Interim General Budget Development Guidance for Applicants and Recipients of EPA
Financial Assistance
Contents
Introduction 1
Applicability 1
I. Factors to Consider for All Cost Categories 2
A. General Principles for Cost Allowability 2
B. Prior Approval of Costs 3
C. Pre-Award Costs 4
D. Cost Share (a.k.a. Match) 4
E. EPA In-Kind Assistance 5
F. Pre-Award Budget Revisions 6
G. Program Income (PI) 6
H. Miscellaneous 9
II. Personnel and Fringe Benefits 10
A. Personnel 10
B. Fringe Benefits 11
III. Travel 13
A. Trips Covered by Travel Category 13
B. Travel Budget Narrative 14
C. Allowable Travel Costs 15
IV. Equipment 15
A. Definition of Equipment 15
B. Prior EPA Approval for Equipment Purchases 16
C. Allowability of Equipment Costs 16
D. Procedures for Purchases of Equipment 17
V. Supplies 17
A. Definition of Supplies 17
B. Supplies Budget Narrative 18
C. Procedures for Purchase of Supplies 18
VI. Contracts 19
A. General 19
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B. Special Contracting Situations 20
C. Competition Requirements 22
VII. Construction 25
A. General 25
B. Eligible Construction Costs 26
C. Prevailing Wages 26
VIII. Other 26
A. General 26
B. Special Considerations for Other Direct Costs 27
C. Rental/Lease 27
D. Participant Support Costs 28
E. Subawards 30
IX. Indirect Costs 32
A. Definitions 32
B. EPA IDC Policies 32
C. Distribution of IDC Charges 33
Appendix 1 - Document Acronyms 35
Appendix 2 - Sample Budget Detail/Narrative 36
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Introduction
Proper characterization of costs is important for effective management of the Environmental
Protection Agency (EPA) financial assistance (grants and cooperative agreements) awards. EPA
conducts pre-award cost reviews for all assistance agreements, except those awarded on a fixed
amount basis. Correctly characterizing costs will make the review process more efficient for both
EPA and recipients. Additionally, properly characterized costs are less likely to be questioned
by auditors since many of the rules for expending EPA funds are predicated on the types of costs
recipients incur.1 It is important for recipients to consult with their EPA Project Officers
(PO) and Grant Specialists (GS) when considering incurring costs that seem unusual or are
covered by the regulatory requirements described below.
A list of Acronyms is available in Appendix 1. EPA has provided a sample budget narrative in
Appendix 2.
Note: This interim guidance uses the terms "applicant" or "recipient" to refer to the non-Federal
entity applying for or receiving Federal funds depending on the context.
Applicability
This interim guidance is a tool that may be used by applicants and recipients of EPA funds when
preparing proposed work plans, budgets, and budget narratives for EPA assistance agreements
for project grants/cooperative agreements and continuing environmental program (CEP) grants
except to the extent cost categories are covered by EPA's:
Interim Guidance on Cost Review of Grants/Performance Partnership Grants Awarded
under 40 CFR Part 35 Subpart A
Grants Policy Issuance 13-02: Streamlining Tribal Grants Management (40 CFR Part 35
Subpart B Programs).
The interim guidance supplements but not supersede these Part 35 Subpart A and B guidances.
It is not intended for use on State Clean Water and Drinking Water Revolving Loan Fund
capitalization grants.
The interim guidance does not supersede requirements contained in regulations, the terms and
conditions of EPA financial assistance agreements, or published EPA policies. Consistent with 2
CFR 200.302(a), it does not require that states alter their internal accounting systems, create
crosswalks, or take actions that are otherwise unnecessary to comply with the requirements of
the regulation. If a state identifies a conflict between the cost categorization described in the
interim guidance and state accounting systems, it should contact EPA's Grants Management
Officer to resolve the matter.
1 This guidance uses the terms "applicant" or "recipient" interchangeably depending on the context.
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I. Factors to Consider for All Cost Categories
A. General Principles for Cost Allowability
1. The general standards for determining allowability are described in the 2 CFR Part
200 Uniform Grant Guidance or "UGG" at 2 CFR 200.403. Costs must be necessary for
the performance of the EPA award and not be prohibited by statute, the 2 CFR Part 200
Subpart E Cost Principles, another regulation, program guidance, or the terms of the
award.
a. Eligible: A cost is eligible if it is permitted by statute, program guidance, or
regulations. For example, land acquisition and construction costs are not eligible
training costs as provided at 40 CFR 45.145(b). There may be statutory
prohibitions or limitations on cost eligibility particularly for administrative costs
under EPA assistance programs such as Brownfields at 42 U.S.C. 9604(k) or the
Clean Water Act section 319 Non-point Source programs at 33 U.S.C.
