ground Water Program.
Maintain an adequately trained staff.
EPD Deliverables
Submit a narrative report thirty (30) days after the end of
the second and fourth quarters of the federal fiscal year on
the performance measures listed below and other significant
accomplishments, changes in program structure, staffing,
funding levels and an update on the status of special
initiatives undertaken as part of this agreement. Submit the
USTMP's monthly report, containing cumulative work output
data, after the end of the first and third quarters.
By September 30, 2000, 50% of known systems will meet
state and federal standards.
68
-------
III. Corrective Action for Confirmed Releases - Where releases have
occurred, risk based corrective action will be evaluated and/or
remediation will promptly address any adverse effects to human
health and the environment.
A. Goal: By 2005, the cumulative number of sites where
corrective action for contamination from USTs has been
completed will increase by eighty-five (85%) from the cumulative
1994 levels. The 1994 baseline is 451 completed corrective
actions.
B. Objectives
FPD Antivitifis
Receive, review and evaluate required and voluntarily
submitted corrective action plans and reports of the results
of implementing the plans.
Establish alternative amount of petroleum spills and overfills
that o/o must contain and immediately clean up.
Investigate and/or require responsible parties to investigate
sites to evaluate the source and extent of contamination.
Provide safe drinking water to residents at the site of a tank
leak.
• Provide for temporary or permanent relocation of residents.
• Clean up and/or require responsible parties to clean up
contaminated soil and water.
• ^ By September 30, 1997, the cumulative number of
corrective action completions will increase by 40% from the
1994 level.
69
-------
FPA Roles:
EPA will provide guidance from a national and regional perspective
on emerging program issues and technical and enforcement
assistance on an "as requested" basis. Grant funds are available
for all state program activities. EPA will conduct middle and end-
of-year performance reviews and give other performance feedback
in accordance with the program delegation agreement.
C. EPD will use the following performance measures to
evaluate the program effectiveness:
1. Number of Confirmed Releases (total)
2. Number of Confirmed Releases that have
Contaminated Ground Water and/or Surface Water
3. Number of Confirmed Releases that have
Contaminated Drinking Water Sources
4. Number of Cleanups Initiated
5. Number of Cleanups Completed
6. Number of Cleanups Completed that have
Contaminated Ground Water and/or Surface Water
7. Number of Cleanups Completed that Contaminated
Drinking Water Sources
8. Inventory: Number of Existing USTs, Number of
Hazardous Substance USTs, Number of Petroleum
USTs, Number of Closed USTs
9. Percent of Regulated UST Systems Universe in
Compliance with the Requirements for Upgrading
10. Percent of Regulated UST Systems Universe in
Compliance with the Requirements for Leak Detection
11. Percent of Regulated UST Systems Universe in
Compliance with Requirements for Financial
responsibility.
70
-------
CHAPTER 7
EMERGENCY RESPONSE
General
The Emergency Response Program responds to the scene of
accidents involving the release of hazardous materials. The Program is
staffed with a team of 8 full time emergency responders, one Program
Manager and two support personnel. On a 7-day a week, 24 hour basis,
team members respond to incidents throughout the State. On a yearly
basis, nearly 4000 calls are processed through our Emergency
Operations Center and forwarded to the Emergency Response Team
(ERT). Although many of these calls are actually not emergencies, ERT
members respond to nearly 400 emergencies each year. ERT members
serve as technical support for other agencies such as fire and police,
and have primary responsibility for ensuring compliance with all state
environmental laws as an emergency moves into the remediation phase.
ERT members work directly with the responsible parties to ensure that
all sites are remediated to appropriate standards. Where appropriate the
ERT members also collect evidence for enforcement actions and prepare
enforcement orders.
The ERT also investigates nearly 1,000 high priority complaints
each year. These are non-emergency situations that require a quicker
response that other programs are able to accommodate. Investigating
these complaints relieves other programs from the task and provides
the responsiveness expected by the public. ERT members prepare
enforcement actions as needed to resolve these complaints.
The ERT places a strong emphasis on customer service, seeing our
customers as not only being the general public, but also the regulated
community and the other programs within EPD. The ERT works closely
with other state, local and federal agencies on developing emergency
response plans and in participating in various drills and exercises.
The Emergency Response Program also maintains all information
submitted to the state as required by the Emergency Planning and
71
-------
Community Right-To-Know Act. This information is provided to local
agencies in a database format that allows them to prepare better local
emergency response plans.
a. Goal: The Emergency Response Program implements the State
portion of the Emergency Planning and Community Right-To-Know Act
with respect to hazardous materials.
b. Objectives: Preparedness, Responsiveness, and Customer
Service as described above.
EPD Deliverables
EPA Rnla:
Summary information on all calls received through our
Emergency Operations Center is maintained in a
database. This database includes basic location and
type of incident as well as the final resolution of the
call. The database is updated weekly as are summary
reports.
Each reported incident is recorded by the ERT on a
form which contains information on the actual event,
as well as what actions were taken. The files are
updated weekly and can provide a quick summary of
the history of a spill.
All ERT responses, either to actual emergencies or to
complaints are documented in a detailed report.
Annually, the chemical inventory data provided to the
state as required by EPCRA Section 311/312 are
available as a computer database. The entire data-base
as well as any requested reports can be provided.
To assist, as needed, by the Emergency Response
Program.
72
-------
c. Performance Measures
• Respond to scene of hazardous materials spill to
provide technical assistance and direct remediation
efforts.
• Investigate high priority complaints and complete
necessary enforcement actions.
• Participate in preparedness drills and exercises with
local and federal agencies.
• Maintain Community Right-To-Know Database and
assist in Emergency Planning with Local Emergency
Planning Committees.
73
-------
CHAPTER 8
INFORMATION MANAGEMENT
Integrated Information Management System
As a component of the PPA, EPD will build an Integrated Information
Management System that provides a single point of access for all data
related to the tracking of the agreed upon environmental indicators as
well as other core program data. Consolidation of funding sources and
integration of various programs within the PPA provides a unique
opportunity to likewise eliminate many and consolidate the remaining
disparate database systems now inherent at both the state and federal
level. Neither Georgia nor EPA can continue the practice of developing
and maintaining stand-alone databases, utilizing outmoded technology
and collecting redundant and often unused or unneeded data.
The purpose of the integrated Information Management System is to
provide a single database that contains only essential data. The system
will utilize client/server technology, such as an Oracle server, which can
be accessed utilizing web browsers either through EPD's Intranet or
through Internet access. The goal of this system is to provide EPD
associates, EPA, the public, and the regulated community a single point
of access (a web browser) to all data related to the implementation of
all environmental statutes and regulations.
This system will rely on a single EPD Identification number for each
facility regulated, rather than the individual ID numbers now tracked by
individual programs. In addition to the traditional databases, the system
will also include provisions for other forms of documents and data, such
as GIS spatial data, images and audio. System development will
include the complete redesign of some databases, such as the UST
database, and the development of completely new databases in others,
such as the Lead Paint Abatement Program. Where possible, imaging
technology will be utilized to significantly reduce the amount of paper
data kept by EPD. Significant use of OCR and ICR technology is
planned for data input from the regulated community, where submission
of electronic reporting is not feasible.
74
-------
Through use of this system, consolidated tracking and reporting of
agreed upon environmental indicators should become a reality.
However, for this to succeed, both EPD and EPA staff must be open to
change and willing to relinquish control over outmoded data systems,
particularly mainframe systems. Most of the mainframe databases are
outmoded, lack easy access by the users and track numerous data sets
of little or no value. Further, most if not all of these system are
tracking duplicative data, leading to a waste of resources, conflicting
data, and necessitating wasted resources to consolidate needed
information on the same facility. In short, pursuing the PPA without a
commensurate effort to consolidate data collection, storage and
reporting would be an extremely time consuming endeavor.
Work will begin on this system in FY 97 and is expected to be
concluded by the end of FY98. As mentioned earlier, work will begin
on those systems that are now outmoded, such as the UST and RCRA
systems. Once completed, other systems such as Drinking Water,
Water Quality, and Air Quality will be redesigned, utilizing client/server
technology on a networked system.
75
-------
CHAPTER 9
CUSTOMER ASSISTANCE
In Fiscal Year 1996, EPD established a Customer Assistance
Program to provide technical and regulatory assistance to citizens, the
regulated community and local governments.
In FY 96, EPD began publishing the FPD Quarterly, a newsletter
for the regulated community which is distributed to approximately 1400
subscribers. A draft directory of technical guidance available from EPD
has been compiled; by the end of FY 96, copies of all state
environmental statutes and regulations as well as technical guidance
will be available from one office.
EPD will continue to develop this program in FY 97 as described
below:
• provide more accessible, accurate information about
environmental protection.
• improved access to public documents.
• continued promotion of the one-stop permitting concept for
new industry.
• continued solicitation of public input.
• coordination with and expansion of small business outreach
programs for air and hazardous waste media.
Activities
By October 1996, sufficient staff will be added to the program to
perform public involvement functions including: a toll-free information
and access phone service and maintenance of a web page. During FY
97, software will be developed to allow automated tracking of, at a
minimum, complaint calls received on the toll-free line. The web page
will contain text of Georgia environmental statutes and regulations,
regularly updated environmental information and notices, EPD
databases, and some educational materials. The program will
coordinate with the Small Business Technical Assistance Program in the
76
-------
Air Protection Branch to expand outreach activities and with the
Hazardous Waste Management Branch to identify outreach needs for
hazardous waste generators.
The Program will coordinate EPD's participation with Georgia Tech
and other members of the Georgia Research Alliance in the
Environmental Policy Forum. This Forum will provide a neutral place for
stakeholders from government, industry and the public, to interact
constructively by using consensus-based approaches to facilitate the
development of environmental quality goals, targets and indicators.
The output will guide policy development and implementation by
focusing attention to changes in environmental management to better
reflect the environmental quality objectives in the State of Georgia.
The Customer Assistance Program will participate on the
Environmental Education and Community Recognition programs
included in Chapter 10. Also, the Customer Assistance Program will
sponsor and facilitate stakeholder workshops (regulated community and
environmental groups) to discuss environmental concerns common to
both groups.
EPD Deliverables
EPD will publish the following documents for the public and EPA
as part of the Customer Assistance initiatives:
• EPD Quarterly
• A quick look reference guide for the public identifying
program functions, contacts and phone numbers for the
agency.
• A report on the environmental quality of Georgia's air, water
and land, and on the progress toward addressing Georgia's
environmental issues.
• A guide to environmental permitting in Georgia.
77
-------
CHAPTER 10
LOCAL GOVERNMENT PARTNERING
The Governor's Environmental Advisory Council provided input on
an early draft of the PPA and concluded that progress in the partnership
between EPD and the local governments falls clearly in the Region 4
Strategy Statement. The Council specifically requested that such
partnership opportunities be developed further in FY 97.
EPD participated in a study on the delegation of environmental
programs to local governments. This study was completed in 1994 and
concluded that local governments should pursue the establishment of
designated environmental courts for enforcement of local environmental
ordinances. The report pointed out that changes in State statutes are
necessary prior to local authorization of most State environmental
responsibilities. However, there are other areas of EPD/local
government partnership which will be pursued in FY 97.
First, EPD will continue to participate with the Georgia Municipal
Association, the Association of County Commissioners of Georgia and
others on a Citizens Environmental Education Task Force. This task
force is assembled at the request of local governments to identify how
the State and local governments and business can synergize to enhance
citizen environmental education. Local officials recognize that their
environmental decision making would be more effective if their
constituents are knowledgeable about environmental issues. A final
report and recommendation will be prepared prior to October 1, 1997.
Second, EPD will initiate an environmental recognition program for
local governments in FY 97. This will include the following elements:
1. Criteria to satisfy to receive recognition, for example:
a. Compliance with permits.
b. Assumption of State environmental programs which
can be delegated.
c. A comprehensive environmental plan (10 to 15 years).
78
-------
2. Incentives for local governments to seek environmental
recognition, for example:
a. Reduced monitoring/inspections or technical assistance
inspections only (no enforcement)
b. Negotiated schedules for environmental improvements
taking into account the comprehensive plan.
c. Formal recognition.
d. Reduced monitoring/inspections for industries located
inside recognized local governments.
e. Technical assistance to local government on delegated
programs.
EPA and others will be requested to participate in this process. It
will be similar to the recognition program being established by DNR's
Pollution Prevention Assistance Division for industries showing
environmental and pollution prevention leadership.
The program will be developed fully in FY 97, publicized and ready
for implementation prior to November 1, 1997.
Third, EPD will implement the following suggestions provided by
local governments at the Small Communities Environmental Summit
sponsored by EPA on June 12, 1996. If the suggestions do not conflict
with the EPA requirements in the regulations, delegation agreements,
national guidance and national data systems. Implementation of these
suggestions will be a positive step in achieving the key goals
established at the Summit which are to improve communications,
increase technical assistance, and recognize the strength of local
governments in environmental protection:
• EPD will improve access to guidance documents by
preparing a list of all documents for distribution, establishing
a toll-free phone number to call for documents, to put
documents on the Internet and to write new documents in
plain language.
79
-------
• EPD will issue joint press releases with local governments on
local environmental issues.
• EPD will hold quarterly or semi-annual meetings with local
governments to discuss environmental issues.
• EPD will facilitate local governments in gaining technical
assistance from EPA and other agencies (state, federal or
non-profit).
