EPA Publication Number 202K09001
                           EPA Contract Number EP-W-08-042
         Learner Manual - Module 5
      Administrative System Components
TRIBAL, U.S. TERRITORIES AND
INSULAR AREAS ADMINISTRATIVE
AND FINANCIAL GUIDANCE
MANUAL FOR ASSISTANCE
AGREEMENTS
"A Nation is a stable, historically developed community of people
who share territory, economic life, distinctive culture, and language.
Office of Environmental Justice, U.S. EPA
U.S. Environmental Protection Agency
Updated August 2013

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                   Module 5: Administrative System Components
      This  manual  was  originally  developed  by  the  U.S.
      Environmental Protection Agency for  Tribal  Nations,
      but content also pertains to U.S. Territories and Insular
      Areas. Exception: U.S. Territories  and Insular Areas are
      treated as states under Part 31  (and also under  Part 35,
      Subpart A  for PPGs,  unlike  Tribes  that  are  covered
      under Subpart B).
                                   Contents
MODULE 5: ADMINISTRATIVE SYSTEM COMPONENTS.
  ADMINISTRATIVE SYSTEM COMPONENTS	3
    Personnel	3
    The Payroll Process	4
    Benefits	6
    Travel	11
  PROCUREMENT AND PURCHASING	14
    Price and Cost Analysis	19
    Property Management System	22
  COST SHARING, MATCHING, AND IN-KIND CONTRIBUTIONS	25
    Cost Share	25
    Match	25
    In-Kind Contributions	28
    Documentation	28
    Waivers	29
  PROGRAM INCOME	29
  RECORDS MANAGEMENT AND RETENTION	30
  ATTACHMENT TO MODULES	32
    Answers to Quizdom Actionpoint Questions	32
        EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
Page 2 of 35

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                        Module 5:  Administrative System Components
                        Module 5:  Administrative System Components
   Tribal, U.S. Territories and
   Insular Areas Administrative and
   Financial Guidance for
   Assistance Agreements
   Modules:
   Administrative .Si sii-m
   Components
                     Administrative System Components
                    What are some of the most important
                    administrative requirements to be addressed in
                    our written policies and procedures?
                    Personnel and payroll, along with financial policies
                    and procedures, need to be in place and in writing
                    in order to comply with the requirements of an
                    EPA award. Written personnel and payroll policies
                    and procedures can be used for good management
                    of a Tribal Nation as well as for EPA awards.
   Module 5: Administrative System Components
                                - Module i: The Grant
                                 Acplicaasn Process
                                • ModuleiAssistance
                                 Agreements
                                • :.i:
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                         Module 5: Administrative System Components
      Personnel working on the award or
      subaward(s)
      Qualifications for each position
      Duties and responsibilities
      Salary ranges
      Conflict of Interest Disclosure forms
      The Tribal Nation's Equal Employment
      Opportunity (EEO) policy*
      Annual performance appraisals
      Types and levels of fringe benefits
      Standards of conduct governing duties and
      responsibilities (also called "Codes of
      Conduct")
      Disciplinary actions for not adhering to the
      standards
*Though Tribal Nations may be exempt from many
aspects of the Equal Employment Opportunity
policy, they are required by federal law to follow
and enforce sexual harassment law.

For example:
        It is the Tribal Nation's
        policy to ensure Equal
        Employment Opportunity for
        all employees and applicants
        regardless of their race,
        color, religion, sex, age,
        national origin, and sexual
        orientation, mental or
        physical disability.
        Discrimination and sexual
        harassment policies are
        strictly enforced. In
        accordance with federal
        guidelines, the Tribal Nation
        maintains an affirmative
        employment and
        disadvantaged business
        enterprise outreach
        program.

Personnel regulations are explained in the OMB
Circular A-87, Sections Compensation for
personnel services provided in the Appendix. The
OMB Circular A-87 can be downloaded at
http://www.whitehouse.gov/omb/circulars/a087/a87_200
4.pdf.
       Reflection
       Pause a moment to consider your own
       situation.
           •  Do your personnel policies
              include all of the above
              information?
           •  Do your policies provide
              adequate separation of duties?
           •  What information do you need to
              add to your files?
           •  How can this additional
              information benefit your Tribal
              Nation?
   Payroll
             The Payroll Process
What requirements should be addressed in
payroll policies and procedures?
Most Tribal Nations have a centralized payroll
department. This is a good internal control and is
useful for a Tribal Nation in protecting its funds
from fraud, waste, and/or misappropriation.

The payroll department should have in place
written policies and procedures detailing:
    •   How employees get paid and how often
        they are paid
    •   The information needed on the time sheets
    •   When to turn time sheets in and to whom
    •   Supervisory review of timesheets
    •   Proper allocation of pay and benefits
    •   Pay grades
    •   Deductions
    •   W-4s and I-9s
    •   Fringe benefits
    •   Employer and employee paid benefits
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                     Page 4 of 35

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                         Module 5:  Administrative System Components
   Allocating Personnel Time
            Hours Worked and Documented on Timesheet
        100%
        40hrs


20%  5OK  30%    10%     9O%
Shrs  20hrs  12hrs   4hr5    36 h
         EPA        EPA   PPG   NSF    EPA    Tribal

    Semi-Annual Reporting      Timesheets        Timesheets
                                            :
No one project can be funded for more than 100
percent of personnel time. If a project is funded
by multiple sources, the total funding from all
sources cannot exceed 100 percent of the time
allocated in the grant budget.

The payroll department should also have
information regarding how the financial
information from the payroll system is  used in a
Tribal Nation's overall accounting system. When
there is no central payroll department, the same
rules apply for each program handling their own
payroll.

Grants must be charged actual hours worked. If pay
is based on budget hours, accounting must
reconcile the actual payroll expended with budget
hours predicted.

The Appendix contains the OMB Circular A-87,
Section 8.h regulations for payroll processing and
internal controls.
Reflection
Consider your own situation again.
 •   Does your organization have written
     payroll policies and procedures?
        •   How does your payroll
            process protect project
            funds?
 •   Are salaries and wage rates
     established, authorized, and
     approved in your organization to
     ensure equity?
 •   Does your payroll process ensure
     that all deductions from employee's
     salaries are:
        •   Authorized by the employee?
        •   Properly applied?
 •   How are payrolls distributed?
        •   If checks are distributed
            manually, are there sufficient
            controls to ensure that
            payroll checks are distributed
            to the correct employee?
 •   How might your system be
     improved?
                                        Sample Timesheet
   Which of the following is the most important
   requirement of an EPA payroll processing
   system?

    A. Pay grades
    B. Timesheets
    C. Internal controls
    D. How employees are paid
    E. Ml of the above
                                                       How should time sheets be prepared?
                                                       Time sheets for staff are required when and if
                                                       employees are charging their time and effort to
                                                       more than one funding source. An employee
                                                       charging time to a single funding source only
                                                       requires a signed certification prepared at least
                                                       semi-annually.
                                                       Each employee's time sheet must show:
                                                           •   Employee name
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                                                          Page 5 of 35

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                         Module 5:  Administrative System Components
    •   Department/ department charge code
    •   Hours worked on the project(s), by date
    •   Tasks performed

If an employee works on more than one project
during the pay period, list the actual hours
worked on each project (not estimated or
allocated hours). Do not fill out timesheets in
advance of hours worked, even if you work the
same hours each week. The payroll department
should have "charge codes" that are issued to the
departmental managers to ensure proper charging.
The procedures should include where the
manager/time keeper submits approved time sheets
for payroll processing.
     Grant recipients may use their own time
        sheets. The following is a model.
      Grantees without their own forms are
         encouraged to adopt this form.
       Learner Notes

       Activity 5.a (found at www.petetribal.org')
       asks you to examine the sample timesheet
       on the previous page. Sick leave is paid
       out of fringe benefits accrued. (See the
       bottom left-hand corner. 1
Appendix document OMB Circular A-87, Section
8.h contains the regulations for time reporting.
   Which of the following does not need to be
   included on personnel time sheets?

    A.  Employee's name
    B.  Employee's social security number
    C.  Hours worked and on which project
    D.  Department/project budget codes
    E.  Department for which the employee works
   Personnel time sheets track work by the:


    A. Employee's social security number
    B. Hours worked and on which project
    C. Inventor}" codes and dates
    D, Project name and task responsibilities
    E. A]] of the above
   Fringe Benefits

   • Fringe benefits are services,
     privileges, or compensation
     to employees in addition to
     salary, such as:

     = Social security contributions
      (pederii !nsi£znceCQnEibuooQ5."£t- PICA)

     E Worker's compensation

     ^ Retirement plans

     = Insurance
                   Benefits
What are fringe benefits?
Fringe benefits are services, privileges, or
compensation to employees in addition to salary,
such as:
    •   Social security contributions (Federal
        Insurance Contributions Act (PICA) tax)
    •   Worker's compensation
    •   Retirement plans
    •   Insurance
    •   And perks, like membership dues to a
        health club or professional organization.