1329(h)(12). Some program offices issue guidance or include terms and
conditions that make otherwise allowable costs ineligible such as prohibiting
recipients from incurring participant support costs (described below) for trainee
travel or stipends. It is important for recipients to carefully review the terms of
their agreements and program guidance to determine what costs are eligible.
b. Reasonable: A cost is reasonable if it does not exceed that which would be
incurred by a prudent person under the circumstances prevailing at the time the
decision was made to incur the cost. Factors for determining the reasonableness
of costs are set forth at 2 CFR 200.404. For example, costs that are not ordinary
for performing the scope of work for the agreement are not reasonable.
Purchasing vans to transport conference attendees to site visits would not be
reasonable while hiring a transportation company to provide a bus and driver for a
few days would. Also, salary costs may be questioned as unreasonable under 2
CFR 200.404(e) if the recipient compensates employees at a higher rate when
their time is charged to EPA grants than for work that is not Federally funded.
c. Allocable: A cost is "allocable" to an assistance agreement for the purposes of
2 CFR 200.405 if it benefits the EPA funded project or program and the costs are
distributed in reasonable proportion to the benefits or if it is incurred specifically
to carry out the project or program. Essentially, to be allocable the cost must be
incurred either directly or indirectly to carry out the scope of work. For example,
the day to day costs for the operation of a human resources department would not
be allocable to the agreement as a direct cost but may be included in the
recipient's indirect cost pool.
(1) Indirect costs are allocable to assistance agreements when a Federally
approved indirect cost rate is properly distributed to the recipient's base.
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Additional information on indirect costs is available in section IX of this
Guidance.
(2) Some recipients have multiple sources of funding and must allocate
direct costs among activities in proportion to the benefits derived from the
costs. These costs are allocated separately from indirect costs and should
be included in the appropriate direct cost category.
(a) Examples of direct costs that may be allocated include utilities,
cell phone charges, space rental, and general office or laboratory
equipment that are not covered by the recipient's indirect rate.
(b) Recipients should have adequate systems in place to properly
allocate these types of direct costs and the recipient's budget
should reflect the allocations.
d. Allowable: The UGG identifies certain costs that may not be charged to EPA
assistance agreements under any circumstances. Examples include alcoholic
beverages (2 CFR 200.423). interest on borrowed funds (2 CFR 200.449). and
lobbying or litigation (2 CFR 200.450).
B. Prior Approval of Costs
1. There is a list of items of cost requiring prior EPA approval at 2 CFR 200.407. some of
which are addressed in this Guidance, as well as guidance for specific items of cost. For
example, EPA has prior approval guidance for:
a. Advertising and public relations;
b. Advisory Councils;
c. Entertainment;
d. Fund raising;
e. Meals and light refreshments at conferences;
f. Proposal preparation costs; and,
g. Participant support costs.
Applicants may refer to EPA's Guidance on Selected Items of Cost for Recipients and
EPA's Interim Participant Support Cost Guidance for additional information. Recipients
should consult with their POs before including any costs requiring prior EPA approval in
their work plan or budget narrative.
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2. When an applicant's proposed scope of work and/or budget narrative adequately
identifies and describes an item of cost requiring prior EPA approval, EPA considers the
costs approved when the Award Official signs the agreement unless the terms and
conditions of the award provide otherwise. Precise descriptions are necessary. Simply
budgeting for an item of cost allowable only with prior EPA approval is not enough. The
applicant's budget narrative or scope of work must clearly place EPA on notice that the
recipient intends to incur the cost subject to prior EPA approval.
3. Other EPA approvals for items of costs may take place post-award by authorized EPA
officials. Currently, EPA POs do not have authority to make final regulatory
determinations for prior approvals specified at 2 CFR 200.407 or other provisions of
the UGG. Recipients should consult with their GSs on procedures for obtaining post-
award prior approvals from an EPA Grants Management Officer.
C. Pre-Award Costs
1. The allowability of pre-award costs are governed by 2 CFR 200.458 and 2 CFR
1500.8 unless a program specific regulation (e.g. 40 CFR 35.6275(b) for Superfund
Cooperative Agreements or 40 CFR 35.4100 for Technical Assistance Grants) prohibits
or restricts the allowability of pre-award costs.