• EPD will involve local governments as early stakeholders in
rule development.
In addition to these commitments, EPD will discuss with local
governments the following suggestions to determine how they can be
implemented.
• EPD to work with Congress and the General Assembly to
institute changes to assist small communities. This would
include annual feedback to the Congressional delegation on
Federal environmental legislation.
• State and Federal responsibility to address environmental
issues rather than laying the responsibility at the local level
(Example: waste reduction).
• Finding a mechanism such that mid-stream changes in local
government environmental requirements will not occur.
• Increasing environmental capacity in rural areas.
• Increasing flexibility and time to comply with environmental
regulations.
• Facilitating EPD inspection personnel in having local
government experience.
80
-------
CHAPTER 11
MULTIMEDIA
Pollution Prevention
EPD will continue to incorporate pollution prevention into its FY
97 activities, although DNR's Pollution Prevention Assistance Division
takes the lead in this. The program specific chapters in the Agreement
identify EPD's specific pollution prevention activities for FY 97.
Specifically, EPD's Air Protection Branch will incorporation pollution
prevention in the Title V permitting process and will investigate the
incorporation of pollution prevention into state regulations. EPD's
Hazardous Waste Management Branch has established waste reduction
through pollution prevention as one of its top measures. EPD's Water
Protection Branch will continue to promote pollution prevention in the
industrial pretreatment programs. Finally, EPD will accept pollution
prevention supplement environmental projects consistent with EPA's
guidance and state law as part of enforcement actions.
Although not part of this PPA, USEPA requested a brief
description of the activities of the Pollution Prevention Assistance
Divisions. The Pollution Prevention Division (P2AD) mission is to
develop programs and activities to facilitate reduction of pollution at the
source, and instill a pollution prevention ethic in Georgia's businesses
and citizens. P2AD was created as a non-regulatory organization
designed to coordinate all of the state's pollution prevention efforts
aimed at air and water pollution, industrial wastes, and hazardous or
toxic materials. P2AD offers a variety of programs to assist Georgia's
citizens and industries in improving efficiency by preventing waste.
Staff engineers conduct on-site pollution prevention assessments, and
also assist companies in setting up internal corporate pollution
prevention programs. P2AD sponsors workshops and training courses
that facilitate the transfer of pollution prevention information. A
clearinghouse/library containing periodicals and technical documents
relating to pollution prevention is available to the public. The Division
also sponsors a matching grant program to demonstrate the feasibility
of various pollution prevention options, or to prepare education
81
-------
programs. Additionally, the Division seeks to leverage existing
expertise and maximize the use of public and private resources outside
DNR to achieve its mission. This is particularly evident in P2AD's
applied pollution prevention research efforts with university and industry
partners. P2AD also promotes pollution prevention in the agricultural
sector through various programs with the University of Georgia and the
Cooperative Extension Service. P2AD's staff consists of 11 full time
positions and four contract positions and an annual budget of about
$1.8 million. None of this budget is contained in EPD/EPA's FY 1997
PPA/PPG.
Environmental Justice
EPD will incorporate the principles of environmental justice within
EPD's statutory authority into its programs to ensure no segment of the
population bears a disproportionately high and adverse human health
and environmental effect from pollution. EPD will be responsive to
building cross-program cooperation in environmental justice planning
and implementation with the USEPA, as well as other Federal, State
and local agencies. EPD commits to working with USEPA on specific
activities and/or planning for incorporating environmental justice into
daily EPD activities.
EPD will diligently work to achieve the following environmental
justice mandates with respect to its programs:
1. Education and Outreach: EPD will foster a greater awareness
of environmental justice issues, both within EPD, and among
those most threatened by environmental risks. EPD will
promote increased communication of environmental justice
in a manner that has a measurable impact on affected
communities of color and low income communities, and
provide general environmental education to targeted
populations.
2. Data Management: EPD will ensure that programs have
access to information and information management systems
82
-------
necessary to successfully identify, evaluate, and resolve
environmental justice issues.
3. Communications: EPD commits to working with the USEPA
to foster enlightened communications on specific activities
and/or planning for incorporating environmental justice into
daily EPD activities. EPD will improve and expand its
communications effort by endeavoring to keep citizens
abreast of emerging initiatives such as CBEP, Small Business
Compliance Assistance, etc.
EPD recognizes the sensitivity and concern that issues such as
risk assessment, risk management, and risk communication present to
low income communities and communities of color. Towards this end,
EPD will seek to enhance its communications and outreach activities,
with regards to risk management, by encouraging participation by low
income and communities of color in those activities.
Community Based Environmental Protection
The concept of Community Based Environmental Protection
(CBEP) is explained in the EPA Region 4 FY 96 CBEP Implementation
Plan. Basically, the CBEP concept focuses environmental efforts
(monitoring, inspection, enforcement, assistance and outreach) on a
multi-media level into specific geographical areas. The purpose is to
"make an environmental difference" in the specific area.
In FY 96, EPD and EPA are working together on a Brunswick
CBEP initiative. This will be completed in FY 97. EPD commits to
fulfilling its responsibilities to the Brunswick CBEP.
Also, EPD is cooperating with EPA and other States in the
Southern Appalachian Mountains Initiative. This will continue into
1997 and, perhaps into 1998.
83
-------
CHAPTER 12
IMPROVED COMMUNICATIONS
The Region 4 Environmental Strategy Statement and the DNR
Strategic Plan emphasize the need to form partnerships through
improved communication. This Performance Partnership Agreement
contains many elements which work toward improved communications
with citizens including:
• Quarterly newsletters
• Environmental report
•Toll free number
• EPD home page
• Information Management
This Chapter goes beyond those elements to lay out a specific
approach to improved communication with the regulated community
starting in FY 96 and to be fulfilled in FY 97.
EPD has solicited from the regulated community suggestions to
improve communications. As a result of this process, EPD will
implement the following communication and interface suggestions.
Overall suggestions:
• Do not treat the regulated community with hostility (as
bad actors)
• Encourage the regulated community to come forth with
information and solutions
• Take a hard line with non-performers
• Use common sense and good judgement
• Continue one-stop permitting
• Minimize unnecessary paperwork
• Involve regulated community before decisions are made
• Enhance quarterly newsletter to include rule
interpretations and policy
84
-------
• Implement Customer Assistance Program quickly as
planned
• Quarterly meetings with regulated community
• Increase public notice period on proposed rules from 30
to 45 days (with isolated exceptions).
1. Timeliness
• Be responsive to requests
Verbal voice mail is ok
Delegation of returning phone calls is ok
E-mail is ok
• Use internal flexibility in assignments to speed
response times
-cross training
• Negotiate deadlines for submittals, call first then put
date in letter
• Respond quickly to resolve minor enforcement or non-
compliance matters
2. Openness and Flexibility
• Listen first, decide second
• Recognize impact of public perception on the regulated
community, do not portray the regulated community as
"evil" to the public.
• Convey information fairly and honestly
• Get the facts straight
• Embrace public participation in rule making, involve
stakeholders early
• Adopt a "work together" philosophy
• Enhance dispute resolution process by allowing EPD
middle managers to resolve disputes and, if
appropriate, overrule staff
• Encourage staff to be creative/receptive
85
-------
• Focus on results, not just process
• Send draft of a permit to the applicant for review prior
to public notice; work out conditions prior to public
notice, send copy of public notice to the applicant
(some exceptions like municipal solid waste landfill
permits)
3. Consistency and Reliability
• Adopt rules consistent with statute
• Consistency within EPD on clean-up criteria (UST,
RCRA, HSRA) as best as possible; compare new
standards with other standards
• Branch decision/action should be consistent with EPD
senior management philosophy
• Focus on violations affecting human health and
. environment; handle paperwork violations without
fanfare
® Recognize and strive for environmental results;
enforcement actions and penalty dollars are not final
measures
• Do not focus on protecting individual EPD programs to
the detriment of environmental results
4. Sound Science
• Recognize that the regulated community's call for
sound science is not a smoke screen or delaying tactic
• Avoid quick decisions; especially those involving large
expenditures
In addition to these suggestions, EPD received suggestions which
will be evaluated for implementation in FY 97 after further discussion.
This started in FY 96 and will be finished in FY 97:
• Use cost/benefit, risk analysis in rules and decisions
• Federal consistency -
86
-------
-publish rule interpretations
-strive for federal consistency
Partnership agreements (scope, content)
Permit application tracking
-up-front review time frames
-track applications
-track permit application turn-around times and publish
newsletter
Process applications in 90 to 180 days
Gather scientific data to base decisions and improve
credibility
Do not penalize the regulated community for
involuntary noncompliance.
87
-------
APPLICATION FOR
FEDERAL ASSISTANCE
2 DATE SUBMITTED
9/25/96
Applicant Idennfier
t
1. TYPE OF SUBMISSION I
|
Application ! Pre application
~ Construction j ° Construction
¦ Non-Construction : a Non-Construction
3 DATE RECEIVED BY STATE
—_ .
4 DATE RECEIVED BY FEDERAL AGENCY
1
Federal Identifier
5 APPLICANT INFORMATION
Legal Name' Georgia Department of Natural Resource*
Organizational Unit: Environmental Protection Division
Address (give city, county, state, and zip code): 205 Butler Street, SE, Suite 1154 East
Atlanta. Georgia 30034
Name and telephone number of the penon to be contacted on matters involving this ipplicauon
(give area code) David Word • (404)456-4713
6. EMPLOYER IDENTIFICATION (EIN):
L JL J—2.4 5_
8. TYPE OF APPLICATION:
~ New ¦ Continuation ~ Revision
IT Revision, enter appropriate letters) in box(es): ~ ~
A. Increase Award B. Decrease Award
C. Increase Duration D. Decrease Duration
Other Specify:
TYPE OF APPLICANT: (enter appropriate letter here) _A_
A. Sute R Independent School Distnct
B. County I. State Controlled Institution of Higher Learning
C. Municipal J. Private University
D. Township K. Indian Tribe
E. Interstate L Individual
F. Inte municipal M. Profit Organization
G. Special District N. Other (Specify):
9 NAME OF FEDERAL AGENCY: Environmental Protection
10. CATALOG OF FEDERAL
feCff Cec)£
DOMESTIC ASSISTANCE NUMBER. <
TITLE: Performance Partnership Grant
II. DESCRIPTIVE TITLE OF APPLICANTS PROJECT:
Performance Partnership Agreement
12. AREAS AFFECTED BY PROJECT (cities, counties, states, etc.):
Georgia
13. PROPOSED PROJECT
M CONGRESSIONAL DISTRICT OF
Start Date
10/1/96
End Date
9/30/97
i
a. Applicant: j b Project
District 5 ! Statewide
15 Estima^ Funding
16 IS APPLICATION SUBJECT TO REVIEW BY STATE EXECUTIVE ORDER
12372 PROCESS?
a. YES. THIS PREAPPUCATION/APPUCATION WAS MADE AVAILABLE TO
THE STATE EXECUTIVE ORDER 12372 PROCESSES FOR REVIEW ON
DATE 9/2S/96
a Federal
$8,138,348
b Applicant
S3.836.284
c State
S
d Local
S
b. NO.
~ PROGRAM IS NOT COVERED BY E.O. 12372
~ OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW
e Other
$
f Program Income
s
17. IS THE APPLICANT DELINQUENT ON ANY FEDERAL DEBT?
~ Yes II "Yes" attach an explanation. X No
g. TOTAL
11.974.632 00
18. TO THE BEST OF MY KNOWLEDGE AND BELIEF. ALL DATA IN THIS APPUCATION/PREAPPUCATION ARE TRUE AND CORRECT. THE DOCUMENT HAS BEEN
DULY AUTHORIZED BY THE GOVERNING BODY OF THE APPLICANT AND THE APPLICANT WILL COMPLY WITH THE ATTACHED ASSURANCES IF THE
ASSISTANCE IS AWARDED.
a. Typed Name of Authorized Representative.
Harold F. Reheb
b. Title:
Director
c. Telephone Number
(4(4)656-4713
d Signature of Authorized Representative 1
e Date Signed t
llZdllb
Previous Edluortt Noi Usable Sia/ilard Form 42*A
-------
BUDGET INFORMATIC in-Cons*ruction Programs
OMBAI II34H0M
SECTION A ¦ BUDGET SUMMARY
Grant Program
Function
or Activity
(a)
Catalog of Federal
Domestic Assistance
Number
(b)
Estimated Unobligated Funds
New or Revised Budget
Federal
(c)
Non-Federal
(d)
Federal
(e)
Non-Federal
<0
Total
(E)
1. PPG
$
$
$8,138348
$3,836084
11.974,632.00
2.
000
3.
0.00
4.
0.00
5 TOTALS
0.00
0.00
8,138348.00
3,836,284.00
11,974,632.00
SECTION B - BUDGET CATEGORIES
6. OBJECT CLASS CATEGORIES
GRANT ntOCRAM. FUNCTION OR ACTIVITY
Total
(1)
(2)
(3)
(4)
(5)
a. Personnel
$6,981,374
$
$
$
6,981374.00
b. Fringe Benefits
2,498,588
2,498,588.00
c. Travel
214,224
214,224.00
d. Equipment
179,400
179,400 00
e. Supplies
422,954
422,954.00
f. Contractual
695,445
695.445.00
g. Construction
0.00
h. Other
982,647
982,647.00
i. Total Direct Charges (sum of 6a - 6h)
11,974,632.00
0.00
0.00
0.00
11,974,632.00
j. Indirect Charges
000
k. TOTAI.S (sum of 6i and 6j)
11,974,632.00
0.00
0.00
0.00
11,974,632.00
7. Program Income
SimlwJ Form 424A (4 HI I
-------
SECTION C - NON-FEDERAL RESOURCES
(a) Grant Prwrifa
noApoUom
IcISuie
Id) Other Somkb
(H TOTALS
8. PPG
$3,836,284
$
$
3,836,284.00
9.