All fringe benefits are charged to the grant as a
single line item.
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                      Page 6 of 35

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                                              Module 5: Administrative System Components
Table 1: Sample Timesheet
Example Tribe Environmental Protection Program

Employee: Jane Doe
I.D. No.: 9876
Department: Grants Management
Primary Program: EPA Grant and Loan Projects
Program/Activity
106WQ
Air Pollution
GAP
Pesticides
Non-federal activity 1
Non-federal activity 2
Indirect activity
Total Regular
Annual
Sick
Comp
Holiday
Admin
School Act.
LWOP
Sun
11/9







0








Begin Balance
Hours Earned
Hours Available
Hours Used
Ending Balance
Mon
11/10
5



3


8








Tue
11/11
8






8








Annual
120
80
80
0
80
76



Wed
11/12
8






8







Thu
11/13
6
2





8








Sick
80
4
84
8
0
Comp
0
0
0
0
Supervisor

Fri
11/14
8






8







Sat
11/15







0










Pay Period:
Beginning Date:
Ending Date:
Sun
11/16







0







Mon
11/17







0

8





Tue
11/18
5



3


8









11/09/11
11/22/11
Wed
11/19

8





8







certify that the time distribution presented above is a true and accurate accounting of
fate "Doe
Employee
fae 'pew
Thu
11/20

8





8







Fri
11/21
8






8







Sat
11/22







0







(input beginning date)
Total
Hours
48
18
0
0
6
0
0
72
0
8
0
0
0
0
0
Payroll
Allocation %
67%
25%
0%
0%
8%
0%
0%
100%
These hours are allocated
based on allocation of regular
hours.
activities/programs I worked during the pay period.
11/23/2011
Date
11/24/2011
Date
Last Updated April 2013
                               EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Page 7 of 35

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                         Module 5: Administrative System Components
According to the OMB Circular A-87, Section 8(d):

      d. Fringe benefits.

      (1) Fringe benefits 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 leave, 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 basis 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 Principles (GAAP) exists when the leave is
      earned.  When a governmental unit uses the accrual basis of accounting, in accordance
      with GAAP, allowable leave costs are the lesser of the amount accrued or funded.

      (5) The cost of fringe benefits in the form of employer contributions or expenses for social
      security; employee life, health, unemployment, and worker's compensation 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 and other
      activities.
          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013                                                                           Page 8 of 35

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                         Module 5:  Administrative System Components
   Vacation and Sick Leave Policy


    • Personnel vu>rkinjji un n fedeuil assislanee
     agreement project cunnol be the < >nl\ perse mnel
     within the Tribal Naliun recemii}; leave benefits.
     ' If EPA project personnel j;el leu\e Itenefits,
     e So must evenime else on the payroll.
What's included in vacation and sick leave
policies and procedures?
Vacation and sick leave are considered to be part of
employee benefits. Written procedures should
contain sufficient detail, such as:
  •   Valid categories of leave time
  •   Time sheet codes for charging various
      categories of leave
  •   How leave is authorized
  •   The  amount each person receives
  •   How the leave is earned
  •   How leave is charged
  •   How leave is allocated to programs and
      projects
Policies and procedures must ensure fair and
equitable charges when more than one funding
source is involved. The area of leave is a very
personal item. The proper handling of leave is
important and helps maintain morale within an
organization.
If vacation and sick leave are fringe benefits
offered to employees working on assistance
agreements, everyone working for the Tribal
Nation must receive vacation and sick leave.
Personnel working on a federal assistance
agreement project cannot be the only personnel
within the Tribal Nation receiving leave benefits.
A policy might read:
    The Tribal Nation offers all employees
    the opportunity to earn paid vacation
    and leave time. Vacation and leave are
    accrued at the rate of one day for each
    month worked. Paid leave covers
    vacation, illness, personal  and family
    necessity. The maximum number of
    days earned per year is 12.
    Leave may be carried over to the
    following year, but an employee may
    not accumulate more than 90 days.
    Sick leave lasting more than five days
    requires a doctor's note explaining
    the illness and any actions taken.
    Vacation must be requested in
    writing at least one week before the
    scheduled leave. Leave is not
    approved until the request is signed
    and returned to the employee.
    Accumulated leave will be paid when
    an employee quits the job but not if
    the employee is fired.

The Appendix contains OMB Circular A-87, which
explains fringe benefit regulations.
   A grantee can provide leave for personnel working on a
   federal assistance agreement project even if other
   employees do not get leave.
    A. True
    B. False
    (". It depends on the "terms and conditions" of
      the award
    D. It depends on the type of award granted
    E. Yes, when so stated in the Tribal Nation's
      payroll policy.
   Overtime Compensation

    • Overtime rates should be:
     - Written in the polio) and procedures handbook
     <- 1 Mailed so t ha I n< > abuse < >mirs a ml sufficient
      funds ure available
    • Compensation of time may be granted when
     funds are not available - "comp time"


How should we handle overtime hours?
Policies and procedures for  overtime
compensation, along with overtime rates, should be
spelled out in sufficient detail so as to protect a
Tribal Nation's resources. The use of overtime
should have sufficient controls in place to
reasonably ensure that overtime is not abused and
there are sufficient funds to  complete the tasks and
projects.
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                      Page 9 of 35

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                        Module 5: Administrative System Components
For example:

      /t ;'s the policy of this Tribal
      Nation to reduce to a minimum
      the necessity for overtime work.
      All overtime must be approved in
      writing in advance by the
      immediate supervisor and the
      General Manager. If a supervisor
      assigns an employee overtime,
      the employee must work the
      additional time.

      Overtime compensation shall be
      paid to non-exempt employees
      when they work in excess of an
      eight hour day or a forty hour
      work week at one and one half
      times the employee's normal
      rate of pay. Non-exempt
      employees required to work on a
      scheduled holiday will be paid
      double their regular rate of pay
      for any hours worked. Paid time
      off for holidays, jury duty,
      vacation, sick leave or any leave
      of absence will not be credited as
      a regular work day for
      computation of weekly overtime.

      All employees classified as
      exempt from overtime
      compensation understate and
      federal law shall not be eligible
      to receive overtime
      compensation, unless prescribed
      by law. Exempt status will be
      indicated in all appropriate
      position descriptions, and
      employees will be notified of
      their status when hired or upon a
      change in status as approved by
      the General Manager and the
      Council.

What about employees who give more than
100%?
Compensatory time is a method of paying people
for working above and beyond their regular work
duties when there may not be any funds to pay for
overtime. The procedures for giving "comp" time
should be handled in the same manner as overtime.
Written procedures should detail:
  •   Who is eligible
  •   How compensatory time is earned and
      tracked
  •   How compensatory time is used (usually
      through time off for extra time worked)

Plan ahead. Do not wait until you find you need a
policy. Make it part of the Tribal Nation's regular
payroll process. For example:

        Wo employee is entitled to
        take "comp time" for hours
        worked outside of his or her
        regularly scheduled work
        day or work week.

        Non-exempt employees shall
        accrue overtime
        compensation pursuant to
        Article II, sections 2, and
        Article IV, section 7. An
        adjusted work schedule can
        be arranged upon mutual
        agreement of the employee
        and the supervisor where for
        one particular day, the hours
        are changed to meet certain
        situations.

        Exempt employees shall not
        accrue overtime or
        compensatory time.

Table 2: Sample Compensation Policy
Non-Exempt Exempt Employee
Employee
Pay Rate

Overtime
Compensation
Policy
Sample
Compensation



Schedule 40 hours
per week
Salary $480 per week

Overtime Overtime compensated
compensated at
time and a half
45 hours
40 x $10 per hour =
$400
5x$15= $75
$400 + $75 =$475
as arranged with
supervisor
45 hours
$480
Plus 2-hour leave on
Friday of the following
week
The cost principles for wages, salary, and fringe
benefits are in the OMB Circular A-87, Section 8
(Compensation for personal services). A copy is
provided in the Appendix.
          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                    Page 10 of 35

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                         Module 5: Administrative System Components
                                Expenses musl he
                                in the budget and
                                reasonably priced.
                    Travel
What requirements should be addressed in travel
policies and procedures?
Travel is a vulnerable area for most Tribal Nations.
A Tribal Nation needs to have travel policies and
procedures in place that treat all employees in the
same manner. This means employees working on
EPA award project(s) will follow the same travel
procedures as individuals working on non-federally
funded project(s).