2. EPA defines pre-award costs as costs incurred prior to the award date, but on or after
the start date of the budget/project period. Under EPA's interpretation of 2 CFR 200.309.
all eligible costs must be incurred during the budget/project period as defined by the start
and end date shown on the grant award to receive EPA approval. This policy is
implemented in a grant-specific Term and Condition entitled "Pre-award Costs".
3. The budget/project periods must be consistent with that shown in section 17 of the
Standard Form 424 (SF-424) and the Applicant's Workplan.
D. Cost Share (a.k.a. Match)
1. As provided at 2 CFR 200.306(b) costs that an applicant intends to count towards
meeting a cost share requirement must be necessary and reasonable, allowable, and
allocable under the UGG as well as eligible under the EPA assistance program, and
included in the EPA approved budget. Absent authority provided by a Federal statute,
applicants may not use Federal funds to meet cost share requirements. Applicants must
categorize contributions towards cost-shares required by statute, regulation, or the terms
of the assistance agreement in the appropriate budget category. Voluntary cost shares
must be reflected in the appropriate budget category.
2. In order for cost shares to be allowable, contributions must be verifiable from the
applicant's accounting records as required by 2 CFR 200.306(b)(1). The applicant's
records should account for in-kind contributions from non-Federal sources (i.e.
personnel, contractual, equipment, supplies, indirect) in the appropriate cost category so
that EPA can easily determine allowability. For example, if the applicant does not intend
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to charge the EPA assistance agreement for all the time its employees spend working on
the EPA assisted project, the applicant may include their salaries or wages in the
personnel category for cost share purposes.
3. Volunteer services (e.g. uncompensated services provided by non-employees of the
organization) may be counted as cost sharing or matching if the service is an integral and
necessary part of an approved project or program. These volunteer contributions towards
cost shares must be included in the "Other" category. These contributions should be
valued based on the work the volunteer performs. For example, in a situation in which an
applicant intends to count time spent by volunteers performing sampling work towards
cost share, the contributions should be valued based on hourly market rates for employees
of sampling firms or government employees performing sampling. The volunteers' time
would not be valued based on what they get paid at their place of employment.
4. Applicants may apply costs incurred for facilities, equipment use, and related services
(e.g. audio-visual support for a conference) as cost share when the facilities, equipment,
and services are used to perform the EPA award. The same costs must not be charged to
any other EPA agreement, a financial assistance agreement with another Federal agency,
or included in the applicant's indirect cost rate to qualify as cost share.
5. Voluntary cost shares offered by applicants for competitive assistance agreements
must be included in the "Budget Information for Non-Construction Programs". Standard
Form (SF) 424A and are binding on the recipient.
a. EPA program offices that are willing to accept voluntary cost shares will
include a notice to that effect in the competition announcement.
b. Voluntary costs shares are a form of leveraging that may only be met with
eligible and allowable costs.
c. Some competitive programs encourage applicants to explain how an EPA
award can leverage funds from other sources for related activities beyond the
scope of work for the award. For example, an EPA grant to clean up a site may
leverage funds for low income housing at the site after the cleanup is complete.
The funding for the low-income housing is leveraged but is not a cost share
because housing is not an eligible cost under the EPA grant. Applicants should
not place leveraged funds that are not part of a voluntary cost share in the SF-
424A budget form.
E. EPA In-Kind Assistance
1. An EPA award, at the Agency's discretion, may include in-kind assistance provided
by EPA (including contractor support and purchases or leases of equipment or purchases
of supplies), or EPA personnel under Intergovernmental Personnel Act assignments or
Interagency Agreements. In-kind assistance that EPA provides is different than in-kind
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contributions an applicant contributes or obtains from third parties for the purposes of
meeting a cost-share requirement.
2. An applicant may request in-kind assistance or EPA may decide to offer that
assistance in lieu of direct financial assistance.
3. These costs should be assigned to the appropriate cost category. For example, if EPA
purchases equipment that will be delivered to an applicant as EPA in-kind assistance, the
cost for those items would be placed in the equipment category. On the other hand, if
EPA provides in-kind technical services through an EPA contractor, the costs would be
placed in the contractual category. Only authorized EPA personnel may assign tasks to
EPA contractors.
4. Any cost sharing requirements apply to the amount of the EPA in-kind assistance in
addition to the EPA funds. Also, applicants may not count the amount of EPA in-kind
assistance towards their cost-share.