0.00
10.
0.00
11.
0.00
12. TOTAL (sum of lines 8 and 11)
3,836,284.00
0.00
0.00
3,836,284.00
SECTION D • FORECASTED CASH NEEDS
13. Federal
(Total far 1st Year)
111 Quarter
2nd Quarter
3rd Quarter
4lh Omltr
14. NonFederal
15. TOTAL (sum of lines 13 and 14)
SECTION E - BUDGET ESTIMATES OF FEDERAL FUNDS NEEDED FOR BALANCE OF THE PROJECT
(a) Great Proffim
FUTURE FUNDING PERIODS (Yean)
(b) Flm
(c)Sccood
(d)TWd
(c) Fourth
16.
$
$
$
$
17
18.
19.
20. TOTALS (sum of lines 16 - 19)
0.00
0.00
0.00
0.00
SECTION F - OTHER BUDGET INFORMATION
(Ailidi eddtienel itali IHkhiwI
21. Direct Charges:
22. Indirect Charges:
23. Remarks:
SF 424A (4-M)Page2
hacrlbd by OMB Ckndar A-II2
AUTHORIZED FOR LOCAL REPRODUCTION
-------
BUDGET CATEGORIES INFORMATION (FROM SF424A, SECTION B TOTALS)
Enter Total Program Costs, i.e.. Federal and Non-Federal Funds Combined
(Attach Separate Sheet(s) if necessary)
Obicc. l lass Categories
a. Personnel: (Program Staffing - include
and indicate vacant positions)
Position Title
Number in
Position
Class
Annual
Salary
Rate
Work
Years
Personnel
Costs
(1)
(2)
(3)
(4)
(5)
Adminstrative Services Coordinator
I
27,174
1
27174
Associate Environmental Specialist
5
22,793
4
91172
Branch Chief
1
72,000
.5
36000
Computer Network Administrator
3
41.636
2
83272
Environmental Engineers
34
38,499
25
962475
Environmental Program Manager I
32
47,763
24
1146312
Environmental Program Manager II
12
55,043
9
495387
Environmental Specialist
111
33,637
74
2489138
Environmental Tech/Co-ops
8
21,000
1
21000
Geologist
11
35.280
10
352800
Lab Aides
5
17,135
2
34270
ociates
8
33,805
4
135220
jry Program Manager
7
44,184
5
220920
Laboratory Scientist
17
27,358
10
273580
Laboratory Technician
3
21,108
3
63324
Radio Operator
1
19,530
1
19530
Clerical/Secretaries
30
22,075
24
529800
0
0
0
0
PERSONNEL CATEGORY TOTALS
289.00
580,020.00
199.50
6.981.374.00
b. FRINGE BENEFITS: TOTAL
2.498.588
c. TRAVEL: TOTAL
214.224
SF424B (4-88) Back
-------
BUDGET CATEGORIES INFORMATION (FROM SF424A, SECTION B TOTALS)
Enter Total Program Costs, i.e., Federal and Non-Federal Funds Combined
(Attach Separate Sheet(s) if necessary)
Object Class Categories
d. Equipment:
(1) List each item costing $5,000 or more to be purchased for this project;
16,500
33,000
33,000
40,000
12,000
134,500 00
3 - Data Loggers
1 - Programmable Preconcentrator
1 - Purge and Trap Concentrator Antosampler
1 - Autoeluter
1 - Sample Concentrator
SUB-TOTAL
(2) List items costing less than $5,000. You may list the items by groups, as appropriate.
11,900
21,000
12,000
44,900.00
7 - Digital Flowmeters
14 - Air Conditioners
999 - Caibonyl Cartridges
SUB-TOTAL
COMBINED EQUIPMENT TOTAL
179.400 00
e. Supplies: List by groups, as appropriate.
40,000
252,954
60,000
45,000
25,000
Postage
Laboratory and Monitoring Supplies
Office Supplies
Field supplies - maps, reagents, etc.
Computer supplies - disks, paper, printer, ribbons, etc.
SUPPLIES TOTAL
422.954 (Xr
Prcwnhcd hy OMB Cifi-ulif * 11)2
AUTHORIZED FOR LOCAL REPRODUCTION
-------
BUDGET CATEGORIES INFORMATION (FROM SF424A, SECTION B TOTALS)
Enter Total Program Costs, i.e., Federal and Non-Federal Funds Combined
(Attach Separate Sheet(s) if necessary)
Object Class Categories
f. CONTRACTUAL: List each planned contract separately, type of services to be procured, proposed procurement
method (i.e. small purchase, formal advertising, competitive negotiations or non-competitive negotiations) and the
estimated cost. Also, please indicate if the proposed contract performance period will go beyond the budget period
of assistance for which this application is submitted.
Weather Network - data used for visibility studies
600
Climatological Data - data for GA Weather Stations
500
Augusta - Richmond County - to service ambient Air Monitoring Network
6,300
Columbus—Muscogee County -to service ambient Air Monitoring Network
8,760
Cartersvilie—Barrow County - to service ambient Air Monitoring Network
3,340
Ringgold-Catoosa County - to service ambient Air Monitoring Network
530
Rome—Floyd County - to service ambient Air Monitoring Network
4,330
Rossville-Walker County - to service ambient Air Monitoring Network
1,135
Analysis of Air Toxic - to service hi-vol air samples
6,000
CONTINUED ON ATTACHED SHEET
663,950
COMBINED CONTRACTUAL TOTAL
CONSTRUCTION (N/A)
695445
h OTHF.Rr F.xplain hv major categories anv items not included in above standard budeet cateeories. Caution: Do
not include or proposed as a direct project cost, any cost that is indirect in nature (see OMB Circular A-87) or is
included in the indirect cost pool on which the indirect cost rate (item j) is based.
Real Estate Rental
438,436
Rents other than Real Estate
12,498
Motor Vehicle Expense
79,566
Repair and Maintenance
41,898
Utilities
19,544
Printing
25,815
Insurance and Binding
23,848
Other
182,116
Duplicating and Rapid Copy
.14,797
Compute' Charges
32,320
Telecommunications
111,809
OTHER TOTAL
982,647.00
i. TOTAL DIRECT CHARGES: (Sum of Items a. through h.)
$11,974,632
1 INDIRECT COSTS: (Attach a copy of your latest indirect cost agreement)
$-0-
k. TOTAL PROPOSED PROGRAM COSTS (Sum of Items i. and j)
SHARE. FEDERAL 67.96% GRANTEE 32.04%
11.974.632.00
-------
f. Contractual (Attachment)
U.S. Geological Survey - collective Water Quality Monitoring 300,000
Corps of Engineers - Water Quality Monitoring 8,700
City of Columbus - Water Quality Monitoring 5,250
University of Georgia - Analyze fish tissue samples 20,000
Medical Screening 20,000
Southern Enforcement Network 10,000
Georgia Tech - Ambient Monitoring 300,000
SUB-TOTAL $663,950
-------
KEY *EOP jE LISr'
Plea ow street address as well as Post Office Box Number where applicable.
AGENCY DIRECTOR
(Individual who is authorized to sign the assistance agreement application and award acceptance).
Name:
Title:
Address:
Telephone:
Harold F. Reheis
Director
205 Butler Street. SE
Suite 1152. East
Atlanta. GA 30334
(404^656-4713
PROGRAM DIRECTOR
(Technical program director; generally the same individual as the "contact person" in block #5 of the application).
Name:
Title:
Telephone:
David M. Word
Assistant Director
20? Butler Street. SE
Suite 1152. East
Atlanta. GA 30334
(404^656-4713
FINANCE DIRECTOR
(This is the person who is responsible for (1) maintaining the accounting/financial management system supporting grant
expenditures; (2) preparing financial reports; and (3) maintaining the Letter of Credit. If any of these responsibilities are
located in another office, please so indicate by showing below the name(s), title(s) organization name(s), address and
telephone.)
Name:
Title:
Address:
Telephone:
E. Guv Dasher
Chief Accountant
205 Butler Street. SE
Suite 1252. East
Atlanta. GA 30334
(4Q4)fi?(>-2774
-------
10. Will comply, if applicable, with flood insurance purchase
requirements of Section 102(a) of the Flood Disaster
Protection Act of 1973 (P.L. 93-234) which requires
recipients in a special flood hazard area to participate in
the program and to purchase flood insurance if the total
cost of insurable construction and acquisition is $10,000
or more.
11. Will comply with environmental standards which may be
prescribed to the following: (a) institution of
environmental quality control measures under the
National Environmental Policy Act of 1969 (P.L. 91-190)
and Executive Order (EO) 11514; (b) notification of
violating facilities pursuance to EO 11738; (c) protection
of wetlands pursuant to EO 11990; (d) evaluation of
flood hazards in floodplain in accordance with EO
11988; (e) assurance of project consistency with the
approved State management program developed under
the Coastal Zone Management Act of 1972 (16 U.S. C.
§§ 1451 et seq.); (0 conformity of Federal actions to
State (Clear Air) Implementation Plans under Section
176(c) of the Clear Air Act of 1955, as amended (42
U.S.C. § 7401 et seq.); (g) protection of underground
sources of drinking water under the Safe Drinking Water
Act of 1974, as amended, (P.L. 93-523); and (h)
protection of endangered species under the Endangered
Species Act of 1973, as amended (P.L. 93-205).
12. Will comply with the Wild and Scenic Rivers Act of
1968 (16 U.S.C. §§ 1271 et seq.) related to protecting
components or potential components of the national wild
and scenic rivers system.
13. Will assist the awarding agency in assuring compliance
with Section 106 of the National Historic Preservation
Act of 1966, as amended (16 U.S.C. 470), EO 11593
(identification and protection of historic properties), and
the Archaeological and Historic Preservation Act of 1974
(16 U.S.C. 469a-1 et seq.)
14. Will comply with P.L. 93-348 regarding the protection of
human subjects involved in research, development, and
related activities supported by this award of assistance.
15. Will comply with the Laboratory Animal Welfare Act of
1966 (P.L. 89-544, as amended, 7 U.S.C. 2131 et seq.)
pertaining to the care, handling, and treatment of warm
blooded animals held for research, teaching, or other
activities supported by this award of assistance.
16. Will comply with the Lead-Based Paint Poisoning
Prevention Act (42 U.S.C. §§ 4801 et seq.) which
prohibits the use of lead based paint in construction or
rehabilitation of residence structures.
17. 'Will cause to be performed the required financial and
compliance audits in accordance with the Single Audit"
Act of 1984.
18. Will comply with all applicable requirements of all other
Federal laws, executive orders, regulations and policies
governing this program.
SIGNATURE OF AUTHORIZED CERTIFYING OFFICIAL
Harold F. Reheis I
TITLE
Director
APPLICANT ORGANIZATION
Department of Natural Resources
Environmental Protection Division
DATE SUBMITTED
llahu
-------
ASSURANCES - NON-CONSTRUCTION PROGRAMS
T^ote: Certain of these assurances may not be applicable to your project or program. If you have questions, please contact the
awarding agency. Further, certain Federal awarding agencies may require applicants to certify to additional assurances.
If such is the case, you will be notified.
As the duly authorized representative of the applicant. I certify that the applicant:
1. Has the legal authority to apply for Federal assistance, and
the institutional, managerial and financial capability
(including funds sufficient to pay the non-Federal share of
the project costs) to ensure proper planning, management
and compledon of the project described in this application.
2. Will give the awarding agency, the Comptroller General of
the United States, and if appropriate, the State, through
any authorized representative, access to and the right to
examine all records, books, papers, or documents related
to the award; and will establish a proper accounting system
in accordance with generally accepted accounting
standards or agency directives.
3. Will establish safeguards to prohibit employees from using
their positions for a purpose that constitutes or presents the
appearance of personal or organizational conflict of
interest, or personal gain.
4. Will initiate and complete the work within the applicable
|i£ie frame after receipt of approval of the awarding
ncy.
5. Will comply with the Intergovernmental Personnel Act of
1970 (42 U.S.C. §§ 4728-4763) relating to prescribed
St.. idards for merit systems for programs funded under one
of the nineteen statutes or regulations specified in
Appendix A of OPM's Standards for a Merit System of
Personnel Administration (5 C.F.R. 900, Subpart F).