Travel expenses must be budgeted in the
assistance agreement and approved in the
award document before they can be covered.
Expenses must be in the budget and reasonably
priced.
              Plan ahead!
Travel to conferences may be allowed under a
Tribal Nation's travel policy but may not be
allocated to an EPA award because there is no plan
for conference travel in the work plan or the
budget.

Equipment and travel budgets are subject to
statutory law and therefore must be preapproved
with the Project Officer. If equipment or travel is
not in the budget, then its cost will not be
reimbursed.
            o   A list of allowable costs that can
                be reimbursed by the Tribal
                Nation
            o   A list of required receipts
        Explanation of how employees learn
        which reimbursement requests are
        allowed and which are not
            o   Explanation of how employees
                learn which costs are allocable to
                an assistance agreement (a cost
                may be allowed under a Tribal
                Nation's travel policy, but not
                reimbursed under a specific EPA
                award)
   Travel Costs
             Ifyuu du iiu L luivi* a millfii lnivi*l jjulR'y*
         v llir Gmtrrul Services AduiiiiisUMilKm (GSA) su
What if we don't have a written policy related to
travel costs?
The Tribal Nation must establish its own travel
policies. If a Tribal Nation does not have a written
travel policy related to travel costs, they may use
the GSA allowable cost rates and amounts
established by the General Services Administration
(GSA) as guidance for developing policies. View
the travel cost guidelines and scan other offerings
on the GSA website, http://www.gsa.gov/.

Travel authorizations, vouchering after the trip, and
trip reporting are explained in OMB Circular A-87,
Section 43, which is provided in the Appendix.
Example forms are provided in Module 8.
Travel policies provide a detailed written
procedure for travel approval and expense
reimbursement including:
    •   Travel authorization and approval of trips
        prior to taking them
    •   Travel vouchers detailing the costs of
        various travel-related expenses when
        requesting reimbursement
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last Updated April 2013
                                     Page 11 of 35

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                         Module 5: Administrative System Components
Table 3: Sample Travel Authorization Form
Travel Authorization
Department: Grants Office Authorization No. 9876543
Name: Jane Doe Title: Project Manager
Date: 09'15/08
You are authorized to travel as indicated below and to incur necessary expenses in accordance with Tribal Rules and Regulations.
Places of Travel
From: Somewhere, ST
Purpose:
Hotel Rate:
Per Diem Allowance:
Period of Travel:
To: Washington, DC
Initial meeting EPA grant
Maximum $300.00 per day
$60.00 per day ($15 breakfast, $15 lunch, $30 dinner)
Beginning 10/01/08
Ending .0/02/08
Mode of Travel
Common carrier D Extra fare D Tribal-owned Vehicle D
Privately owned Vehicle 0 At mileage rate: $0.52 per mile*
Estimated Costs
/ hereby certify that travel is advantageous to the Nation.
Transportation:
Per Diem:
Miscellaneous:
Hotel Rate:
TOTAL
$119.60
$75.00
$15.00
$300.00
S629.20
Charged to account #: 0000 123
Private car
(approximately 230 miles)
Meals
Internet Services
's stay


Signatures:
Jane Doe
Requester 's Signature
Title
James Stone
Authorizing Officer 's Signature
John Fern
Fiscal Officer 's Signature
Table 4: Sample Travel Voucher
Staple
Receipts
Here
DATE
10/01/08
10/02/08

NAME
ADDRE
SS
TRAVEL EXPENSE CLAIM CITY
SS#/or
VN#
DESTINATION
From: To:
Somewhere,
ST
Washington,
DC

Washington,
DC
Somewhere, ST

TRIP
PURPOSE
Initial Meeting
EPA grant


MILEAGE
Miles
CHARGE
Amount*
$ per mile $0.52
117
117

$60.84
$60.84

IV
Breakiast
0.00
15.00

:EALS
Lunch
15.00
15.00

Dinner
30.00


HOTEL
200.00


Jane Doe
1234 Rural Route 2
Somewhere, ST 12345
SS2938475

MISC.
Explain
Internet


EXPENSE
Amount
15.00

TOTAL
TOTAL
$320.84
$90.84
$411.68
I hereby certify that the above expenses were
incurred and the amounts are correct and should
be paid from the appropriate fund. BUDGET CODE IN-STATE
BUDGET CODE OUT-OF-STATE
SIGNATURE Jane Doe
Claims must be submitted within 90 days of trip and all
claims for the current fiscal year should be submitted
in time to be paid in that fiscal year. APPROVED BY James Fern


01-00-0000123**
DATE 10/05/08
DATE 10/06/08


                      ...Travel forms are described in greater detail in Module 8...
           EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
Last U pdated April 2013                                                                           Page 12 of 35

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                         Module 5: Administrative System Components
Travel policy example:
        A Travel Authorization (TA)form must be filled out by all individuals traveling with Tribal
        Nation's funds to receive payment for travel and per diem. Airline reservations will be
        made at the lowest possible fare. Receipts are required for all reimbursable expenditures.

        Per Diem is paid by the full and half day and is intended to cover lodging and meals while
        on official business for the Tribal Nation. Per Diem amounts are based on federal per diem
        rates for federal and non-state programs and state rates for state programs. Any expenses
        incurred without prior approval may not be reimbursed; it is solely at the discretion of the
        General Manager. Expenses other than lodging and meals may be reimbursed as allowed
        under federal and state per diem regulations. Such expenses include lodging taxes, taxi,
        and parking costs, official phone charges, and laundry. A trip report should be required
        reflecting all reimbursable expenses.

        Travel advances and per diem payments will be made promptly to employees engaged in
        official business. Air travel will be arranged by and purchased directly through the Tribal
        Nation's designated agent. All employees will be required to fill out a Travel Authorization
        form which must be approved and signed by the traveler's immediate supervisor and the
        General Manager. 10% of travel advances will be withheld pending the completion of a
        Trip Report which shall be completed with 10 days of traveling  on official business. To be
        entitled to compensation for travel costs, employees must also adhere to the following
        policies and procedures:

        a) Attend all trainings, workshops or other official business for  which travel costs and per
        diem has been provided.

        b) Employees  traveling on trips that begin and end on the same day will be entitled to one
        half the normal per diem rate regardless of the time spent or place traveled to during the
        day.

        c) Any employee that attends to official business under the influence of drugs or alcohol
        will forfeit their per diem for that day. If an employee misses the majority of any business
        for which she  or he has been authorized to travel for, the employee may be required to
        repay all costs associated with the travel and may be subject to further disciplinary action
        as provided under these policies. Repayment decisions shall be  made by the Council upon
        recommendation of the General Manager.

        d) Any employee that develops a pattern of violating subsection (c) above will be
        prohibited from traveling for the Tribal Nation for a period of time to be determined by the
        Council and may be required to pay back per diem and travel costs for any trip where
        documented abuses have occurred.
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                         Module 5: Administrative System Components
       Procurement and purchasing are
      explained more fully in Module 8.
      Reflection
      Take a few minutes to consider your
      assistance agreement award's budget.
         •    Does it authorize travel?
         •    Does your organization have
             written travel policies and
             procedures?
         •    Are internal controls in place to
             ensure that employees follow the
             Nation's travel policy?
             o   Are there levels of review prior
                 to authorizing payment?
             o   How do you ensure that the
                 travel was associated with the
                 specific grant project?
             o   Are internal controls in place to
                 ensure that travel and time
                 reporting support the
                 employee's activities while on
                 travel?
             o   Who determines that the travel
                 is necessary?
             o   How does your organization
                 ensure time sheets completed
                 during travel are accurate (e.g.,
                 comparison with itinerary filed
                 before travel, receipts, meeting
                 agendas)?
                                                           Reimbursement of travel expenses for personnel
                                                           working on federal awards are handled the same as
                                                           those for other employees of the Tribal Nation.