5. An applicant must acknowledge the amount and purpose of the in-kind assistance by
including the estimated amount in the budget request.
F. Pre-Award Budget Revisions
In situations in which changes to an applicant's budget are necessary due to incorrect cost
categorization or otherwise, POs and GSs will work with the applicant to document revisions to
budgets.
1. The applicant must submit a revised version of Section B "Budget Categories" of the
SF-424A. budget narrative, and other budget related documents so that they are
consistent with the Approved Budget in the Award Document.
2. For state and tribal non-competitive continuing environmental program grants, "pen
and ink" changes to applicant budgets may be acceptable. This means that EPA may be
able to make changes to existing applicant forms rather than obtaining new ones,
provided such changes meet certain conditions. The conditions and programs for which
such changes are allowed are defined in Grants Policy Issuance 12-06 (for states) and
Grants Policy Issuance 13-02 (for tribes).
G. Program Income (PI)
1. PI is defined at 2 CFR 200.80 as gross income directly generated by the EPA
supported activity or earned as a result of the EPA award during the period of
performance. Applicants must include estimates for PI in line 13 of their SF-424A
budget form. Examples of PI include fees for services (e.g. conference or training
registration fees), sales of products produced with EPA funds, and loan interest payments
from loans an applicant will make with EPA funds. The projected value of program
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income that will be generated and used during the grant period must always be shown on
line 7 of the SF-424A budget form.
a. PI does not include refunds, rebates, and similar transactions in which the
recipient recoups previously expended EPA funds. Disposition of refunds,
rebates etc. is governed by 2 CFR 200.305(b)(5). 2 CFR 200.406. and 2 CFR
200.344(a)(2).
b. Proceeds from the sale of real property, equipment, and supplies purchased
with EPA funds is not PI. 2 CFR 200.307(d). The property regulations at 2 CFR
200.311 (real property). 2 CFR 200.313 (equipment) and 2 CFR 200.314
(supplies) provide guidance on the disposition of proceeds from the sale of these
items.
c. As provided at 2 CFR 200.307(c) governmental revenues (e.g. fines, special
assessments) are not PI. It is EPA policy to treat permit fees generated by state,
tribal or local environmental programs as governmental revenues rather than PI
per 2 CFR 1500.7(a).
d. There may be program income implications when a recipient of EPA funds
charges membership fees for exclusive services that are provided
using EPA award funds or matching funds and the organization receives more
than 50% of their annual revenue from EPA assistance agreements. Applicants
who may be in this situation should consult their Project Officer for additional
guidance.
2. Federal policy encourages applicants to earn income to defray program costs. 2 CFR
200.307(a).
3. Rules governing PI are set forth at 2 CFR 200.307 and 2 CFR 1500.7. Under 2 CFR
200.305(b)(5) and 2 CFR 200.343(d) recipients must disburse PI before requesting
additional EPA funds and refund PI accrued at the end of the agreement unless an EPA
regulation (e.g. 2 CFR 1500.7(c) for Brownfields Revolving Loan fund agreements)
provides otherwise.
a. There are three potential dispositions of PI: deduction, addition, and cost
sharing. EPA's general policy as provided at 2 CFR 1500.7(b) is that "addition"
is the default use of PI unless the terms and conditions of the award provide
otherwise.
(1) The deduction method requires the recipient to deduct PI from total
allowable costs to determine net allowable costs. 2 CFR 200.307(e)(1).
EPA policy, as reflected at 2 CFR 1500.7(b) disfavors the use of the
deduction method.
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(2) The addition method allows applicants to add PI to the EPA funding
and use it under the terms and conditions of the EPA award including
regulations governing the allowability of costs. 2 CFR 200.307(6) (3).
(a) For example, a recipient could not use PI generated by
conference registration fees to purchase alcohol for a reception as
that practice would violate 2 CFR 200.423.
(b) As provided at 2 CFR 1500.7(b) the addition method applies to
EPA assistance agreements by default unless the terms of the EPA
assistance agreement provide otherwise. Applicants SF-424A
budgets must include estimates of PI on line 7 and the budget
narratives should contain a clear description of the planned use of
PI. Applicants must have accounting systems that properly
recognize, account for, and expend PI to under the addition
method. 2 CFR 200.302(b)(3).