6. Will comply with all Federal statues relating to
nondiscrimination. These include but are not limited to:
(a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352)
which prohibits discrimination on the basis of sex; (c)
Section 504 of the Rehabilitation Act of 1973, as amended
(29 U.S.C. § 795), which prohibits discrimination on the
basis of handicaps; (d) the Age Discrimination Act of
1975, as amended (42 U.S.C. §§ 6101-6107), which
prohibits discrimination on the basis of age;
(e) the Drug Abuse Office and Treatment Act of 1972
(P.L. 92-255), as amended, relating to nondiscrimination
of the basis of drug abuse; (0 the Comprehensive Alcohol
Abuse and Alcoholism Prevention, Treatment and
Rehabilitation Act of 1970 (P.L. 91-616), as amended,
relating to nondiscrimination on the basis of alcohol abuse
or alcoholism; (g) §§ 523 and 527 of the Public Health
Service Act of 1912 (42 U.S.C. 290 dd-3 and 290 ee-3), as
amended, relating to confidentiality of alcohol and drug
abuse patient records; (h) Title Vm of the Civil Rights Act
of 1968 (42 U.S.C. § 3601 et seq.), as amended, relating
to nondiscrimination in the sale, rental or financing of
housing; (i) any other nondiscrimination provisions in the
specific statute(s) under which application for Federal
assistance is being made and (j) the requirements of any
other nondiscrimination statute(s) which may apply to the
application.
7. Will comply, or has already complied, with the
requirements of Titles II and ID of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of
1970 (P.L. 91-646) which provide for fair and equitable
treatment of persons displaced or whose property is
acquired as a result of Federal or federally assisted
programs. These requirements apply to all interests in real
property acquired for project purposes regardless of
Federal participation in purchases.
8. Will comply with the provision of the Hatch Act (5 U.S.C.
§§ 1501-1508 and 7324-7328) which limit the political
activities of employees whose principal employment
activities are funded in whole or in part with Federal
funds.
9. Will comply, as applicable, with the provisions of the
Davis-Bacon Act (40 U.S.C. §§ 276a-7), the Copeland Act
(40 U.S.C. §§ 874), and the Contract Work Hours and
Safety Standards Act (40 U.S.C. §§ 327-333), regarding
labor standards for federally assisted construction
subagreements.
Standard Form 424B (4-88)
Prescribed by OMB Circular A-102
AUTHORIZED FOR LOCAL REPRODUCTION
-------
EPA Project Control Number.
i® sj*
United States Environmental Protection Agency
Washington, D.C.
Certification Regarding
Debarment, Suspension, and Other Responsibility Matters
The prospective participant certifies to the best of its knowledge and belief that it and its principals:
(a) Are not presently debarred, suspended, proposed for debarment declared ineligible, or voluntarily
excluded from covered transactions by any Federal department or agency;
(b) Have not within a three year period preceding this proposal been convicted of or had a civil judgement
rendered against them for commission of fraud or a criminal offense in connection with obtaining,
attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a
public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft,
forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen
property;
(c) Are not presently indicted for or otherwise criminally or civilly charged by a government ant (Federal.
State, or local) with commission of any of the o(Tenses enumerated in paragraph (l)(b) of this
certification; and
(d) Have not within a three-year period preceding this application/proposal had one or more public
transactions (Federal, State, or local) terminated for cause or default
I understand that a false statement on this certification may be grounds for rejection of this proposal or
termination of the award. In addition, under 18 DSC Sec. 1001, a false statement may result in a fine of up to
$10,000 or Imprisonment for up to 5 years, or both.
Harnlri F Rphgis. Director
Typed Name & title of Authorized Representative
ihd.
lie.
Signature of Authorized Representative
Date
I am unable to certify to the above statements. My explanation Is attached.
-------
i£D SIta
:ertification Regarding Drug-Free Workplace
Requirements Grantees Other Than Individuals
This certification is required by the regulations implementing the Drug-Free Workplace
Act of 1988,40 CFR Part 32, Subpart F. The regulations, published in the January 31,1989 Federal Register require
certification by grantees, prior to award, that they will maintain a drug-free workplace. The certification set out below is a material
representation of fact upon which reliance will be placed when the agency determines to award the grant False certification or violation of
the certification shall be grounds for suspension of payments, suspension or termination of grant, or governmentwide suspension or debarment
(see 40 CFR Part 32, Sections 32.615 and 32.620).
The grantee certifies that it will provide a drug-free workplace by:
(a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use
of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be uken against
employees for violation of such prohibition;
(b) Establishing a drug-free awareness program to inform employees about •
(1) The dangers of drug abuse in the workplace;
(2) The grantee's policy of maintaining a drug-free workplace;
(3) Any available drug counseling, rehabilitation, and employee assistance programs; and
(4) The penalities that may be imposed upon employees for drug abuse violations occuring in the workplace;
(c) Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the
statement required by paragraph (a);
(1) Abide by the terms of the statement; and
(2) Notify the employer of any criminal drug statue conviction for a violation occurring in the workplace no later
than five days after such conviction; ricpLaceno
(e) Notifying the agency within ten days after receiving notice under subparagraph (d)(2) from an employee or otherwise
receiving a notice of such conviction;
(f) Taking one of the following actions, within 30 days of receiving notice under subparagraph (d)(2), with respect to any
employee who is so convicted -
(1) Taking appropriate personnel action against such an employee, up to and including termination or
(2) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehahabilitation program
approved for such purposess by a State, or local health, law enforcement or other appropriate agency;
(g) Making a good faith effort to maintain a drug-free workplace through Implementation of paragraphs (a),( b), (c), (d),
(e), and (f).
Inserted in the space below is the site(s) for the performance of work done in connection with the specific grants/cooperative
agreement^) for which this application is submitted.
205 Butler Street SE. 1152 East Tower
Atlanta. Fulton. Georgia 30334
Place of Performance (Street address, city, county, state, zip code)
Department of Natural Resources - Enviynmental Protection Division
Organization Name
Harold F. Reheis. Director
• t.nvi«nmental Protection Division
Name and Title of Authorized Representative
-------
CERTIFICATION REGARDING LOBBYING
Certification for Contracts, Grants, Loans, and Cooperative
Agreements
The undersigned certifies, to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned,
to any person for influencing or attempting to influence an officer or employee of an agency, a Member
of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection
with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal
loan, the entering into of any cooperative agreement, and the extension, continuation, renewal,
amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been paid or will be paid to 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 this
Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit
Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.
(3) The undersigned shall require that the language of this certification be included in the award
documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants,
loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This
certification is a material representation of fact upon
which reliance was placed when this transaction was made or entered into. Submission of this
certification is a prerequisite for making or entering into this transaction imposed by section 1352, title
31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty
of not less than $10,000 and not more than $100,000 for each such
failure.
Harold F. Reheis, Director
Typed Name and Title of Authorized Representative
Signature of Authorized Representative
Date
-------
FFY-97 GRANTS
AIR 105
RCRA
UST REG
SDWA
WQ 106
WQ 106
GRANT
GRANT
GRANT
GRANT
GROUNDWTR
TOTAL
BUDGET
BUDGET
BUDGET
BUDGET
BUDGET
PERSONAL SERVICES
2,557,019
2,646,516
209,782
1,366,630
282,886
2,417,129
9,479,962
TRAVEL
60,000
65,000
6,885
34,339
3,000
45,000
214,224
EQUIPMENT/VEHICLES
179,400
179,400
SUPPLIES
123,901
105,000
140,053
4,000
50,000
422,954
CONTRACTUAL
331,495
30,000
333,950
695,445
OTHER
419,853
179,294
46,312
13,643
323,545
982,647
TOTAL
3,671,668
3,025,810
216,667
1,587,334
303,529
3,169,624
11,974,632
STATE FUNDS
1,468,668
756,452
54,167
396,834
0
1,160,163
3,836,284
FEDERAL FUNDS
2,203,000
2,269,358
162,500
1,190,500
303,529
2,009,461
8,138,348
60.00%
75.00%
75.00%
75.00%
100.00%
63.40%
67.96%
-------
OCT-8886 lit
OFFICE OF PLANNING AND BUDGET
DIRECTOR'S flffift'
ZELL MILLER
TIM BURGESS
GOVERNOR
DIRECTOR
GEORGIA STATE CLEARINGHOUSE MEMORANDUM
EXECUTIVE ORDER 12372 REVIEW PROCESS
TO: Bruce Osborn
Georgia EPD
205 Butler Street, S.E., East Tower
Atlanta, GA 30334
FROM: / Tripp Reid, Administrator
Georgia State Clearinghouse
DATE: 9/25/96
SUBJECT: Executive Order 12372 Review
PROJECT: Performance Partnership Grant
STATE ID: GA960925001
CFDA#:
The State level review of the above referenced proposal has been completed. This proposal has
been found to be consistent with those state or regional goals, policies, plans, fiscal resources,
criteria for Developments of Regional Impact (DRI), environmental impacts, federal executive
orders, acts and/or rules and regulations with which the state is concerned. This memorandum
and its enclosures must be SENT TO THE FEDERAL FUNDING AGENCY. Thank you for
your cooperation.
Additional Comments:
No enclosures.
TR/ac
Form SC-4
January 1995
AN EQUAL OPPORTUNITY EMPLOYER
254 WASHINGTON ST., S.W. • ATLANTA, GEORGIA 30334-8500
-------
November 26, 1996
MEMORANDUM:
TO:
Ed Springer
FROM:
David Word
Bruce Osborn
SUBJECT:
PPA/PPG Financial Record Keeping
This is to summarize the financial and programmatic record keeping that EPD
has in place to track expenditures and record work activities. We are not planning to
change these systems during FFY 97 and with the award of the PPG and
implementation of the PPA.
First, Federal funds and expenditures will be tracked by program elements at
the same level as the FFY 96 Federal fund sources; ie. Water Quality 106,
Groundwater 106, Air Quality 105, Public Water System Supervision, RCRA, and so
forth.
Second, the organization of the Division's programs and subprograms will not
change and we remain structured along media lines; ie. Air protection, water
protection, drinking water, hazardous waste management, etc. These programs will
continue to keep activity records (time sheets) consistent with the previous grant
record keeping, thus making it possible to identify work effort at those levels.
If you need additional detail as to the financial management systems, please
call us at your convenience.
CBO:DMW:boa
cc: Harold Reheis
Bertha Turner
-------
State of North Carolina
Department of Environment,
Health and Natural Resources
James B. Hunt, Jr., Governor
Jonathan B. Howes, Secretary
Linda Rimer, Assistant Secretary
for Environmental Protection
PERFORMANCE PARTNERSHIP AGREEMENT
STATE OF NORTH CAROLINA
AIR QUALITY, WATER QUALITY, AND RCRA
FEDERAL FISCAL YEAR 1997
APRIL 1997
P.O. Box 27867, Raleigh. North Carolina 27611-7687 Telephone 919-715-4140
An £qual Opportunity-Affirmative Action Employer 50% Recycled / 10% Po$t-Consum®f Paper
-------
TABLE OF CONTENTS
I. Introduction
II. Media Priorities
- Air Quality
--RCRA
— Water Quality
III. Cross Media Priorities
— Community Based Environmental Protection
-- Pollution Prevention
- Risk Assessment
— Innovative Approaches for Environmental Management
- Environmental Permit Information Center
~ Environmental Justice
IV. Enforcement
— Responsibility of Respective Roles
— Implementation of Those Roles
V. Identified Needs for the North Carolina Department of Environment,
Health and Natural Resources
VI. Signed Agreement
-------
Performance Partnership Agreement with Region TV
and the State of North Carolina
For Fiscal Year 1997
T. Introduction and Scope:
This agreement represents a new approach to the federal/state relationship to protect
human health and the environment. It does not replace or supplant, categorical work plans or
supersede any other existing agreements. But, it is the first of its kind between Region 4 of the
U.S. Environmental Protection Agency (EPA) and the North Carolina Department of
Environment, Health and Natural Resources (DEHNR) because it lays out a framework for both
parties in fiscal year 1997 to begin the first of a multi-year effort to improve the working
relationship between the two ajgencies. This process has started with the EPA Regional
Environmental Strategic Plan (RESP), which recognizes that EPA, states and local government
must develop stronger and more collaborative partnerships to strengthen their joint capacity for
addressing environmental issues. It is our hope that this agreement will build on the RESP and
go even further in beginning the partnership between the state and the federal government
There are a number of other strategic changes as outlined in the RESP which EPA and
the State of North Carolina endorse as necessary to approach their missions. Briefly these are:
• the environment must be treated within an integrated and comprehensive framework;
• the role of the public in environmental protection must become larger and more profound;
• the private sector needs to become a partner with government in solving problems;
• the range of environmental strategies needs to be expanded to deal with more diversified
environmental issues and new types of clients; and,
• the tools and techniques employed for environmental management need to be improved
and more conscientiously employed.
Reforming oversight of state-run programs by focusing on results instead of state activities is one
way to facilitate these strategic changes. As EPA continues to delegate program responsibility to
states and decreases oversight of well- run state programs, the Agency will be free to redirect
resources to other activities such as establishing environmental training institutes, increasing
capacity to share environmental information through improved monitoring, and stressing state
and local capacity building and assistance functions, to name a few.
In the first phase of the Performance Partnership Agreement presented here, the document
articulates clear environmental priorities and expectations, discusses cross media initiatives,
identifies a new understanding of how enforcement actions will be taken, and outlines the critical
needs which will help attain environmental results. The parties recognize that in this phase
outcome measures to track environmental progress are not well defined as envisioned above. In
addition, public involvement in this process has been less than ideal; however, both of this issues
will be pursued more vigorously in subsequent years of this new process.
1
-------
This agreement has been entered into to foster cooperation and provide common direction
to EPA and DEHNR's environmental programs. The two agencies recognize that there needs to
be a link between the allocation of resources and attainment of environmental results. This
agreement contemplates a reduction in paperwork and oversight reform where appropriate; in
addition, this agreement represents an understanding that each agency should identify common
action, as well as pursue its own interests and needs. Categorical work plans and other
agreements can be used to outline these interests and needs.