                                                           A. True
                                                           B. False
                                                           C. II depends on Lhe "terms and conditions" of
                                                              the award
                                                           D. It depends on the type of award granted
                                                           E. Only when so stated in the Tribal Nation's
                                                              travel policy
   The Tribal Nation's travel policies must comply with the
   U.S. General Services Administration's (GSAI allowable
   costs.
    A.  True
    B.  False
    C.  It depends on the "terms and conditions" of
       the award
    D.  It depends on the t}y>e of award granted
    E.  Only when costs are not addressed by the
       Tribal Nation's policies
   Procurement and Purchasing
    • When awarding subgrants, conlruuis, or
     subcontracts, Indian Tribe or Indian Intertribal
     Consortium are required , to Lhe extent feasible,
     to give preference to Indian organizations and to
     Indian-owned economic enterprises.
    • ttuiclunce is provided in the document entitled
     Purchasing Supplies, Equipment, and Services
     Under EPA Uranis i<> Local Government,

      Procurement and Purchasing
What needs to be in our procurement and
purchasing policies and procedures?
There are many requirements for procuring or
purchasing goods and services under assistance
agreements. According to the Indian Self
Determination Act (40 CFR Part 31.38), to the
extent feasible, a Tribe must give preference to
Indian organizations and Indian-owned economic
enterprises when awarding subgrants and
subcontracts. The Tribe must also require, to the
extent feasible, that preferences and opportunities
for training and employment in connection with the
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                         Module 5: Administrative System Components
administration of tribal contracts or grants be given
to Indians.

For example:

        It is the policy of the Tribal
        Nation to purchase only
        those goods and services
        that are needed and
        necessary to support
        approved business
        operations and programs
        and which are considered
        necessary and allowable
        under all grants and
        contracts which the Tribal
        Nation may administer. It is
        also the policy of the Tribal
        Nation to maximize program
        and service delivery by
        purchasing goods and
        services at the lowest
        possible cost and whenever
        possible from Indian-owned
        businesses.

To help Tribal Nations obtain the best products,
goods, or services at the most economical price,
EPA has developed extensive guidance.
Purchasing Supplies, Equipment, and Services
Under EPA Grants to Local Government is
provided in the Appendix.

Procurement standards are explained for:
    •   Supplies, equipment, and services
    •   Contracting and subcontracting
    •   Competition
    •   Cost and price review
    •   Purchasing methods
    •   Reviews  and audits

The following procurement regulations are also
provided in the Appendix.
    •   40 CFR 31.36 contains procurement
        standards for contracts and subawards.
    •   40 CFR 31.32 contains the requirements
        for equipment purchase, use, and
        disposition.
    •   40 CFR 31.33 contains the requirements
        for purchase of supplies, title, and
        disposition.
   American Recovery and Reinvestment Act
The American Recovery and Reinvestment Act
requires recipients of federal funding to report use
of funds to the federal government beginning July
15, 2009. This includes all subawards, subgrants,
contracts, and subcontracts. For details visit
Recovery.gov at http://www.recoverv. gov/.
       Learner Notes

       This is a great time to clarify the
       differences between easily confused terms.
       Take a few minutes to do Activity 5.b
       (online  at www.petetribal.org). Work
       together first, then check the Glossary in
       your Appendix to see how well you did.
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                          Module 5: Administrative System Components
   Subawards and Subcontracts
       Costs to do the work      Payments made to someone
                              else to do the work
           Contract

          Subcontract
Subaward

Subgrant
     The grant recipient controls    The other party controls the
   when, where, and how the work   decision-making process.
          is completed.
         Remember compliance requirements under FFATA!
What is the difference between subawards and
subcontracts?
Federal grants are assistance awards. Procurements
or acquisitions require contracts.
  •   A subaward is a subgrant, not a subcontract.
  •   A subcontract is entered into between a
      contractor and a subcontractor.
A grant recipient can enter into a contract using
grant funds. This is procurement under a grant, not
a subcontract.
   Subawards and Subcontracts
       Steps
      Received by
         Remember compliance requirements under FFATA!
How do subawards and subcontracts work?
Subawards and contracts are made by the grantee
to an eligible:
  •   Subgrantee (subaward recipient or
      subrecipient)
  •   Subrecipient (e.g., prime contractor,
      consultant)
  •   Lower tier subrecipient by a primary
      subrecipient

Subcontracts are made by a prime contractor to
other organizations.

Subawards to eligible subgrantees and recipients
are awards of financial assistance in the form of:
  •   Money
                         •   Property in lieu of money
                         •   Contractual legal agreements that do not
                             include procurement of goods and services
                       Procurement (contract) and subgrant regulations
                       can be found in 40 CFR 31.36 in the Appendix.
                                Remember compliance requirements under FFATA!
                       What are the requirements for subcontracts?
                       Subcontracts are awarded in accordance with your
                       Prime Contractor's contracting policy. Like any
                       governmental unit, Tribal Nations have many
                       needs that are accomplished by contractors which
                       in turn may use subcontractors.

                       Subcontracting is one form of procurement with
                       special requirements. It is the grant recipient's
                       responsibility to ensure the Prime Contractor is
                       aware of the "terms and conditions" specific to the
                       award under which subcontracts are made.

                       The grantee, subgrantee, and prime contractor
                       policies  must address:
                         •  A written code of conduct that includes
                            conflict of interest disclosure statements and
                            disciplinary  actions
                         •  Competing transactions in a free and open
                            manner
                               o   A review to avoid unnecessary
                                   purchases
                               o   A review of lease versus purchase
                                   alternatives (when appropriate)
                         •  Conducting  solicitations with a clear scope
                            of work and bidder requirements
                         •  Conservation of  natural resources
                         •  Utilization of  disadvantaged business
                            enterprises (whenever possible)
                       Both the grantee and prime contractor's contracting
                       policies  must also address:
                         •  Performing and documenting cost and price
                            analyses for competitive bidding and small
                            purchase procurement actions
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                         Module 5: Administrative System Components
  •   Documenting the basis for all procurement
      selections, justifying a lack of competition
      and basis for award costs
  •   Pre-award review of the procurement when
      the award or contract modification exceeds
      $100,000, is not competed, or only one bid
      is received
  •   Purchase/agreement/contract cost thresholds
      for small purchases versus major
      procurements and personnel required to
      approve procurements
  •   Provisions that no contract or subaward will
      be entered into with parties that are
      debarred, suspended, or excluded from
      federal assistance programs

Below is an example to help you develop your own
policies:

        All contracts or agreements for
        less than $5,000 and which
        have been included in an
        approved budget line item
        may be executed by the
        General Manager. Contracts
        which exceed $5,000 shall be
        executed by the President.

        Required Information:
             Business payment: All
             payments to a company
             or business shall require
             the following information
             to be recorded on the
             check request prior to
             payment being made:
                  (1) company or
                  business name;
                  (2) copy of business
                  license;
                  (3) tax ID number;
                  and
                  (4) mailing address
                  and phone number.
             Individual Payment:  All
             payments to individuals
             shall require the
            following information to
             be recorded on the check
             request prior to payment
             being made:
                  (1) individuals
                  name;
               (2) Social Security
               number; and
               (3) mailing address
               and phone number
               (if available).

     Other Information: All check
     requests shall also include a
     description and number of the
     item(s) being purchased; the
     date of the request and the
     due date for requested
     payment; the dollar amount of
     the purchase and the program
     and account coding to which
     the payment is to be charged.
     All vendors, subcontractors,
     contractors,  consultants,
     students, general assistance
     recipients, Council members
     and any others receiving
     payments should fill out a W-9
     form which should be held on
     file by the Accounting
     Department.
   Learner Notes
   Typically over $100,000 paid to a single
   supplier is "sole source procurement" and
   must be justified in writing. The EPA
   Project Officer is notified when any sole
   source procurements are made. With that
   much money, it is hard to justify using a
   single source.
Consultants
Purchasing policy must address consulting
agreements and specify:
  - Services to be provided
  ° Engagement duration
  - Reporting requirements
    • Including information for FFATA compliance
  ° Work location
  ° Pay rates, including:
    • Base rate
    • Fringe benefits
    • Overhead
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                         Module 5: Administrative System Components
What are policy requirements for consultants?
Purchasing policy must address consulting
agreements and specify:
    •   Services to be provided
    •   Engagement duration
    •   Reporting requirements
    •   Work location
    •   Pay rates, including:
          o   Base rate
          o   Fringe benefits
          o   Overhead

For example:

      Consultants may be used to
      provide specialized and expert
      services beyond the scope of
      available staff resources when it
      becomes apparent that their
      expertise is essential to the well-
      being of the organization. When
      obtaining the services of
      consultants the purchasing
      provisions provided below shall
      generally be followed. The
      consultant's fee must be
      appropriate considering the
      qualifications of the consultant,
      the consultant's normal fees, and
      the nature of the services
      rendered by the consultant. Cost
      is not the deciding factor, but
      rather one of several, such as
      quality, timeliness, location,
      previous experience, etc.