(3) With prior EPA approval, applicants may use PI to meet cost sharing
requirements as provided at 2 CFR 200.307(a)(2). Additional guidance on
using PI for cost share is provided below.
b. As provided by 2 CFR 200.307(b) if authorized by the terms of the award or
an EPA regulation, applicants may deduct costs incidental to generating PI from
gross income to determine net PI if the costs have not also been charged to the
EPA award.
c. In situations in which EPA is only partially funding the activity generating PI,
an appropriate adjustment must be made to ensure that the amount of funds
designated PI fairly reflects EPA's contribution to the revenue generating activity.
For example, under the addition method, if the EPA award (including cost share)
accounts for 50% of the cost of a conference, only 50% of the registration fees
would be considered PI. In calculating the proportion of the cost attributable to
the EPA award, the recipient must exclude the amount of revenue from
anticipated fees. PI may only be used for allowable conference costs (e.g. a
recipient could not use PI generated by registration fees to purchase alcohol for a
reception, as that practice would violate 2 CFR 200.423.)
d. All program income earned during the grant period must be reported in Federal
financial reports, including amounts in excess of the projected total shown on line
7 of the SF-424A budget form.
4. Program income when used for cost share can be complicated.
a. The amount of program income, if any, that is expected to be used to be used
for cost share must be included in Column (f) "Non-Federal" of Section A
"Budget Summary" table on the SF-424A. The total amount of PI that the
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applicant expects to generate for both cost share and addition, if applicable must
be included in Line 7 of Section B "Budget Categories". If program income is
not going to be used for cost sharing, the PI should only be included in Line 7.
b. In instances where program income is being used for cost sharing and the
recipient fails to generate sufficient program income to meet its cost share
requirement, it will either have to make up for the shortfall with other non-Federal
funds or it will be limited to the proportional amount of federal funds that are
commensurate with the level of program income generated.
5. There are no Federal requirements on the use of PI earned after an award period ends
unless an EPA regulation or the terms of the agreement provide otherwise. Under 2 CFR
200.307(f) and 2 CFR 1500.7(c) EPA may negotiate close out agreements to govern the
use of accrued and future PI.
H. Miscellaneous
1. Depending on state, tribal or local law, transfers of funding between departments or
agencies of the same unit of government may be Interagency Service Agreements for
distribution of direct costs, subawards, or procurement contracts. Budgets describing
these types of transactions will take various forms but must clearly assign costs to
appropriate categories.
a. Under 2 CFR 200.302(a) states expend and account for the Federal award in
accordance with state laws and procedures for expending and accounting for the
state's own funds.
b. POs and GSs will work closely with governmental applicants to develop
accurate information on how EPA funds will be transferred and expenditures
characterized for budget purposes. For example, applicants may either provide
separate budgets (encompassing both direct and indirect costs) for each
department's share of the EPA award or characterize the transactions as
subawards if permissible under state, tribal or local law.
(1) If the governmental applicant provides separate budgets for each
department, the EPA award document should include separate budget
worksheets for each department receiving EPA funds. However, these
budgets may be consolidated into a single budget table at the time of
award depending on Regional or Headquarters practice.
(2) If the governmental applicant characterizes the funding transfers
among departments as subawards, a line item amount should be included
in the budget narrative for the "Other" cost category. The applicant must
comply with the requirements for pass-through entities at 2 CFR 200.331.
if the transfer will be in the form of a subaward.
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(3) If under state, tribal or local law transactions between agencies is
classified as a procurement contract, then the costs may be classified as
contractual. Transactions between agencies or departments of other units
of government may also be classified as contractual depending on the
nature of the transaction and state, tribal or local law.
c. Additional information on Interagency Transfers between departments of the
same unit of government is available in the Office of Grants and Debarment's
(OGD) Frequent Questions on the Subaward Policy.
2. Transfers of funds between departments of the same Institutions of Higher Education
(IHE) are governed by the IHE's internal policies and procedures and EPA does not
consider these transactions subawards or procurement contracts for the purposes of the
UGG.
II. Personnel and Fringe Benefits
A. Personnel
1. This category includes only direct costs for the salaries, wages, and allowable
incentive compensation for those individuals who are employees of the applicant's
organization who will perform work directly for the project. Employees receive W-2
forms for Federal tax purposes. Note that under 2 CFR 200.444 there are substantial
restrictions on the allowability of direct costs for salaries of Governors, Chief Executives
of tribal and local governments, legislators etc.
a. Consultant costs (i.e. services provided by individuals who are not employees)
are classified as contractual rather than personnel.
b. Compensation for program participants (e.g. stipends or other allowances)
such as interns and fellows (other than individual fellowships under 40 CFR Part
46) who are not employees of the recipient organization are participant support
costs and should be classified as "Other".
c. Costs for employees of subrecipients are included in the "Other" budget
category in the line item for subawards. Pass-through entities may require that
subrecipients prepare budgets in a format the coincides with Section B "Budget
Categories" of the SF-424A.