DEHNR administers many federally delegated programs. The statutes and programs
covered in this agreement include the Clean Air Act, the Clean Water Act, and the Resource
Conservation and Recovery Program. It is our intention that in the next phase of the
Performance Partnership Agreement more of DEHNR's programs will be included.
This agreement is divided into five sections: priorities in the air, water, and RCRA
programs; cross media priorities; enforcement principles; needs identified between Region 4 and
DEHNR, and agreement signatures.
II. Media Priorities:
The following discussion outlines the major priorities for North Carolina in air, water and
RCRA. This discussion is general and does not offer the detail that are in the media specific
workplans, which are built on these priorities.
Air Quality:
One of the highest priorities for the Division of Air Quality is maintenance of the
redesignation of North Carolina's non-attainment areas. All three ozone nonattainment areas
(Charlotte/Gastonia, Greensboro/Winston-Salem/High Point, and Raleigh/Durham) and all three
carbon monoxide nonattainment areas (Charlotte, Raleigh/Durham and Winston-Salem) have
been redesignated from nonattainment to attainment. The division will continue to oversee the
inspection-maintenance program in these areas through periodic auditing. In addition, special
commitments via contingency plans have been made to put emission reduction measures into
effect should the areas experience exceedances of the NAAQS or the areas become non-
attainment in the future. Finally, these areas will be monitored and in the case of ozone, urban
airshed models are being developed.
A second priority for this division is implementation of the state's air toxics program.
Under the state air toxics program, applicants must adhere to a health based ambient air level
(aal) at the facility boundary. New sources or sources with major modifications will be required
to conduct an ambient aal evaluation with their permit application. For other facilities, an aal
evaluation will be done for the last non-boiler MACT for a given pollutant The North Carolina
General Assembly formed an air toxics working group and several changes from that working
body will be implemented during the coming year. The changes include: (1) initial modeling to
2
-------
be done by the division rather than the permit applicant; (2) acute irritants to be averaged over
one hour rather than fifteen minutes; (3) guidance to be developed for demonstrations of
economic hardship, technical infeasibleness, and inhabitability risk assessment, with an
accompanying pollution prevention plan; (4) documentation to be developed for the functions
and processes of the Secretary's Scientific Advisory Board on Toxic Air Pollutants; and (5)
increased efforts to be made by the division to identify and address high risk facilities or groups
of facilities. The air toxics working group will continue to consider additional issues.
A third priority for the section is issuance of Title V permits. All Title V permits must be
issued three years after EPA approval of the program; thus, air quality will be striving to meet
this December 15, 1998 deadline. All applications for all industry categories will be received
within the next few months. The division will be finalizing the Title V implementation
agreement which will clearly define each agency's role in the implementation of Title V
provisions of the Clean Air Act Amendments of 1990.
A final priority for the Division is customer service and public outreach in the wake of
implementation of the Clean Air Act Amendments of 1990. The 1990 amendments to the Clean
Air Act established many new and expanded programs to deal with air pollution problems. New
requirements for sources of hazardous air pollutants and acid rain pollutants, and for revamped
permitting of over 500 larger air pollution sources, mean that the division must aggressively
boost compliance assistance efforts.
RCRA:
The RCRA program is responsible for the oversight of facilities that manage hazardous
waste. Through permits, technical assistance, field inspections, and compliance orders, the
Hazardous Waste Section ensures that waste is handled in a secure manner with no impact to
people or the environment. The Section also ensures that each facility has a contingency plan in
place for responding to accidents that may occur.
By congressional mandate and by definition, RCRA is responsible for preventing
pollution from hazardous waste facilities. RCRA regulates persons who manage hazardous
waste and ensures that they follow safe management practices that prevent releases to the
environment. If and when releases occur from these facilities, RCRA is responsible for
remediation of all media affected by th6 release to minimize and control (i.e. prevent) further
pollution. RCRA is a multi-media program responsible for the impact from hazardous waste
facilities to soil, surface water, ground water, and air.
An additional component of preventing pollution and another strong priority of the
RCRA program is waste minimization. Recognizing that more waste produced means more
potential for pollution, the RCRA program views waste minimization as the "front end" of a
program to prevent pollution. North Carolina requires generators and treatment/storage/disposal
facilities to prepare waste minimization plans that may be reviewed by the state. RCRA
3
-------
inspectors visit sites to assist in plan preparation. The Hazardous Waste Section plans to enhance
that effort with new rules designed to clarify the implementation of the law. In addition to waste
minimization plans, North Carolina also requires large and small quantity generators to report
annually on waste minimization and generation information. A semi-annual newsletter entitled
"FOCUS" disseminates technical and pollution prevention information to both large and small
quantity RCRA generators, TRI reporters, and facilities which hold air and water permits;.
A high priority for a final permit decision is being placed on North Carolina's two boiler
and industrial furnace (BIF) facilities. These are the only two combustion units in interim status
in the state. In addition, North Carolina is taking the initiative to establish an indirect risk
assessment protocol that can be used for both of these BIF facilities.
Surface Water:
The Division of Water Quality has several priorities in the coming year including full
implementation of the basin wide management program, implementation of the wetlands
restoration program and implementation of the animal waste permitting and compliance program.
Each of these priorities are briefly discussed below.
Through the basin wide management program, the Division of Water Quality can
concentrate on a limited geographic area at a time and focus on all of the environmental factors
that need to be considered in water quality management Of the 17 major riverbasins in the state,
5 have completed the first round of basinwide plans. The section plans to move forward this year
to concentrate efforts on other basins. A notable exception is the Neuse River Basin plan, which
has been revised in light of the fish kills during the summer of 1995. The division has produced
a draft basin plan which went out for public hearing in November 1996, after being rescheduled
because of Hurricane Fran. On June 12th of this year, the Division of Water Quality will go back
to the Environmental Management Commission to request that the EMC adopt these rules. It is
anticipated that the rules will be revised to reflect the extensive public comments that were
received.
A second priority of the Water Quality Section is implementation of the wetlands
restoration program. A wetlands restoration program is needed in North Carolina for three key
reasons: (1) more than a third of historic wetlands in the state have been lost; (2) compensatory
mitigation is required, for large permitted wetland losses; (3) historical approaches to wetland
losses have not worked (i.e., private sector mitigation has failed to restore the ecological benefit
of lost wetlands).
The North Carolina General Assembly recently passed legislation which created and
funded this program - $9.2, million for acquisition of wetlands and funds for the administrative
costs of operating the program. The administrative costs necessary to implement and manage a
Wetland Restoration Program statewide will be used to support the following activities: target
sites for restoration and mitigation throughout the state of North Carolina; oversee contractors
4
-------
who would complete the actual restoration work; conduct mapping and functional assessment of
regions of the state; conduct basic planning work, such as compilation of wetland inventories,
maps and other available data and coordinate with other natural resource agencies, private sector
restoration experts and the academic community to develop comprehensive basinwide wetland
restoration plans; and, conduct basic landowner contact and negotiation,-since land acquisition is
a critical component of the wetland restoration program. A key priority this year will be staffing
the program and developing rules to implement the program.
A third priority for the Division of "Water Quality this year will be implementation of SB
1217 which created an animal waste permitting and compliance program for the state's roughly 9
million hogs (this number is the total average population and hence the amount of waste
produced at any given time). The Division will be hiring permitting and inspection staff and
working in conjunction with the Division of Soil and Water Conservation to regulate this sector
of the North Carolina economy. The Division of Water Quality and the Environmental
Protection Agency will further their work sharing efforts to address the animal waste,
management issue. Both parties will continue to discuss and implement the applicable
recommendations as identified in the 1997 program audit.
IH. Cross Media Priorities:
Several cross media initiatives are outlined below and specific needs based on these
initiatives follow in the next section.
Community Based Environmental Protection (CBEP).
DEHNR wants to garner support for its environmental programs in local communities.
The traditional approach of media-specific programs is effective and must continue to exist, but
these media programs can work together to apply their skills in a community. Also, by involving
the community and seeking their input as an integral part of the decision making, we can.identify
concerns and work toward solutions in a cooperative manner.
EPA has committed 20% of its resources to implement CBEP. The state wishes to
complement that effort and incorporate CBEP principles into our regulatory programs. The
following paragraphs discuss a few of the CBEP projects which are underway. We hope to
collectively identify more in the coming year.
North Carolina currently participates in The Southern Appalachian Mountains Initiative
(SAMI) and the Albemarle-Pamlico Estuary Program (APES). These are large scale CBEP
projects that are fully identified in other EPA documents (US EPA Region 4 FY-96 CBEP
Implementation Plan, Appendix and Comprehensive Conservation and Management Plan,
November 1994). On June 5th and 6th of this year, the North Carolina Department of
Environment, Health and Natural Resources in conjunction with the EPA, plan to host an APES
conference in New Bern, North Carolina to provide an update on implementation of the APES
5
-------
CCMP. The conference features technical presentations, policy discussions, and innovative
management programs pertaining to water quality, vital habitats and environmental stewardship
and we will examine needs for future management actions.
We believe that the CBEP concept can also include smaller projects that involve the local
community. For example, the RCRA section is looking at a project with Cleveland County,
North Carolina to provide a cooperative environment for industry to help small or resource
deficient companies within the community. Currently, the section is exploring the possibility of
having this project expand to include local citizens. We will look at potential projects in which
to apply this approach, but more importantly, we wish to begin thinking of CBEP as a general
approach to environmental protection.
This thinking is consistent with our basinwide management approach. North Carolina
considers the river basin to be one of the most important components of an "ecological address",
and the DEHNR Office of Environmental Education has begun to develop an environmental
education strategy for each of the major river basins, in North Carolina. The theme of the
environmental education strategy is based on two tiers: (1) the fact that individuals and
businesses work and live within a river basin and thus, their individual decisions and actions
impact the water quality in that basin; and (2) once individuals understand the relationship
between their actions and water quality, they can increase their knowledge about the impact of
individual behavior. Through environmental education, we hope to create partnerships and
relationships with local communities and governments to enhance the quality of environmental
management in North Carolina.
Pollution Prevention:
An essential component of DEHNR's goal to ensure a healthy environment and a sound
economy is to promote pollution prevention through the media regulatory programs and through
non-regulatory technical assistance. The Division of Pollution Prevention and Environmental
Assistance serves as the focal point for these efforts and the air, water and RCRA programs
integrate pollution prevention on a day to day business in their programs.
The Division of Pollution Prevention and Environmental Assistance provides technical
assistance, develops and presents training programs, awards grants for waste reduction projects,
leads the state's recycling market development program, develops and publishes a variety of
materials, maintains an information clearinghouse, collects and analyzes waste reduction data,
administers the Governor's Award for Excellence in Waste Reduction, and supports various
agencies on integrating waste reduction into policy and regulations.
As part of its initiative to integrate pollution prevention into the media regulatory ¦
programs the Division has been conducting half-day training sessions for new technical
employees in the environmental media programs. Other employees are also welcome to attend.
This training presents information on pollution prevention concepts, techniques and
6
-------
technologies, case studies, and resources available,
held with approximately 100 employees attending,
month with about 20 attendees per session.
Since April, six training sessions have been
Plans are to hold one training session per
Workshops for industry on specific processes such as vapor degreasing and chromium
electroplating have been jointly conducted by the Division, the regulatory media programs* and
the Office of the Small Business Ombudsman. These workshops have provided regulatory
information as well as options for compliance and pollution prevention. A workshop for wood
furniture manufacturers is scheduled for late summer.
Additional efforts to encourage pollution prevention through the regulatory programs
involves the increased use of Supplemental Environmental Projects.
Risk Assessment:
DEHNR formed a risk assessment working group in June 1995 to review the different
ways risk assessment was being conducted in the department and to develop a common protocol.
Members were appointed from DEHNR divisions involved in protection of human health and the
environment and regulation of locations where groundwater and soil could be affected by
environmental contamination.
In July 1996, the working group developed a document which describes procedures for
determining acceptable contaminant target concentrations. These procedures will promote
consistent decision making for locations regulated by DEHNR where soil or groundwater may
have been adversely affected by environmental contamination. These locations include
hazardous waste sites, hazardous sites, inactive and active municipal solid waste sites, leaking
underground storage tanks, and spill sites. The document presents a streamlined tiered approach
(Method 1, II and III) for evaluating risk, and each successive tier (or method) increasingly uses
more site-specific information to determine the target concentrations for groundwater and soil.
The document underwent a peer review for a thirty day time period, after which it was
sent out for public comment and three workshops. Currently, the Department is in the process
of convening a planning committee of stakeholders to evaluate how, and if, North Carolina
should implement this protocol throughout the regulatory divisions.
Innovative Approaches to environmental Management:
DEHNR is interested in pursuing innovative approaches to environmental regulation and
policies that will encourage companies to go beyond compliance. One program of particular
interest is the ISO 14000 environmental management standards. DEHNR has conducted a
preliminary ISO 14000 survey of 300 North Carolina companies covering 31 industrial sectors to
gauge interest and awareness of ISO 14000. DEHNR has also held a one-day internal workshop
on ISO 14000 for key personnel to introduce concepts and increase interest. The fall of 1996, a
7
-------
larger conference was convened with speakers from the ISO development process, industries,
and government.