Regulations for consultant agreements are provided
in 40 CFR 31.36(j) in the Appendix.
If consultants are budgeted for in the award
agreement, the "terms  and conditions" will include
a compensation rate for the current fiscal year. For
example:

        Payment to consultants.  EPA
        participation  in the salary rate
        (excluding overhead) paid to
        individual consultants retained
        by recipients  or by a  recipient's
        contractors or subcontractors
        shall be limited to the maximum
        daily rate for  a Level  IV of the
        Executive Schedule (formerly GS-
        18), to be adjusted annually. This
        limit applies to consultation
        services of designated
        individuals with specialized skills
        who are paid at a daily or hourly
        rate. As of January 1, 2009, the
        limit is $587.20 per day and
        $73.40 per hour. This rate does
        not include transportation and
        subsistence costs for travel
        performed (the recipient will pay
        these in accordance with their
        normal travel reimbursement
        practices).

        Subagreements with firms for
        services which are  awarded
        using the procurement
        requirements in 40 CFR 30 or 31,
        as applicable, are not affected by
        this limitation unless the terms
        of the contract provide the
        recipient with responsibility for
        the selection, direction, and
        control of the individuals who
        will be providing services under
        the contract at an hourly or daily
        rate of compensation. See 40
        CFR31.36(j)or30.27(b).

Consultants should be competed. EPA prefers grant
recipients obtain bids from a number of
consultants. Competition is encouraged to provide
opportunity to all available consultants and ensure
costs are reasonable.

Consultants should provide bids at an "unloaded
rate". This rate does not include fringe benefits or
overhead, such as travel, temporary lodging, and
food. Consultants can be expensive. Do not go
over the amount listed in the budget. Consultants
should be paid hourly and cannot invoice at a
loaded rate. They must be responsible for their own
fringe benefits and overhead costs.
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                        Module 5: Administrative System Components
   Questions?
        Contact your EPA
        Grants Specialist.
If there are any further questions, contact your
regional EPA Grants Specialist.
   Disadvantaged Business Enterprises
    On.mt.ees must comply with Lhe Disadvantage*!
    Business Enterprise rule to use disadvantaged
    business enterprises when making procurements
    under grants and EPA financial assistance
    agreements performed entirely within Lhe I Inked
    States, whether the work is performed hy a
    reeipient < «• iLs prime e< mtractt>r, for e
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                          Module 5: Administrative System Components
   Cost Analysis

    Evaluation of each major cost category
        Reasonableness,
      °  AllocabiHty, and
      °  Allowjbility
    of each category and of the total cost
    of a contract or change order.
How important is it to analyze costs before
purchasing goods and services?
A cost analysis is the evaluation of each major cost
category to determine the reasonableness of each
category and of the total cost of a contract or
change order.

Tribal Nations need to perform a cost analysis, if:
  •   The statement of work requires contractors
      to specify the elements of their proposed
      total contract cost.
  •   Competition is lacking, for:
        Sole source procurements
        Contract modifications
        Change orders

Procurement methods are explained in 40 CFR
31.36(d), provided in the Appendix.
   Cost Analysis
           5950   525,000  Sfc5.0JO $562,987 S20.000  $136.732  5838,169

          S1.J50   }n,300  S78.000 S9WJS8 Sii.'W  $2(7.652 S1.MU1Q
           S79S   521.432  55? 000 5398X00 S2J.125  S293,89t>  S?(BJ42
       Reflection
       Pause a minute to consider your own
       situation.
         •   Does your organization have
             written procurement policies and
             procedures?
         •   Has your organization awarded
             contracts or subagreements under
             any of your current award
             agreements?
               o   Were contracts awarded in
                   accordance with your
                   organization's contracting
                   policy?
               o   Does your organization have
                   guidelines for documenting
                   its contract files?
               o   Do any of your
                   organization's contracts for
                   grant projects exceed the
                   federal small purchases
                   threshold of $100,000?
         •   If so, did EPA request to review the
             contract prior to the time that you
             awarded the contract?
         •   Has your organization established
             an affirmative procurement system
             for recycled materials and
             compliance with environmental
             statutes?
         •   Are internal controls in place to
             ensure that your organization does
             not charge EPA assistance
             agreements more than the
             authorized amount?
         •   Has your organization awarded
             contracts to consultants under
             current assistance agreements?
A cost analysis is the review and evaluation of
each element of cost to determine
reasonableness, allocability, and allowability.
Cost analysis is particularly important for sole
source procurements (when there is only one
reasonable source for the items needed). Sole
source analysis also requires justification as to why
the proposed contractor is the only one able to
perform the work due to qualifications and
experience. Your EPA Project Officer can write
you a justification.
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                          Module 5:  Administrative System Components
What is sole source procurement?
 40 CFR 31.36(d)(4) explains sole source
procurement as follows:

(4) Procurement by noncompetitive
proposals is procurement through
solicitation of a proposal from only
one source,  or after solicitation of a
number of sources, competition is
determined inadequate.

  (i) Procurement by noncompetitive
  proposals may be used only when
  the award of a contract is
  infeasible under small purchase
  procedures, sealed bids or
  competitive proposals  and one of
  the following circumstances
  applies:

    (A) The item is available only
    from a single source;

    (B) The public exigency or
    emergency for the requirement
    will not permit a delay resulting
    from competitive solicitation;

    (C) The awarding agency
    authorizes noncompetitive
    proposals; or

    (D) After solicitation of a number
    of sources, competition is
    determined inadequate.

  (ii) Cost analysis, i.e., verifying the
  proposed cost data, the projections
  of the data, and the evaluation of
  the specific elements of costs and
  profits, is required.

  (Hi) Grantees and subgrantees may
  be required to submit the proposed
  procurement to the awarding
  agency for pre-award review in
  accordance with paragraph (g) of
  this section.
   Compare Cost Data
   Travel
   Subcontracting
   Consultants
   Indirect
   TOTAL
5652.987
MU.19S
  S6573
S2C6.732
  $950
   MA
   $1,068.558
 Included above
     $9768
    $271,402
     51.250
	NA
$176.432
$ 119 1OS
$10.579
$223.110
  $795
SiSO.OM
                   $1.119.437
                              51.250.98?
              Hired S.T.&P. Though Victors is less expensive
              and uses high quality materials, they tend to
              tack on fees later in the project and don't pay
              their employees enough to keep good workers
              on the job throughout an entire project.
What data do we collect and analyze?
To obtain the information, a Tribal Nation needs to
conduct a cost analysis and must instruct
contractors to provide cost data with their bid
proposals.

Data to be specified might include:

    •   Personnel
    •   Fringe benefits
    •   Travel
    •   Subcontracting
    •   Indirect costs
    •   Profit
EPA does not prescribe a form for this cost data, so
unless you have a standard form, contractors may
submit their cost data in any format. Tribal Nations
should require bidders to certify that the cost
information they submit is complete, current, and
accurate.

Cost and price analysis are explained in 40 CFR
31.36(f), which is provided in the Appendix.
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                         Module 5:  Administrative System Components
      Reflection
      Consider the following questions as they
      pertain to your Tribal Nation's policies
      and procedures.
        •    Do your purchasing policies and
             procedures require performing and
             documenting an analysis for sole
             source procurements based on cost,
             experience, and qualifications?
        •    Does your policy use a pre-qualified
             list of persons, firms, or products to
             acquire goods and services?
        •    If so, does it follow federal
             procurement policies to place and
             update vendors on your list?
        •    Does your organization have
             internal controls to ensure that
             goods and services are:
                o   Acquired in quantities
                    needed?
                o   Required for execution of
                    the project?
                o   Paid for by the
                    accounting/finance
                    department?
   Price analysis is the comparison of:

   A. Contractor relationship
   B. Vendor proximity
   0. Market price
   D. Free shipping
   E. All of the above
   Cost analysis requires which kinds of data:


   A, Totals per cost category
   B. Contractor relationship
   C. Vendor location
   D. Free shipping
   E. All of the above
                                             is:
   Property Management System
    • A written policy is required to comply \\ilh
     regulations on:
     '  Equipment—tangible, non-expendable, personal
       properly having a useful life greater lhan one year
       andun acquisition cost of $5,000 or more per
       unit
     r  How equipment was acquired.
     =  Disposition of equipment after the award period
       ends or at the end of the equipment's life.

        Property Management System
Why do we need o property management
system?
At a minimum, a grantee needs to have policies
and procedures to identify and control acquired
property. This is especially critical when property
is acquired under an award, whether it is  part of
non-federal contributions or purchased with federal
funds. A Tribal Nation needs to be familiar with
federal requirements for property management, and
must address them in the Nation's written policy.