2. If no personnel costs are identified in the budget, the applicant is responsible to EPA
for reporting, overseeing any contracts (including consultant contracts), or subawards
entered into under the assistance agreement and for managing any acquired or leased
equipment and supplies. Unless the work plan provides an adequate explanation, EPA
may ask for a written explanation of how the award will be managed in the absence of
charges for personnel costs.
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3. The applicant's budget detail should identify the personnel category type by Full Time
Equivalents (FTEs), including percentage of FTEs for part-time employees, number of
personnel proposed for each category, and the estimated funding amounts.2
a. For example, 4 engineers @ $125,000, 2 scientists @ $75,000, 1 manager @
$200,000, etc. The personnel budget should also indicate the percentage of time
each employee will devote to the EPA funded project (e.g. 25% of the time for 1
engineer at $125,000 per year equals $31,250 per year).
b. Note that applicants may also depict their personnel costs based on hourly rates
and numbers of anticipated hours that will be charged to the assistance agreement.
For example, the personnel budget could indicate that an employee will be
compensated at $25.00 per hour and the applicant anticipates that the employee
will work 15 hours per week on the EPA funded project.
4. The applicant should ensure the amounts for personnel and fringe benefits specified in
the budget narrative agree with the amounts specified in the applicable budget category in
the SF-424A.
a. Applicants may be asked to provide supporting documentation demonstrating
that salaries and wages are not excessive particularly when an EPA assistance
agreement will bear 100% of the costs for an individual's compensation.
b. EPA may ask the applicant to provide documentation that the compensation
rates are based on a written personnel policy that is applied consistently to Federal
and non-Federal activities. Applicant employees must not receive compensation
for activities charged to EPA assistance agreements that are higher than what the
recipient pays the employees for activities that are not Federally funded.
B. Fringe Benefits
1. Fringe benefits are allowances and services provided by employers to their employees
as compensation in addition to regular salaries and wages. (See 2 CFR 200.431)
a. Fringe benefit costs 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 applicant consistently applied to activities that are
Federally funded and those that are not.
b. Fringe benefits include, but are not limited to, the cost of leave, employee
insurance, pensions and unemployment, cell phone allowances, holiday bonuses,
and similar benefits.
2 The term "FTE" refers to one employee working full time for a year. For employees working a 40-hour work
week, one FTE equals 2080 hours.
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2. The budget narrative (or similar document explaining the composition of the budget)
should identify the recipient's fringe benefit rate and its composition. The applicant
should identify the types and amounts of proposed fringe benefit costs. Fringe benefits
may be expressed in terms of a percentage of salaries but must be allocable to the
agreement based on the amount of time the employee devotes to work that benefits the
EPA assisted project.
a. Applicants should not combine the fringe benefit costs with direct salaries and
wages in the personnel category. EPA may request a breakout of the fringe benefit
costs.
b. In instances where the applicant does not specify a percentage or amount for
fringe benefits, EPA may verify that the recipient does not intend to charge any
fringe benefit costs to the agreement.
3. If the applicant does not have a fringe benefit rate but intends to charge the EPA
agreement for fringe benefits, the applicant should provide an estimate based upon the
most recent actual fringe benefit costs. The budget detail narrative should provide an
explanation of the basis for the estimate and show the calculations.
a. The actual fringe benefit costs must be allocable to the agreement based on the
amount of time the employee devotes to work that benefits the EPA assisted
project.
b. Unless the employee is working 100% of his or her time on the EPA funded
project, the actual fringe benefit costs must be allocated to the EPA agreement in
a manner that takes into account other activities the employee performs that must
bear a proportional share of the fringe benefit costs. For example, if the recipient
employee works 6 hours on the EPA funded project one week of an 80 hour pay
period and 10 hours the other week of the pay period 20% of the fringe benefits
the employee earned during the pay period may be charged to the EPA agreement.