An internal working group on environmental management systems has been formed with
representatives from the Division of Pollution Prevention and Environmental Assistance,
Division of Waste Management Hazardous Waste Section, Division of Air Quality, the Division
of Water Quality, and the Department of Commerce. The Working Group has undertaken as its
first task to draft a DEHNR policy statement on environmental management systems that
addresses the program's potential benefits for both the regulated community and state agencies.
The Working Group also plans to undertake the following: discuss what "regulatory flexibility"
may mean in DEHNR; arrange meetings with industries to discuss the potential for pilot projects;
continue a study which will help assess other states' strategies for addressing ISO 14000; and,
begin contacting industrial trade associations and environmental organizations to solicit their
oughts on state agency involvement with ISO 14000.
This initiative is in the early stages but DEHNR wants to explore innovative approaches
to environmental management which would encourage the development of Environmental
Management Systems, help the Department focus its resources most effectively and achieve a
greater level of environmental protection. We envision this initiative as our main effort to deal
with facilities who go "beyond compliance" with environmental standards.
Environmental Permit Information Center:
In Fiscal Year 1996, DEHNR established a Permit Process Action Team (PPAT) to study
and make recommendations on ways to improve the agency's permitting processes. PPAT
members represented a wide range of permitting programs and extensive experience with
environmental permitting. One of the team's recommendations was to establish a permit
information center that would be marketed statewide and handle a variety of functions.
Based on this recommendation, an Environmental Permit Information Center (EPIC) has
been established and began operations on July 1, 1996. Duties of this center include:
~Serve as a central source for copies of permit application forms;
~Determine what permits are necessary when contacted by clients;
~Identify, .and if needed, coordinate the development of application guidance
materials and training courses for permit applicants and consultants;
~Coordinate the standardization of the facility page in applications;
~Coordinate the improvement of application forms (general, industrial specific, small
business);
~Collect and analyze customer satisfaction information;
~Answer questions about permit applications;
~Keep a list of frequently asked questions to feed back into training effort and
guidance materials;
8
-------
~Distribute permit guidance materials;
~Update the current permit directory;
~Track permits and determine problems in applications that delay process and feed
this information back into the training effort and guidance materials;
~Provide link to regulatory divisions for regulatory interpretation and compliance
questions;
~Coordinate pre-application meetings, when requested;
~Develop permitting flow charts; and,
~Coordinate development of general permit.
The EPIC will be staffed on a rotating basis by permitting staff from the media programs.
Assignments to EPIC will range from 3 months to 1 year. These staff members will act as
contacts to the permit/regulatory programs. EPIC will be located in the Division of Pollution
Prevention and Environmental Assistance.
Environmental Justice:
The Division of Waste Management has an environmental justice committee to collect,
discuss, and disseminate information about environmental justice issues. The committee has
developed a method to help the division technical staff consider potential inequities to minority
and low-income populations around sites during permitting, enforcement, and othei^ regulatory
activities. This method uses the location of the site under review, and the locations of other
nearby sites as well as selected information about the populations surrounding these sites.
Although this particular method is a valuable tool for the regulator, the continuing education of
the division technical staff on the more intangible issues of environmental justice is an important
part of the overall goal of regulatory fairness. The division's intent is to ensure that all
environmental justice issues are taken into account during regulatory actions.
IV. Enforcement:
Enforcement is one of the many tools available to help achieve environmental outcomes.
The intent of this agreement is to move away from discussion of specific cases towards a
consideration of state enforcement programs and ways to work with the state to achieve
environmental goals. This section outlines the purpose and responsibilities of EPA and DEHNR
in enforcement
Purpose:
* The Performance Partnership Agreement (PPA) will define the partnership roles for EPA
and the State of North Carolina Department of Environment, Health and Natural
Resources (DEHNR)
9
-------
• In particular, the PPA will provide guidance for enforcement functions in negotiations of
Memorandums' of Agreement and workplans for air, surface water, and RCRA programs.
Responsibilities of EPA and DEHNR in Enforcement:
• The EPA will be the sole enforcement agency for assuring compliance with federal
consent decrees, consent agreements, federal interagency agreements, judgements, and
orders.
• The EPA will be the sole agency for enforcement of non-delegable program.
• The EPA will be the agency for enforcement of non-delegated portions of a delegated
program. When a program has adopted rules and has enforcement capability prior to
delegation, opportunity will be provided to the delegated program for response and
coordination with the EPA. The delegated program may request and receive referral for
these enforcement actions when appropriate.
• The EPA will be the lead agency for conducting federally initiated multi-media
inspections at federal facilities. These inspections will be coordinated with North
Carolina delegated programs. Enforcement actions identified from these inspections will
be coordinated with the North Carolina delegated programs.
• North Carolina delegated programs will be the lead agency for delegated program
initiated multimedia inspections at federal facilities. Delegated programs will take
enforcement action or coordinate with the EPA for referral of enforcement actions as
appropriate.
• The EPA will identify and notify delegated programs of corporate sources with
significant company wide non-compliance in multiple states. In coordination with North
Carolina delegated programs, the EPA will provide opportunity for determination of the
lead enforcement agency. Upon joint North Carolina and EPA determination that
multiple independent actions of states will not be as effective as a consolidated federal
action, the EPA will be the lead enforcement agency.
• The EPA and delegated North Carolina programs will jointly identify potential or actual
releases to the environment that threaten the health or environment of another state.
Delegated North Carolina programs will be the lead agency for enforcement against these
sources except when actual releases have a significant impact in another state. In this
case, the EPA will negotiate with the state to determine the lead enforcement agency.
10
-------
• Delegated North Carolina programs are responsible for identifying and establishing
priority enforcement actions against sources that pose the greatest risk to human health or
the environment or have histories of non-compliance. Priority and strategies to address
the greatest risk will be coordinated with the EPA. These efforts may be referred to the
EPA for enforcement actions.
• Delegated North Carolina programs are responsible for identifying the potential creation
of pollution havens in the state. Enforcement priorities and . strategies will be coordinated
with the EPA to identify, prevent, deter, and correct pollution havens. These efforts may
be referred to the EPA for enforcement actions.
• Delegated North Carolina programs will aggressively identify sources that engage in
criminal conduct and aggressively refer criminal enforcement opportunities to the EPA.
State criminal enforcement actions that are jointly determined to be equivalent to federal
actions may be pursued by delegated North Carolina programs.
• Delegated North Carolina programs will initiate enforcement to stop illegal activities that
pose actual or potential harm to public health or the environment. Delegated programs
will coordinate with the EPA priorities and strategies to ensure a strong enforcement
effort Delegated programs may coordinate and refer any of these activities to the EPA
for enforcement.
Joint Role:
• EPA has a responsibility to ensure compliance with MO As and work plans. To fulfill
this responsibility, North Carolina and the EPA will provide timely reports and share
information and data on enforcement activity. Further, EPA and North Carolina agree to
develop performance measures that monitor the implementation of enforcement activities.
Reporting and monitoring performance will be negotiated on a program by program
basis.
• North Carolina commits to working with EPA on innovative enforcement processes.
Cross media elements include at minimum: community based environmental protection,
environmental justice, pollution prevention, compliance assistance, educational or
training outreach, focus on geographic regions or industry sectors, and multimedia
initiatives. The opportunity for applicability of specific cross media enforcement
opportunities varies among the environmental programs. North Carolina will identify
opportunities for innovative enforcement procedures and work with EPA to determine the
most effective means to incorporate these into MO As, and work plans.-At present, North
Carolina is working on a Department policy for Supplemental Environmental Projects
(SEPs).
11
-------
Summary:
* EPA and North Carolina commit to the continuing development of a strong partnership
between federal and state environmental programs. The PPA for enforcement helps
define this interdependent relationship. However, due to the dynamic nature of this
working relationship, there will be differences in perspectives on a variety of issues. The
resolution of all issues in implementation of the PPA will be initiated at the lowest
organizational unit. If resolution cannot be achieved, the issue and recommended
solution will be referred to the Steering Committee. North Carolina's members of this
Steering Committee consist of Environmental Division Directors and the Assistant
Secretary for Environmental Protection. EPA's members of this Steering Committee
consist of the equivalent Division Directors and Deputy Regional Administrator. If the
Steering Committee is unable to achieve resolution, then the decision will be elevated to
the Secretary and Regional Administrator for final resolution.
V. Identified P?eeds for the Department of Environment Health and Natural Resources;
In compiling this agreement, staff in DEHNR identified a number of items and needs
which would benefit the Department. A number of these items are IPA opportunities and they
are listed by division below. Others are not activities that EPA does in support of DEHNR's
programs but are additional actions DEHNR desire to see EPA take.
IPA Needs'.
Division of Water Quality:
* Technical support is needed to help develop the Division of Water Quality's compliance
database the so-called Compliance Monitoring System (CMS), to interface more effectively with
EPA's Permit Compliance System (PCS).
Division of Air Quality:
* Staff support is needed to help the division improve the state's ambient air quality trends
reports and to help with emission inventories.
* Technical staff support is needed to merge the EPA hazardous air pollutants into North
Carolina's toxics program and examine ways of performing risk management
Division of Pollution Prevention and Environmental Assistance:
. * Staff support needed to provide technical assistance in the area of environmental
management systems (EMS) including the ISO 14000 model.. This person will help coordinate
activities involved in the promotion of environmental management systems including workshop
12
-------
development, CMS implementation assistance and technical involvement with pilot projects.
* Technical staff support needed for evaluating trends in North Carolina's environmental
quality. This person will assist in the statistical evaluation of multi-media environmental
monitoring data, especially trend analyses. This person will further assist in the writing and
assemblage of the North Carolina Environmental Indicators document
Additional Actions Requested:
* Delegation of federal 503 regulations governing wastewater treatment plant sludge. This
delegation would simplify and lesson the regulatory burden now borne by waste water treatment
plants in disposing of the sludge generated by the treatment process.
* Renegotiation of the current Memorandum of Agreement (MOA) for the NPDES
program, which has been in effect since May 9,1994. Reductions can be made in oversight and
reporting requirements which will allow more efficient use of resources.
VL Agreement:
This agreement is hereby entered into the 29th day of April, 1997 and remains in effect
unless amended by mutual consent
Hankinsoi
Regional
Assistant Secretary for Environmental
Protection
North Carolina Department of Environment,
Health and Natural Resources
U.S. Environmental Protection Agency
Region 4
13
-------
1 U I I " 11." J I 1
fUE L10 It'll"
riii'i fi'J. 0Ull4blW4U
Agreement
between
The Mississippi Department of Environmental Quality
and
Region 4 of the United States Environmental Protection Agency
For the period April 15, 1997, through September 30,1997
Overview
The Mississippi Department of Environmental Quality (MDEQ) has the fewest employees of any state
environmental agency in Region 4 of the United States Environmental Protection Agency (EPA). In the
past, implementation of EPA program delegations has at times challenged MDEQ's limited resources. In
an effort to help MDEQ avoid such problems in the fliture, EPA has contracted with the consulting
firm of A. T. Kearney to assist MDEQ in re-engineering the Department's core business processes,
beginning with those processes housed in MDEQ's Office of Pollution Control (OPC). The need to
become more efficient and achieve better results without the expectation of significant additional
resources is the primary reason for OPC to re-engineer its processes. Paradoxically, the agency's
relatively small number of employees make it an ideal pilot for the common sense regulatory approaches
EPA is promoting. OPC is small enough that regulatory reinvention is manageable, with EPA assistance.
Moreover, because state environmental agencies implement most federal environmental regulations, if
EPA is to succeed in creating flexible, results based regulation, it must do it in large measure indirectly,
by empowering state agencies to do it
This Agreement between MDEQ and EPA is for the period April 15, 1997, through September 30,
1997. [t establishes a formal process for regularly scheduled communication between the senior
managers of both agencies while MDEQ's processes are being re-engineered. Once implementation of
the new processes begins, more substantive PPA's and Performance Partnership Grants to promote
effective use of the limited resources available for environmental regulation in Mississippi will be
possible.
Close communication between MDEQ and EPA senior managers during MDEQ's re-engineering
project is essential for at least three reasons. First, re-engineering will require major time commitments
from MDEQ program managers and other program staff. While MDEQ anticipates meeting its existing
grant commitments, frequent communications between EPA and MDEQ can provide early warnings if
problems of excessive workload arise. EPA is open to discussions of workload, work processes, and
how MDEQ and EPA work cooperatively, as these are integral to the reinvention process. MDEQ will
use the normal grant work planning processes to change grant commitments, if changes are needed.
Second, effective re-engineering requires (re)design of processes on a "clean sheet of paper." Close
communication between senior managers for MDEQ and EPA can foster the innovation and creativity
necessary to re-engineer existing processes. Third, MDEQ will be awarded a One Stop Reporting
Demonstration Grant from EPA. As MDEQ, with A. T. Kearney's assistance, re-engineers its core
processes, the Department will engineer one stop reporting into those newly designed processes. This
effort to construct a one stop reporting system as MDEQ changes its processes will require close
coordination between senior staff in both agencies to assure that MDEQ's one stop reporting system
both (1) takes full advantage of EPA's own efforts to reduce and streamline reporting requirements
1
-------
l1ri[-U-3l I'lU't id-0<
^UdLlC INt*
FAX NO. 6019615349
P. 03
and (2) remains consistent with federal requirements.