      The Tribal Nation keeps an
      inventory list of equipment with a
      value of $5,000 or more or a useful
      life of one year  or more. The
      information includes the item, date
      of purchase, value, and funds used.
      It is updated every time a new item
      is purchased. When equipment is
      disposed of, the date is noted on
      the list and this information may
      be given to the  auditors so they
      can update their depreciation or
      use schedule (if any).

What are the regulations on equipment?
Equipment  is tangible, non-expendable,  personal
property having a useful life  greater than one year
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                         Module 5: Administrative System Components
and an acquisition cost of $5,000 or more per unit.
The Tribal Nation's definition of capital equipment
may be different than the federal definition,
provided that the Nation's definition would at least
include all equipment as defined above. The Tribal
Nation's definition of capital should be used if it is
lower than the federal guideline. For instance, a
policy would be acceptable if it identifies capital
equipment as property with a useful life greater
than one year and an acquisition cost of $3,500 or
more per unit.

Supplies are tangible, expendable, personal
property that costs less than $5,000 per unit,
including paper, ink, pens, paper clips, and other
expendable products.  Supplies are items that can be
easily lost or borrowed, "pilferable" objects. They
are easy to lose track of and can be stolen more
easily than equipment. Computers are supplies
not equipment. Computers generally cost less than
$5,000 per unit. Laptops can be misplaced and
appropriated without malicious intent.
Who gets the equipment after the award period
ends?
EPA regulations as explained in 40 CFR 31.32,
govern the disposition of equipment acquired under
a grant or subgrant. (See the Appendix for 40 CFR
31.32). Property and equipment that are donated
and/or acquired under an EPA award need to be
recorded and controlled within a Tribal Nation's
accounting/property management system.
  •   An assistance agreement will identify the
      equipment that was donated or acquired
      under the agreement.
  •   The EPA Proj ect Officer will detail the
      equipment disposition process to be
      followed at the end of the assistance
      agreement.
  •   The Tribal Nation's policies and procedures
      should also address disposition of equipment
      at the conclusion of a project or at the end of
      the equipment's life.

If equipment disposition is an issue, the Tribal
Nation and EPA should work out disposition
details early on in the project period. This is
important so that the closeout process will not be
delayed.

For example:
    Surplus Property
    All departments and program
    coordinators are responsible for reporting
    surplus or excess property to the Financial
Officer. Once surplus property has been
identified, the Financial Officer will
proceed to dispose of such property under
the guidelines provided below in
subsection (E).

Property Disposal
Property disposal decisions are made
through several methods.
These include:
* A date decided upon at the time the
 property was acquired;
* Based upon condition and other factors
 noted in annual inventory reports;
* When property is deemed by the
 Financial Officer in consultation with the
 grants manager to be obsolete;
* When maintenance is no longer cost
 efficient;
* If the intended use is no longer valid and
 there is no other application for other
 Tribal programs.

It is the policy of the Tribal Nation to
make every effort to donate equipment or
other property that has been deemed by
the Financial Officer, in consultation with
the grants manager to be surplus to the
needs of program operations. Such
property shall be made available first to
other Tribal organizations, and in the
event that such equipment cannot be
donated, will be made available to staff
on a lottery basis.

The Financial Officer and grants manager
may establish a fair market value for
items of significant value. Where a price
has been placed on the property the
payment shall be made by the recipient
before the property is turned over and the
funds generated deposited into the
General Fund. In the event that staff does
not request such property, it may be
made available to the general public by
lottery, sealed bid or such other method
as the FO and grants manager may
determine is appropriate. With
concurrence by the President, such
property may be donated directly to a
worthy tribal member with a
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                          Module 5: Administrative System Components
    demonstrated need. Electronic equipment
    deemed surplus will have all identifying
    data removed or deleted prior to disposal.
    All property will be offered as-is with no
    express or implied warranty or technical
    assistance as to use or set-up. In
    disposing of property, the Financial
    Officer shall be responsible for ensuring
    that all federal, state, or other contract
    and grant requirements are complied
    with.
How should we handle leased property?
Leased equipment is not tracked, because the
grantee does not actually own the property.
However, grantees must ensure they follow the
details of the lease agreement. Fees or penalties for
not complying with the lease agreement cannot be
charged to the federal program.

Vehicles used by a program to do the work can be
paid for on a "user fee" based schedule  rather than
purchased or leased outright. The Tribal Nation can
purchase vehicles and charge user fees to  grant
funded projects as needed.
   The Tribal Nation's property management
   system should:
    A.  l>e internally conln tiled tor compliance with
       federal regulations
    B.  Identity and inventory properly acquired
       under an award
    C.  Include written policies and procedures
    1).  Kxplain equipment dispi >sili< »n alter the award
       period or at the end of the equipment's
       useful life
    E.  All of the above
   Disposition of acquired property, after the
   award period or at the end of the equipment's
   useful life, depends on how it is:
    A. Negotiated in the work plan and budget
    B. Handled in the written policies and procedures
    C. Valued when purchased and after use
    D. Deseril>ed in the "terms and conditions" of the award
    E. All of the above
   Inventory Control System

    Capital equipmentpurchased under a federal
    award must be documented in records that:

     = Identify the equipment purchased by asset
       number

     = Identify where the asset is physically located

     c Identify7 the life of the asset and when it should be
       disposed

     = Detail property dispositions
       • date of purchase and cost          2012
Why do we need an inventory control system?
An inventory control system is necessary for
capital equipment and recommended for smaller
purchases. A property inventory should be
conducted at least once every two years. Capital
equipment purchased under a federal award must
be documented in records that:
  •   Identify the equipment purchased; each asset
      should be given an asset number so it can be
      easily located.
  •   Identify where the asset is physically located
  •   Identify the life of the asset and when it
      should be disposed
  •   Detail property dispositions (date of
      purchase and cost)

For example:

        Responsibility for
        maintaining an inventory
        control system shall rest
        with the Accounting
        Department. The inventory
        control system will enable
        the Tribal Nation to verify
        actual physical inventories
        against book inventories. As
        part of this system,  all of the
        Nation's equipment,
        furniture, and hard supplies
        with an expected life span of
        one (1) year or more shall be
        labeled and recorded in the
        inventory system. A
        complete organizational
        inventory shall be conducted
        at least annually, the results
        of which shall be reconciled
        to the property records.
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                         Module 5: Administrative System Components
Below is a sample property list. It can be combined
with depreciation/asset management schedules or
the Tribal Nation can get asset management
modules from EPA.

Appendix documents 40 CFR 31.31, 31.32, and
31.36 explain the regulations for:
  •   Equipment and property purchases
  •   Cost analysis
  •   Purchase and use of goods and services
  •   Inventory
  •   Disposition of property at the end of the
      project or at the end of its life
       Reflection
       Consider how the following policies
       and procedures help manage grants.
         •   Does your organization have
             written property management
             policies and procedures?
         •   Has your organization
             purchased capital equipment on
             any of its active assistance
             agreements?
         •   Does your organization have an
             inventory control system?
   Cost Share and Matching

    The portion of allowable project costs that a recipient
    contributes toward completing its project. Common to
    tribal grants is a 20% cost share/match of a federal award.

     20%  cost  share/match
            Federal ihars  Recipient Mateh
               S 10,960         $2,000
    Check the Terms and Conditions to make sure the match percent is
    not a calculation  against total project costs.

  Cost Sharing, Matching, and In-kind
               Contributions
                  Cost Share
How do we account for cost sharing, matching,
and in-kind contributions?
Cost Share is defined as the portion of allowable
project costs that a recipient contributes toward
completing its  project - costs not borne by the
Federal Government (40 CFR Part 31.24).

In-kind services can also be added to an assistance
award by the recipient. Some examples of a
recipient's in-kind contribution to an award are:
volunteer hours, personnel hours, equipment,
supplies and so on. Recipients' may choose to meet
their cost share or match requirements through in-
kind contributions.

The award recipient must state how they will meet
the match requirements (either cash or in-kind
contributions) in the application work plan and
budget. If in-kind  contributions are proposed, the
plan must explain these contributions.
   Cost Share and Matching (continued)

    Mandatory - when stated in the Catalog of
             Federal Domestic Assistance (CFDA)
             program listing

    Voluntary - negotiated in the agreement and
             required after signing the award

                    Match
Cost Share and Match are essentially the same
(and are often used interchangeably), and it can be
mandatory or voluntary.