4. EPA may question and require justification for fringe benefit rates that seem unusually
high based on information from other similarly situated recipients. If so, EPA may ask
the applicant to demonstrate that the composition of fringe benefits includes only
allowable costs under 2 CFR 200.431 and are properly allocable to the EPA funded
program or project. For example, costs for providing an automobile to an executive are
unallowable to the extent that the costs include home to work transportation and other
personal uses as provided by 2 CFR 200.431(f).
a. If not otherwise available in the budget narrative, EPA may request that
applicants identify the types of fringe benefits that are included in the fringe
benefit rate.
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b. EPA will determine whether leave is included in the fringe benefit rate or the
applicant has a system for properly allocating leave costs.
(1) In the absence of a rate that covers leave costs the GS may ask the
applicant whether and how it intends to charge the costs of leave to the
agreement, especially for staff that work less than full-time on any one
agreement. As required by 2 CFR 200.431(b)(2) the applicant must
equitably distribute leave across all related activities including Federal
awards over the course of the full year.
(2) EPA assistance agreements should only bear the costs of leave in
proportion to the employees' work on the agreements. The recipient may
charge the agreement for 100% of the leave only for employees who work
full-time on that agreement for a full year. It may charge 100% of the
leave earned while working on the EPA agreement for employees who
work 100% of the time on that agreement, regardless of how long the
employee works on it. For example, if an employee earns 8 hours of leave
for each pay period and works 26 pay periods in a year, he/she will accrue
208 hours for a full year. If he/she works 100% of the time on a single
EPA agreement for a full year, then the organization could charge that
agreement for all 208 hours. However, if the employee worked 100% on
the agreement for less than a full year, but used 208 hours of leave during
this time, not all of it would be allocable to the EPA grant. Only the hours
accrued while working on the grant would be allowable.
Similarly, the recipient would allocate leave charges for employees who
do not work full-time on the agreement under a formula that considers the
extent to which the employee performs work on the agreement as well as
other activities.
III. Travel
A. Trips Covered by Travel Category
1. As provided under 2 CFR 200.474. costs classified as "travel" must be for recipient
employees for trips that are necessary to perform the EPA agreement. Travel should be
integral to the purpose of the proposed project (e.g., inspections) or related to project
activities (e.g., attendance at meetings pertaining to the activities EPA is funding or
training courses necessary for employees to effectively carry out the assistance
agreement).
2. Travel for trainees and other program participants such as interns, fellows, and work
group members who are not employees of the recipient are not travel costs for the
purposes of the SF-424A budget form. They are participant support costs under 2 CFR
200.75 and 2 CFR 200.456 and should be included in the "Other" budget category.
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3. Costs for transportation services (e.g. a bus and driver) for local or long-distance travel
are classified as contractual.
4. Costs for renting vans for local transportation (i.e. the employee renting the van is not
in travel status) without the services of a driver should be classified as "Other" for
consistency with the treatment of leases.
B. Travel Budget Narrative
1. If known, applicants should provide a narrative description of the types/purposes of
travel, estimated number of trips, planned destinations, estimated number of travelers,
and estimated per trip costs for travel to training, meetings, and conferences.
Note: Ongoing routine travel for site visits/inspections and similar activities and local
travel may be combined into a single amount.
2. As provided at 2 CFR 200.474(b) and 2 CFR 200.403(a). the amount and type of
travel the applicant includes in the budget for the EPA agreement must be necessary and
reasonable to effectively carry out the project.
3. Travel costs for executives (e.g. Governors, Mayors, elected Tribal Leaders) and
legislators (including Tribal Council members) are allowable with prior EPA approval if
the travel is specifically related to performing an EPA funded project or program.
4. Under 2 CFR 200.475 travel costs for Trustees, Directors, and similar officials with
nonprofits or IHE are allowable as a direct cost only if the travel costs are allocable to an
EPA award and not included in the recipient's indirect cost pool.
5. The terms of EPA financial assistance agreements require that EPA approve the use of
agency funds for international travel. Foreign travel includes trips to Mexico and Canada,
but does not include trips to Puerto Rico, the U.S. Territories or possessions.3 This
approval is typically provided prior to award Applicants that routinely travel to Mexico
and Canada by motor vehicle (e.g. for sampling or meetings) may describe their travel in
general terms in their work plan or budget narrative. If the recipient has not identified all
trips EPA will fund at time of award or indicates that there will be no international travel
by employees, EPA's General Terms and Conditions require the recipient to obtain EPA
approval for international travel through their Project Officer.