Frequent Communications
EPA will use its Region 4 Performance Partnership Agreement/Performance Partnership Grant
(PPA/PPG) Coordinating Committee to keep abreast of reinvention activities by MDEQ and to manage
overall EPA participation. The Committee is composed of senior level representatives of the Deputy
Regional Administrator and Division Directors. As needed, the Committee is available for conference
calls and meetings to discuss changes in process and directions. EPA also will name a single, senior
level individual to serve as a project manager for PPA development and reinvention activities with
MDEQ. This person will be responsible for informing senior EPA managers of progress and obtaining
whatever EPA participation will be needed.
MDEQ will use the Steering Committee for the OPC re-engineering project to coordinate with EPA's
project manager for PPA development and with the Region 4 PPA/PPG Coordinating Committee. Sam
Mabry, MDEQ's Planning and Policy Coordinator, serve as MDEQ's project manager for PPA
development, with responsibility for obtaining whatever MDEQ participation will be needed.
Next Steps
MDEQ and EPA anticipate significant improvements in processes due to this reinvention effort. We
expect these changes will result in a PPA for FY 1998 and a PPG for FY 1999. The PPA will lay out
how EPA and MDEQ will work harmoniously together once processes have been changed. The PPG
will enable MDEQ and EPA to work together even more closely in targeting Federal grant dollars to
meet Mississippi's environmental priorities.
Existing Agreements
Nothing in this agreement supercedes any other agreement now in effect between MDEQ and EPA.
Agreed to:
JJl. Palmer,
"Executive Dire*
.Date: 6/f *¦/f ?
Mississippi Department of Environmental Quality
Joffn Hankxnson
Regional Administrator
(J, S. Environmental Protection Agency, Region '4
2
-------
Cardinal0
-------
HAY-02-97 11:57 FROM:
ID:
PAGE 2/6
May 1, 1997
Pvr
-/a
,^Oaa-
— ^2.4# ft $3%
TO THE REGIONAL NPS COORDINATORS AND NPS CONTROL BRANCH: — |>^- office
Attached is a 4-page document that the Coastal States Organization provided to NOAA and EPA
to outline their concerns with CZARA and suggest modifications to our approach. Earlier today,
I e-mailed or gave you a document that NOAA and we drafted in response, which was'intended
primarily not to provide yes or no answers but rather to identify how we got here, i.e., what has
been said about the subjects covered by the CSO letter in various documents, including section
6217 itself, the Congressman Studds statement accompanying Section 6217; the January 1993
program guidance; the January 6, 1995 letters to ASIWPCA and CSO; the followup March 1995
flexibility guidance; and a current draft of guidance on developing strategies under Condition
XIV.
We will have our first conference call with CSO/ASIWPCA ^n Thursday, May 8.\Let me
know if you have any specific thoughts.
Dov Weitman
-------
S1AY-02-97 11:57 FROM:
^ . a ID: PAGE 3/6
Principles Tor Effective Coastal Nonpoint Pollution Control Programs
1) Collaborative-Partnership
• The 6217 program is predicated upon a strong partnership between water
quality and coastal zone management programs at both the state and
federal level.
• One aspect of the collaborative partnership necessary for successfiri
6217 program development and implementation is that NOM aid EPA
will help ensure that management measures are incorporated into federal
activities and on federal lands.
2) Public Acceptance and Support
• The program will require public understanding of the need to control"
ncinpoint source pollution. There must also be public acceptance and
support for the means of controlling nonpoint sources.
• The means for controlling nonpoint pollution need to be affordable and
have an appreciable effect on the delivery of pollutants to public waters.
3) Enforceable Policies as Backup
¦ Voluntary implementation can build a foundation for nonpoint control
programs to ensure that coastal water quality is improved and maintained.
• When other mechanisms are inadequate, enforceable policies should be
availahle and used as backup authorities where necessary to protect
water quality.
4) Program Accountability and Adaptability
• Nonpoint control programs need to be accountable for making
measurable progress in meeting the objectives of the program.
• Nonpoint control programs need to be able to change course when it
becomes apparent that certain control strategies are not effective or
feasible.
« Nonpoint control programs need to be tailored to state needs and contain
measures adaptable to regional diversity.
saartlQB
—MSN
Page 1 of
IVXXIMSisfvUX XVd
tot-a m ttaoj TMCXLIO
WObd iridW-f'. /RKl-LPV-cj
-------
iMAY-02-37 11:50 FROM:
ID:
PAGE 4/6
5) Prioritized Program Implementation
• State and local governments need to ba able to focus on their priorities?
either geographically or categorically, that eve critical to improving and
protecting ooastal waters.
6) Adequate Financial Support
• Significantly more resources, from both the state and federal level, are •
necessary to fully implement successful coastal nonpoint source
propams.
7} Integration with Other Programs
• Coastal nonpoint source programs need to be structured so that they can
be integrated into other on-going resource management programs.
• NOAA and EPA should ensure that their other existing programs support
and integrate with 6217. Additionally, bridges should be built to other
federal programs with nonpoint components.
Major Areas of Concern with CZARA §6217
• Penalties
• insufficient State and Federal Resources to Meet Implementation Objectives
• Targeting (prioritization)
• Timeframes for Meeting Conditions
• Timeframes for Implementing the Program
• Economic Feasibility
Specific Recommendations for Administrative Changes:
General
Recognize that there are neither sufficient state nor federal resources to meet the
implementation objectives of the guidance. Federal expectations of the states
regancfing further development and implementation of the program must reflect thjs
reality.
Page 2 of 4
-------
MAY-02-97 11:58 FROM:
ID:
PAGE 5/G
ooastal resources and the ability of the state to make progress. K is more
prudent to expend limited resources establishing programs to implement
measures that wilt significantly improve coastal water quality.
Rather than attempt to tackle all nonpoint sources along the coast, the program,
and limited state resources, needs to be targeted to priority waters where the
state is most capable of demonstrating the effectiveness of the program. States
should be allowed to prioritize the areas where measurable improvement in
implementation will be demonstrated. The states may expect to make
reasonable progress or leverage resources by targeting implementation to
particular watersheds or communities. The increasing watershed-based focus of
local and state programs requires that the 6217 program be able to pursue a
watershed option. Allow states to take advantage of local support or ongoing
siate activities by prioritizing the areas of implementation.
Enforceable Policies and Mechanisms
Currant Standard 3: Only programs supported by explicit state regulations thai
require management measure implementation receive full approval.
Recommended Alternative 3: Programs that have a demonstrated history of
implementation aid substantial compliance shall receive full approval.
Rationale: Once a state has demonstrated the ability of a program to implement the
management measure, the exact implementation mechanism is not pertinent to
protection of coastal water quality. Programs supported by explicit state taw aire
as vulnerable to change aid funding cuts as those programs that certify federal
permits, or manage cost-share funds.
Timeframes
Current Standard 4: The Flexibility guidance allows up to five years for states to
complete program development The Flexibility guidance provides states until
the year 2004 to fully implement the (g) measures, and until 2007 to implement
additional measures.
Recommended Alternative 4: Dependent on what other changes are made to the.
program guidance, appropriate timeframes have to reflect the objectives of Jh9%
program and available resources.
Rationale: Realistic timeframes hinge on addressing the previously mentioned
administrative issues. However, even if all the changes can be made, the long-
term implementation of the program must be treated fike other aspects of the
CZM program; that is, states are continually assessing and improving their
individual programs to address raw problems, technologies, and knowledge.
The nonpoint program should be no different Expecting ft to be fimy
implemented in the next 5 to 10 years is not realistic.
Page 4 of 4
V d
unx-i
1aL-4QT7 : 7 / CC I _ I Q c
-------
¦MAY-02-97 11:5B FROM:
ID:
PAGE G/G
Targeting
An iterative, targeted approach to Implementation Is necessary to ensure program
efficacy. This incremental approach to the program is particularly necessary given the
existing funding constraints.
Current Standard 1. Ensure widespread implementation of the management
measures.
Recommended Alternative 1: States should be required to demonstrate measurably
improvem&nt in either the implementation of the management measures ofthe
extent to which designated uses and water quality standards are being met or*
through a examination of both of these approaches.
Rationale: States should be provided with alternative approaches to measure progress
towards meeting the objectives of the coastal nonpoint source control program.
The implementation test of "measurable improvement' ensures program
accountability while allowing for the differences between state prograiVts and
resources. A state with no existing program to address a particular NPS source
faces a newly impossible task in meeting the "widespread implementation* test
by the year 2004. They will, however, be able to achieve significant measurable
improvement from their current situation. Additionally, NOAA and EPA must be
flexible in defining 'measttfable improvement". A requirement for 20%
improvement in implementation may be a reasonable goal for a new NPS
program. However, a mature program with existing compliance rates of 65%
may have difficulty in showing a 20% improvement
The overall goal of the §6217 legislation Is to improve coastal water quality.
Environmental indicators provide a measurement tool to quantitatively evaluate
progress toward specific goals and milestones developed by the states fbrjMr
coastal waters. EPA is actively promoting this approach as part of the
Government Performance and Results Act, but has yet to develop specific
indicators for the coastal environment A NOAA/State CZM Program partnership
to develop indicators in this area would facilitate integration of Clean Water Act
goats (Section 106; 303(d); 305(b); 319, and 604(b)) with CZMA6217.
Current Standard 2: All management measures are equal and must therefore be
implemented equally throughout the 6217 management ana.
Recommended Alternative Z Categorical and Geographical Prioritization: States can
prioritize categorically and/or geographically (particularly by watersheds) to
reflect their water quality improvement goals.
Rationale: Certain management measures are more critical than others to protection
of coastal water quality. Allow states to prioritize the implementation of
management measures to reflect the importance of the measure In protecting
Page 3 of 4
5 d
-------
Lotus cc:Mail For: Betty Barton
uthor: dov weitraan at X400
ate: 04/30/97 08:03 PM
Priority: Normal
TO: BETTY BARTON at REGION4
TO: DAVID RATHKE at R8CCP03
TO: sam ziegler at X400
TO: Christine reichgott at X400
TO: sandra fancieullo at X400
TO: donna somboonlakana at X400
TO: hank zygmunt at X400
TO: thomas davenport at X400
TO: brad lamb at X400
TO: alan everson at X400
CC: Steven dressing at X400
CC: robert goo at X400
CC: john kosco at X400
CC: kristen martin at X400
CC: ed drabkowski at X400
CC: rod frederick at X400
CC: amy gambrill at X400
CC: stu tuller at X400
CC: Christopher zabawa at X400
Subject: Reply to States
Message Contents
The coastal states, through CSO (with the consent but fairly passive
participation by ASIWPCA) has expressed an interest in making the CZARA program
more flexible and in tune with what they believe or the fiscal, programmatic,
and political realities. They prepared a summary of their concerns, and NOAA
and EPA faxed the attached response just this afternoon to CSO. I will send
at copies of the incoming from CSO, but since our response summarizes the CSO
aper's main points, you won't need the incoming to get the gist of what is at
^ssue.
we will be having conference call with representative State folks every week ot
two. The first call will be May 8 at 1:00 Eastern time. We could have one or
two Regional people join us in the group that is doing the "negotiating". Let
me know if you are interested; be prepared to do real work.
as you can see, our initial response here is fairly noncommittal, but we will
soon enter into serious negortiations, at least tentatively, which is shy I am
contacting you at this time. Nothing would be done final until we get input
from all concerned interests, including environmental groups. the goal is to
make any changes to current program approaches by the end of 1997.
Please share any comments or conerns with me by Fax, phone, or Email
Gbnii/sis
-------
Page 1
NOAA/EPA RESPONSE TO CSO PAPER
NOAA and EPA welcome the opportunity to work with the coastal states and territories subject
to Section 6217 of the Coastal Zone Act Reauthorization Amendments of 1990 (CZARA) to
resolve any remaining issues with the Coastal Nonpoint Program. NOAA and EPA are providing
this paper in response to the issue paper developed by the Coastal States Organization (CSO) on
suggested changes to the Coastal Nonpoint Program. We have tried to provide clear responses to
CSO proposals and, where appropriate, have referenced the statute and existing NOAA/EPA
guidance. We have also identified a preliminary list of issues and questions to help us understand
where the focus of our discussion should be - statute, guidance, interpretation, etc.
I. RESOURCES and TIMEFRAME (GENERAL and TIMEFRAME from CSO paper)
CSO Paper:
Federal expectations of the states regarding further development and implementation must
reflect that there are neither sufficient state nor federal resources to meet the
implementation objectives of the guidance.
Current Standard 4: The Flexibility Guidance allows up to five years for states to complete
program development. The Flexibility Guidance provides states until the year 2004 to fully
implement the (g) measures, and until 2007 (2009) to implement additional measures.
Recommended Alternative 4: Dependent on what other changes are made to the program
guidance, appropriate timeframes have to reflect the objectives of the program and
available resources.
NOAA/EPA Response:
NOAA and EPA agree that implementation of section 6217 will require additional
resources and time in order to achieve program goals.
Relevant Background:
RESOURCES
A. CZARA: financial assistance [see §6217(f)] (for use in developing a State program) and
authorizations [see §6217(h)]: (I) $6,000,000 for fiscal year 1992; (ii) $12,000,000 for fiscal
year 1993; (iii) $12,000,000 for fiscal year 1994; and (iv) $12,000,000 for fiscal year 1995.