It is mandatory when the statute or program
requires it (usually stated in the CFDA). It's usually
          EPA Tribal, U.S. Territories and Insular Areas Administrative and Financial Guidance for Assistance Agreements
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                         Module 5:  Administrative System Components
required in the form of a percentage of the total
project costs ("matching" the federal costs...so if
it's 50% cost share/match, it would be 50% of the
total project cost and would match the federal share
dollar for dollar). Mandatory cost share
percentages are provided in the award document.

Voluntary cost share is exactly what it sounds
like- the recipient volunteers to provide it even
when it is not required by the program. But once
they do volunteer it and the award agreement
becomes official, they are required to provide it -
they've made a commitment.

Both mandatory match and voluntary match can
occur in the same grant. This happens when the
applicant chooses to provide more match than is
required. Offering additional match provides
leverage. It can increase  an applicant's chances to
be selected for an award.
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                                              Module 5:  Administrative System Components
                                                            Table 5: Sample Property List
 Environmental Protection Department
 Property Records
 As of September 30, 2011
Asset
Description

Truck

Car



Copy
Machine



Fax
Machine
Computer -
desktop
Computer -
laptop
Phone
ID or
Serial
#

123456

654321



99999







Cost

$15,000.00

13,000.00



6,000.00







Source
of
Funds

EPA

EPA/
Tribe



EPA







% Fed
Participation

100%

50%



100%







Title
Held
by

EPD

EPD



EPD







Date
Purchased

06/01/11

10/20/8



01/15/08




Date
Sold












Sales
Price












Inventory
Date


09/30/1 1

09/30/09
09/30/10
09/30/1 1

09/30/09
09/30/10
09/30/1 1

Condition

New
like new
New
12000 miles; like new
23000 miles; OKcond
35000 miles; OKcond
New
20000 copies; OKcond
55000 copies; OKcond
83000 copies; OKcond

Location

EPD
EPD
EPD
EPD
EPD
EPD
EPD
EPD
EPD
EPD

Use

Brownfields
Brownfields/UST
GAP/§106
GAP/§106
GAP/§106
GAP/§106
All Env. Programs
All Env. Programs
All Env. Programs
All Env. Programs

Optional at Department Level:
Estimated Useful
Life (months)
60
Estimated Disposal
Value
$3,000.00
Depreciation. Method
SL
Depreciation for Period
$800.00
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                         Module 5:  Administrative System Components
    Match must be allocable to the grant.
  No alcohol or other unallowable expenses
              can be counted!
Leveraged match need not be stated in dollar
amounts. It is often better to provide a narrative
statement. For example, "The city of Denver has
agreed to donate transportation services (school
buses and drivers) for the duration of this project.'
        Leverage funds to increase your
               competitive edge.
   In-Kind Contributions

    • Non-monetary contributions with a quantifiable
     value, such as donations of:
     " Time and effort = actual/market value
     = Goods or services = market value
     c Supplies or equipment = market value

    • Third-party- contributed by someone other
     than the recipient or EPA
             In-Kind Contributions
In-kind contributions and services can be used as
match if not from a federal agency. It is a non-
monetary contribution that can be quantified
monetarily in some way. Third-party in-kind just
means it is an in-kind contribution coming from
someone other than the recipient or grantor. This
may be a partner or someone with whom they are
collaborating.

When EPA provides in-kind services (e.g., lab
services, office space, etc.), they cannot be used as
match because they count as part of the federal
government's contribution.

In-kind contributions and services cannot be paid
for with federal funds from any program, except
health care provided under the Indian Serf-
Determination and Education Assistance Act
(ISDEA), Public Law 93-638. For an explanation
of the Serf-Determination Act, download Tribal
Self-Determination from the Indian Health Service
(IHS) at http://info.ihs.gov/TreatiesLaws/2-
TribalSelfDetermination-Jan2005.doc.
   Document Worth

    • Cost sharing, matching, and in-kind
     {contributions are gills or donations of time,
     goods, and/or services  made loward the project
     by the Tribal Nation or other benefactors.
    • Track and account for all funding in the same
     way, including market value of donations.
    • Contact your HFA Project Officer if you think
     your organization may  qualify for a cost share
     waiver.
                Documentation
Cost sharing, matching, and in-kind contributions
are gifts or donations of time, goods, and/or
services made toward the project by the Tribal
Nation or other benefactors. These contributions
must be tracked and accounted for in the same
manner as EPA funding. Accounting for third party
in-kind contributions provides an accurate record
of the true cost of the project.

For example:
  •   Record of supplies donated by a third party
      need to be kept in a separate file with:
        A signed form from the third party
        Description of the contribution and how
            the supplies were used
        A copy of the invoice  from the third party,
            if possible
        Supplies should be valued at market value
            when reporting the contribution and
            cannot be paid for with any federal
            funds.
  •   Time donated by the Tribal Nation needs to:
        Be  recorded by the employee
        Explain how much time was donated on
            the project
        Contain the employee's signature
        State that time and effort recorded were
            spent on the project
        This time cannot be paid for with any
            federal funds.*

* Note that  a cost share or match requirement may
be met by costs borne by another Federal grant if
and only if there is a federal law permitting you to
use the other federal funds to satisfy the match
requirement under your EPA grant.
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                         Module 5: Administrative System Components
                   Waivers
Under some grant programs your organization may
request a waiver of the cost share requirement, if
the cost share will impose an undue hardship.
Check with your EPA Project Officer to see if your
organization can and should request a waiver.

How to account for and report cost sharing,
matching, and in-kind contributions is explained in
the following documents provided in the Appendix.
   •   40CFR31.24
   •   OMB Circular A-87
   Program Income
                    PROFIT & LOSS
                    Dcteml«T31,201i
          Ordinary Income/Expense
               Expense
               Personnel
               Fringe Benefits
               Travel
               Equipment
               Supplies
               Contractual
               Constructor)
               Other
               Indirect
               Total Expense
                                     40,000.00
      Reflection
      Consider how cost sharing impacts
      management of your assistance agreement
      award.
         •   Does your organization currently
            have any matching, cost sharing,
            and/or in-kind contributions
            included in any active awards?
         •   Does your organization anticipate
            any of these types of costs in the
            foreseeable future?
         •   If you answered "yes" to either of
            the above questions:
              o   Where do your matching costs
                  come from?
              o   Are these cost percentages
                  described in the "terms and
                  conditions" of the assistance
                  agreement?
              o   Does your organization track,
                  record, report, and verify these
                  costs?
              o   Are all matching costs
                  verifiable from accounting
                  records and valued according
                  to applicable OMB Circular
                  A-87 cost principles?
             Program Income

What do we do if award activities actually make
money?

A Tribal Nation may at times receive income in
addition to the funds on an assistance agreement.
Program income is defined as "gross income
received by the grantee	directly generated by a
grant supported activity,  or earned only as the
result of the grant agreement during the grant
period." Program income includes fees from
services performed under the grant, and income
from sale of commodities or items fabricated under
a grant agreement.  Revenue you receive from
sources to support the program that doesn't directly
result from grant activities is not program income.
Anticipated program income will be detailed in
the application.

Examples of Program Income:

    •   Fees charged to register participants for a
        workshop or conference during the grant
        period.
    •   Revenue realized through the sale of
        products made under a grant program
        during the grant period.
    •   Membership fees charged to individuals
        and organizations for grant related
        activities during the grant period.
    •   Rental or usage fees charged for use of
        supplies or equipment purchased with
        grant program funds during the grant
        period.

Example that is NOT Program Income:

Funds donated to be used for a project, but without
restriction that services be provided in return, are
NOT program income
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                         Module 5: Administrative System Components
The handling of income will be calculated into the
total amount of the assistance award. Regulations
allow grantees various ways to dispose of program
income, including adding or deducting it from the
amount of federal funds awarded. Project Officers
include this as part of their negotiations of the work
plan and budget.

When an assistance agreement contains
program income, a Tribal Nation must account
for and track these funds in the same manner as
expended federal funds. Again, it is very
important to track the program income funds in
a separate charge code from the EPA funds.

A Tribal Nation needs to ensure that adequate
internal controls are in place to properly account
for these funds. Funds must be specifically
identified in the project budget and in Financial
Status Reports (FSRs).
Cost reports show all income and related expenses.
   Which of the following is not considered
   program income?

   A. Fees charged to register participants for a workshop or conference
      during the grant period
   B. Revenue realized through the sale of products made under a grant
      program during the grant period
   C. Revenue you receive from sources to support the program that
      doesn't directly result from grant activities
   D. Membership fees charged to individuals and organizations for
      grant related activities during the grant period
   E. All of the above
      Reflection
      Consider how the following might impact
      management of your assistance agreement.
        •   Has any program income been used
            as matching or contribution for any
            current award?
        •   Has any program income been
            added to the funds committed for
            the project?
        •   Does the project budget allow
            adding program income?
        •   In the award's "terms and
            conditions", is there a condition that
            permits the use  of program income
            for match requirements?
        •   If not specified  in the proj ect budget
            or award "terms and conditions",
            has the program income been
            deducted from the total allowable
            project cost in your award budget?
Program income regulations are provided in the
Appendix in 40 CFR Part 31.25.
                                Save all
                                Records

                             Write policies
                             and procedures
                             on records
                             management
                             and retention.
 Records Management and Retention
Do we need policies and procedures on records
management and retention?
Tribal Nations need written policies and
procedures that address the types of files and
documentation required for records management.
A good filing system ensures adequate
documentation. Each assistance agreement award
must have its own file kept separate from other
awards and grants. Folders can be kept in different
departments as long as a record of where they are
located is included in the master file.
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                          Module 5: Administrative System Components
Thorough documentation describes the activities
conducted under an assistance agreement.
Documentation shows how activities are properly
carried out, in accordance with a Tribal Nation's
leadership and EPA/federal requirements.

Basic files needed for managing EPA assistance
agreement awards include:
    •   The original application and certifications
        including the work plan and budget
    •   Initial award and amendment documents
    •   Request and/or approvals for
        scope/budget changes
    •   Federal Financial Report (FFR) Standard
        Form (SF) 425, if applicable
    •   General ledger detailing revenues,
        expenditures, assets, and liabilities
    •   Support documents for expenditures
Basic files needed for managing EPA assistance
agreement awards also include:
    •   Equipment files and usage logs
    •   Payment requests
    •   Progress reports
    •   Contracts/subawards
    •   Correspondence (letters, emails, and notes
        taken during phone conversations)

The following guidelines are provided in the
Appendix.
    •   40 CFR 31.30(a)(b)(c) address request for
        and approvals of scope and/or budget
        changes
    •   40 CFR 31.41 (b) address financial status
        reports and reimbursement requests
    •   40 CFR 31.21 address  payment requests
        backed up by financial records
    •   40 CFR 31.40(b) address progress reports
    •   40 CFR 31.37 refer to  subgrants
    •   40 CFR 31.42 records  retention
        regulations
   Records Retention
    Check with your EPA Project Officer for specific
    dates applied to your award.
        Project Period


   January 1, 2009-December 31, 2009
  Closeout      Records Retention


February 1, 2O10 January 1, 20O9-January 31, 2OH
   Sample Retention Period
How long do we need to keep the records?
Records retention requirements depend on the
grant program. EPA policy requires that records be
                                   retained for at least three (3) years after the award
                                   period ends. Tribal Nations who receive Superfund
                                   money may be required to keep records for up to
                                   ten (10) years. The retention period can be
                                   extended for a variety of reasons. Check with your
                                   EPA Project Officer for specific dates applied to
                                   your award.
                                      Assistance agreement records:

                                       A. Document financial activities
                                       B. Describe program and project activities
                                       C. Show how award activities are performed
                                       D. Are kept separate from other grants
                                       E. All of the above
                                      How long must EPA assistance
                                      agreement records be kept on file?

                                       A. 1-2 years
                                       B. 3-5 years
                                       C. 5-10 years
                                       D. It varies, usually 3-10 years. Check with your Project
                                         Officer
                                       E. As long as you think it is necessary
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                                                               Attachment to  Module 5
                                                       Answers to Quizdom Actionpoint Questions
         Which of the following is the most important requirement of a payroll processing
         system?
               A.   Pay grades
               B.   Time sheets
               C.   Internal controls
               D.   How employees are paid
               E.   All of the above
Though all of the above are important, EPA is mainly concerned that the payroll process has
internal controls to protect award funds from fraud, waste, and misappropriation.
11
         Which of the following does not need to be included on personnel time sheets?
               A.   Employee's name
               B.   Employee's social security number
               C.   Hours worked and on which project
               D.   Department/project budget codes
               E.   Department for which the employee works
To protect employee privacy, do not include personal information such as home address, phone
number, or social security number on time sheets.
14
         Personnel time sheets track work by the:
               A.   Employee's social security number
               B.   Hours worked and on which project
               C.   Inventory codes and dates
               D.   Project name and task responsibilities
               E.   All of the above
The most efficient and effective way to track employee time spent working on a project is to
require personnel to fill out time sheets. Time sheets track work by the number of hours worked
on each project for which they are responsible.
19
         A grantee can provide leave for personnel working on a federal assistance agreement
         project even if other employees do not get leave.
               A.   True
               B.   False
               C.   It depends on the "terms and conditions" of the award.
               D.   It depends on the type of award granted.
               E.   Yes, when so stated in the Tribal Nation's payroll policy.
Benefits are only given to grant personnel when all personnel working for the grantee are given
the same benefits.

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                                                      Module 5:  Administrative System  Components
26
          Reimbursement of travel expenses for personnel working on federal awards are
          handled the same as those for other employees of the Tribal Nation.
               A.   True
               B.   False
               C.   It depends on the "terms and conditions" of the award.
               D.   It depends on the type of award granted.
               E.   Only when so stated in the Tribal Nation's travel policy
                                               Travel expenses should be processed the same way for all the Tribal Nation's employees.
29
         The Tribal Nation's travel policies must comply with the U.S. General Services
         Administration (GSA) allowable costs.
               A.   True
               B.   False
               C.   It depends on the "terms and conditions" of the award.
               D.   It depends on the type of award granted.
               E.   Only when costs are not addressed by the Tribal Nation's
                    policies
                                               The Tribal Nation must establish its own travel policies. If they do not want to have a policy related
                                               to costs, they may use the GSA allowable costs for lodging and meals.
47
          Price analysis is the comparison of:
               A.   Contractor relationship
               B.   Vendor proximity
               C.   Market price
               D.   Free shipping
               E.   All of the above
                                               Price analysis compares prices quoted by possible vendors/suppliers or contractors and standard
                                               market prices.
50
          Cost analysis requires which kinds of data:
               A.   Totals per cost category
               B.   Contractor relationship
               C.   Vendor location
               D.   Free shipping
               E.   All of the above
                                               Cost analysis requires the grant recipient to collect and examine as much data as possible before
                                               making a decision on procurement or purchasing issues.
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                                                    Module 5: Administrative System Components
54
                          Question (bold font indicates correct answer)
         The Tribal Nation's property management system should:
               A.   Be internally controlled for compliance with federal regulations
               B.   Indentify and inventory property acquired under an award
                   Include written policies and procedures
                   Explain equipment disposition after the award period or at the
                   end of the equipment's useful life
                   All of the above
 C.
 D.
               E.
                                                                    These are true for all award management and administrative systems.
57
         Disposition of acquired property, after the award period or at the end of the
         equipment's useful life, depends on how it is:
               A.   Negotiated with the work plan and budget
               B.   Handled in the written policies and procedures
               C.   Valued when purchased and after use
               D.   Described in the "terms and conditions" of the award
               E.   All of the above
                                                                    Disposition of property should be negotiated during work plan and budget discussions with the
                                                                    EPA project officer prior to award. The value of the property may influence negotiated "terms and
                                                                    conditions", which are stated in the award document.
67
         Which of the following is not considered program income?
              A.   Fees charged to register participants for a workshop or conference
                  during the grant period
                  Revenue realized through the sale of products made under a grant
                  program during the grant period
                  Revenue you receive from sources to support the program that
                  doesn't directly result from grant activities
                  Membership fees charged to individuals and organizations for grant
                  related activities during the grant period
                  All of the above
                                                                    Funds donated to be used for a project, but without restriction that services be provided in return,
                                                                    are NOT program income. Revenue you receive from sources to support the program that doesn't
                                                                    directly result from grant activities is not program income.
B.
C.
D.
              E.
73
         Assistance agreement records:
               A.   Document financial activities
               B.   Describe program and project activities
               C.   Show how award activities are performed
               D.   Are kept separate from other award documents
               E.   All of the above
                                                                    Records should be kept on all activities associated with an award.
Last Updated April 2013
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                                                    Module 5:  Administrative System Components
                                       font indicates correct ans
76
         How long must EPA assistance agreement records be kept on file?
               A.   1-2 years
               B.   3-5 years
               C.   5-10 years
               D.   It varies, usually 3-10 years. Check with the Project Officer
               E.   As long as is indicated  in the "terms and conditions"
                                             Records should be kept for a minimum of three years, but this varies by funding program. Check
                                             with your EPA Project Officer for specific dates.
Last Updated April 2013
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