Appropriations under CZARA were as follows: (I) $2,000,000 for fiscal year 1992; (ii)
$2,000,000 for fiscal year 1993; (iii) $4,000,000 for fiscal year 1994; and (iv) $5,000,000 for
fiscal year 1995.
-------
Page 2
B. January 1993 Program Development and Approval Guidance:
(II.D - p. 7): "Since funds will be limited, state coastal agencies are encouraged to work closely
with state nonpoint source agencies and other appropriate Federal, state, regional and local
agencies to develop their coastal nonpoint programs. Funds under section 319(h) of the CWA are
available for program implementation."
(III.C.3 - p.20): "a description of how the lead agency expects to implement the program
including, for example, the number of staff and general responsibilities, cost of the program and
potential funding sources."
C. January 6. 1995 letter from Hall CNOAA1 and Perciasepe fEPAl to Beam fCSCT):
(p. 2): "Implementation activities would become eligible for Clean Water Act §319(h) funding
upon either full or conditional approval."
D. March 16. 1995 Flexibility Guidance:
(Targeting, p. 4): "NOAA and EPA recognize that states and territories are faced with limited
resources in developing and implementing their coastal nonpoint programs. We agree that limited
resources will necessitate implementation of the management measures incrementally."
E. April 4. 1996 letter from Perciasepe (EPA1 to Governors:
"...affirm that Clean Water Act Section 319 funds can be used to fund projects that implement
approved coastal nonpoint programs."
TIMEFRAME
A. CZAR A: Timeframe established for submittal of programs and compliance with 306(d)(16)
[see §6206(b)] (Not later than 30 months after the date of the publication of final guidance
under subsection (g)), review and approval [see §6217(c)(1)], penalties [see §6217(c)(3) and (4)],
and authorizations [see §6217(h)],
B. January 1993 Program Development and Approval Guidance (pp. 43-451:
*¦ (g) measures: within 3 years of program approval
~ additional measures: within 8 years of program approval
»• conditional approval: one year with an additional year possible (for enforceable policies
and mechanisms only; does not alter program implementation schedule)
C. January 6. 1995 letter from Hall CNOAA*) and Perciasepe (EPA) to Beam fCSCT):
-------
Page 3j]
~ conditional approval: as appropriate up to 5 years
~ (g) measures: extended from 3 years to 5 years for existing sources, beginning at either
full or conditional program approval
~ new sources would continue to implement management measures as they come online
D. March 16. 1995 Flexibility Guidance:
~ until the year 2004 to fully implement the (g) measures
~ until 2009 to fully implement coastal nonpoint programs, including additional management
measures
Questions/Issues:
RESOURCES
1. Does CSO envision that there will be new resources available to implement the program -
either through appropriations for 6217, increases in 306/319, or state dollars? Would it be
useful for CSO (with NO A A/EPA assistance) to conduct a review of available funding
sources?
2. It is reasonable to assume that CZARA envisioned the private sector bearing a substantial
portion of the cost for implementation. What does CSO see as reasonable in terms of
government vs. private sector investment?
3. Are there certain measures that have associated higher financial needs? Should we factor
in financial needs as part of timeframes?
TIMEFRAME
1. The current schedule calls for program implementation (including the implementation of
additional management measures) to be completed by 2009. Assuming we issue findings
in the near'term (1997), there would be 12 years provided for full program
implementation. Recognizing the dependence of timeframes on other issues, does CSO
have any preliminary ideas on what might be realistic in terms of implementing the
program?
2. Would it be worthwhile to consider assigning different timeframes for different
management measures? In another context, would it be appropriate to establish shorter
timeframes for "priority" sources or areas, and provide longer timeframes for other
sources?
H. PRIORITTZ ATION/T ARGETING
CSO Paper:
-------
Current Standard 1: Ensure widespread implementation! of the management measures.
Recommended Alternative 1: States should be required to demonstrate measurable
improvement in either the implementation of the management measures or the extent to
which designated uses and water quality standards are being met.
Current Standard 2: All management measures are equal and must therefore-Jje
implemented equally throughout the 6217 management area.
Recommended Alternative 2: Categorical and Geographical Prioritization: States can
prioritize either categorically or geographically to reflect their water quality improvement
goals.
NOAA/EPA Response:
NOAA and EPA agree that states should be provided with alternative approaches to
measure progress towards meeting the objectives of the coastal nonpoint program. NOAA
and EPA agree that states need to focus limited resources on preventing and controlling
significant adverse effects of nonpoint source pollution on living coastal resources and
human health and that states will need to have sufficient flexibility to prioritize their
implementation activities.
Relevant Background:
A. Legislative History - Floor Statement by Studds:
"The requirement that states develop and implement these management measures has been
intentionally divorced from identified water quality problems because of the enormous difficulty of
establishing cause and effect linkages between land use and water quality.. .. [TJhe fact is that,
with few exceptions, neither states nor EPA have the money or the time to create the complex
monitoring programs that would be required to document a causal link between specific land use
activities and specific water quality problems. Under the core program established in subsection
(b), states will be able to concentrate their resources on developing and implementing measures
that experts agree will reduce pollution significantly."
B. CZARA:
§6217(a): "The purpose of the program shall be to develop and implement management measures
for nonpoint source pollution to restore and protect coastal waters..."
§6217(b): "Each State program under this section shall provide for the implementation, at a
minimum, of management measures in conformity with the guidance published under subsection
(g), to protect coastal waters generally..." and shall also contain a process for implementation of
additional management measures applicable to the land uses and areas identified pursuant to
sections 6217(b)(1) and (2).
-------
Page 51
C. January 1993 Program Development and Approval Guidance:
(I3I.C.1 - p. 13): "NOAA and EPA may allow a state to exclude some categories, subcategories
or sources from the requirements of its coastal nonpoint program. An exclusion may occur under
two scenarios: (1) if a nonpoint source category or subcategory is neither present nor reasonably
anticipated in the 6217 management area, or (2) if a state can demonstrate that a category,
subcategory or particular source of nonpoint pollution does not and is not reasonably expected to,
individually or cumulatively, present significant adverse effects to living coastal resources or
human health."
(p. 45): "...schedule should ensure that sources having the most significant impact on coastal
waters are addressed first."
D. January 6. 1995 letter from Hall rNOAA1) and Perciasepe (EPA') to Beam CCSOI:
(p. 2 and 3): NOAA and EPA would defer to a State 6217 management area which is less
extensive than the NOAA recommendation unless NOAA and EPA determine that the area
excludes: (a) existing land and water uses that reasonably can be expected to have a significant
impact on coastal waters of the State, or (b) reasonably foreseeable threats to coastal waters from
nearby activities landward of the State's 6217 management area.
States would have greater flexibility for phasing in necessary nonpoint source controls within the
extended timeframes.
E. March 16. 1995 Flexibility Guidance:
(p. 4-5): "NOAA and EPA recognize that states and territories are faced with limited resources in
developing and implementing their coastal nonpoint programs. We agree that limited resources
will necessitate implementation of the management measures incrementally."
F. October 2. 1996 Draft Additional Information on Strategy Conditions
(p. 3 and Appendix): Describes the kinds of information that might be included, giving
considerable flexibility in the kinds of indicators and the level of improvement that could serve as
the basis for evaluation.
Questions/Issues:
1. Does CSO envision that geographic prioritization will occur within a larger 6217
management area, i.e., targeting certain watersheds within a more broadly defined
management area?
-------
Page 6
2. Does CSO envision that the criteria for geographic prioritization would based on physical
boundaries (watershed boundaries, political jurisdictions, etc.) or environmental factors
(water quality data, etc.)? Would areas receive attention even if there is a lack of
information on water quality?
3. Does CSO envision using watersheds, subwatersheds or smaller units as the-threshold for
geographic prioritization?
4. Does CSO envision that the criteria for categorical prioritization would be based on
management measure categories (e.g., agriculture), subcategories (e.g., roads, highways,
and bridges) or individual measures (e.g., preharvest planning)? How would states
determine which management measures to focus on - significance of the source, state
capacity/resources available to address the source, community support, etc.?
5. How would states determine where to prioritize? Is the assumption that the program
would address the most significant sources first and then move on to other sources as time
and resources allow?
6. Does CSO seek to prioritize based on factors such as where the state is most capable of
demonstrating effectiveness, where states may expect to make reasonable progress (as
opposed to where they may not?) or leverage resources, and where states may take
advantage of local support?
m. ENFORCEABLE POLICIES AND MECHANISMS
CSO Paner:
Current Standard 3: Only programs supported by explicit state regulations that require
management measure implementation receive full approval.
Recommended Alternative 3: Programs that have a demonstrated history of
implementation and substantial compliance shall receive full approval.
NOAA/EPA Resnonse:
Depending on the meaning of the terms "demonstrated history of implementation" and
"substantial compliance," NOAA and EPA believe that we have already provided a
framework for this in the January 6,1995 letter and March 16,1995 Flexibility Guidance.
Relevant Background:
A. CZARA [amended §306(d)(16) of the CZMAJ: "[bjefore approving a management program
submitted by a coastal state, the Secretary shall find the following:... [t]he management program
contains enforceable policies and mechanisms to implement the applicable requirements of the
-------
Page 7
Coastal Nonpoint Pollution Control Program of the State required by section 6217 of the Coastal
Zone Act Reauthorization Amendments of 1990."
B. January 1993 Program Development and Approval Guidance:
(p. 35): "States can design a coastal nonpoint program that uses a variety of effective regulatory
and/or non-regulatory approaches in order to meet the requirement for enforceable policies and
mechanisms. Non-regulatory approaches must be backed by enforceable state authority which
ensures that the management measures will be implemented. States are expected to demonstrate
that they have the authority to take enforcement actions where incentive or other programs do
not result in implementation of management measures, or where significant harm to coastal
waters is found or threatened."
(p. 38): "Although regulatory approaches may be well suited for certain nonpoint sources, they
may be difficult to design and implement for other sources. In addition, efforts to control some
nonpoint sources historically have relied almost solely on non-regulatory programs.
Accordingly, a state has the flexibility to employ economic incentive, disincentive, or innovative
approaches to address these types of sources, provided that the state can ensure such approaches
will result in the necessary implementation of the (g) management measures and additional
management measures. States will have to include back-up enforcement authority for voluntary
programs."
(p. 40): "A state coastal nonpoint program should indicate clearly what approaches and
authorities the state will rely on to meet the requirement for enforceable policies and
mechanisms and should describe how the approaches will ensure the necessary implementation
of the management measures."
C. January 6. 1995 letter from Hall (NOAA) and Perciasepe (EPAt to Beam fCSO'):
"We feel it is appropriate to expand our view of what could constitute acceptable back-up
enforcement authorities. Such authorities could include, for example, 'bad actor' laws,
enforceable water quality standards, general environmental laws and prohibitions, and other
existing authorities the States might point to that will accomplish the implementation of
management measures without requiring new, more specific authorities."
EPA and NOAA would conditionally approve State programs up to 5 years to give all parties the
opportunity to make sure that this approach is successfully achieving widespread implementation
to ensure protection of coastal waters.
D. March 16. 1995 Flexibility Guidance:
A State choosing to rely on voluntary and incentive-based programs and existing, general back-up
authority should provide an explanation of how the State proposes to use the back-up authority, if
necessary, to achieve widespread implementation.
-------
Page 8
The State needs to establish measurable implementation goals, e.g., a schedule for meeting
increasing levels of management measure implementation, to be used as a basis for determining at
the end of three years whether this aspect of the program can be found approvable or whether
new, more specific authorities will need to be obtained within the five -year period.
The state's general authority must be capable of being used to control nonpoint source pollution,
and be inclusive (i.e., not contain significant exemptions or special conditions which.would render
it incapable of being used as a back-up authority for the specific sources or measures in question).
E. October 2. 1996 Draft Additional Information on Strategy Conditions
Identifies as a purpose of the strategy being to enable states and territories and
NOAA and EPA to agree on the level of progress that the state or territory
anticipates making during the first three years of program implementation.
Identifies three basic information needs:
1. What's the baseline from which progress will be evaluated?
2. Where will the state or territory be in three years, i.e,. what are the measurable goals for
assessing progress?
3. What's the plan, including potential use of the identified back-up authority, for improving
levels of implementation to demonstrate the ability of the state's/territory's approach to
achieve widespread implementation, i.e., to achieve the measurable goals identified in
question #2?
(p. 2): Emphasizes that the purpose of the strategy is to articulate how the state/territory will use
existing or proposed programs in combination with back-up authorities to achieve widespread
implementation and to establish a basis for NOAA and EPA to evaluate progress. The focus is on
a demonstration of ability (through measurable results) in order that the condition can be
removed.
Questions/Issues:
1. Does CSO view its proposal as different than what has already been provided for in the
March 1995 Flexibility Guidance?
2. The CSO proposal introduces the term "demonstrated history of implementation," which
establishes the basis for determining whether the combination of general authority coupled
with'voluntary programs can work. How does CSO envision defining the term
"demonstrated history of implementation?"
3. The CSO proposal also introduces the term "substantial compliance." How does CSO
envision evaluating "substantial compliance?" How does CSO envision providing for a
consistent means of evaluation while at the same time providing flexibility for state yccts&s ?
-------
Cardinal®
-------
Cardinal®
-------
Cardinal
-------
Cardinal
------- |