3 U.S. territories are islands under the jurisdiction of the United States which are not States of the United States. U.S.
possessions can be divided into two groups:
1. Those that have their own governments and their own tax systems (Puerto Rico, U.S. Virgin Islands, Guam,
American Samoa, and The Commonwealth of the Northern Mariana Islands), and
2. Those that do not have their own governments and their own tax systems (Midway Island, Wake Island,
Palmyra Island, Howland Island, Johnston Island, Baker Island, Kingman Reef, Jarvis Island, and other
U.S. islands, cays, and reefs that are not part of any of the fifty states).
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C. Allowable Travel Costs
1. Travel costs include payment or reimbursement of recipient employees' costs for
common carrier transportation fares, lodging, per diem (subsistence), rental vehicles,
taxes, internet access charges, phone calls, and similar personal expenses allowed under
the recipients travel policies that apply to Federal and non-Federally funded activities.
2. Under 2 CFR 200.474(d) allowable travel costs may not exceed the rates and amounts
for Federal travel unless the recipient's cognizant Federal audit agency (or EPA if
requested by the recipient to do so) has accepted a travel policy that provides differently.
Federal lodging and per diem rates are available at
http://www.gsa.gov/portal/content/104877.
2. The costs of first class and business class transportation are generally not allowable. If
an applicant intends to use EPA funds for first class or business class transportation the
requirements at 2 CFR 200.474(e) must be met.
IV. Equipment
A. Definition of Equipment
1. Equipment is defined as tangible, non-expendable, personal property having a useful
life of more than one year and an acquisition cost of $5,000 or more per unit, although
applicants may establish a lower dollar threshold or different definition of equipment
through their own written property management policies as long as the thresholds and
definitions are consistent with 2 CFR 200.33 and 2 CFR 200.94. The applicant's lower
threshold or different definition is binding.
2. This category includes only equipment the applicant proposes to purchase as a direct
cost. Costs for equipment rentals are classified as "Other".
3. Equipment also includes accessories and services included with the purchase price
necessary for the equipment to be operational. It does not include separate equipment
service or maintenance contracts (not included in the purchase price) which should be in
the contractual category.
4. When an applicant intends to purchase a base component that costs less than $5,000
(or the applicant's equipment price threshold) and related modifications, attachments,
accessories, or auxiliary apparatus are necessary to make the asset usable for the purpose
for which it will be acquired, the cost of all components is cumulative in determining
whether it is considered equipment. If the net invoice price of all related items equals or
exceeds $5,000 or the applicant's equipment price threshold, EPA considers the asset to
be equipment rather than supplies based on the definition of "Acquisition cost" at 2 CFR
200.2.
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The combined costs should be categorized as equipment for budgeting, inventory and
disposition purposes. These determinations require case by case judgments based on the
intended use of the equipment and whether the attachments, accessories, or auxiliary
apparatus are components of the asset rather than intended as stand-alone devices. The
timing of the purchases is also important.
Note that 2 CFR 200.2. provides that "[AJncillary charges, such as taxes, duty, protective
in transit insurance, freight, and installation may be included in or excluded from the
acquisition cost in accordance with the non-Federal entity's regular accounting practices."
B. Prior EPA Approval for Equipment Purchases
1. Pursuant to 2 CFR 200.439(b)(2). applicants must have prior EPA approval for
equipment purchases.
2. Applicants' budget narratives should include an itemized listing of all equipment
proposed under the agreement and explain why purchasing that equipment is necessary
for the project. Applicants should not specify particular brands of equipment since these
items generally must be procured competitively but should describe the type of
equipment they intend to purchase with EPA funds in order to obtain EPA approval.
Applicants should refer to section IV. D. below for guidance on procuring equipment.
3. If the applicant cannot provide an itemized equipment list at the time of award, then
EPA will include a programmatic term and condition requiring post-award EPA approval
of equipment purchases. The budget may need to be revised based on the final itemized
list of equipment.
4. If the applicant's itemized list of equipment identifies items with unit costs of less
than $5,000, EPA may ask the applicant whether its property management policies
stipulate such a lower threshold for equipment unless that matter has previously been
discussed with the applicant or otherwise provided in the budget detail narrative.
5. EPA approval is not required for purchases of equipment manufactured in foreign
countries. Some EPA financial assistance programs may be subject to Buy American
requirements.
C. Allowability of Equipment Costs
1. In reviewing applicants' proposed budgets, EPA staff will pay particular attention to
certain items such as automobiles and scientific devices that have useful lives beyond the
project period. CEPs are an example of a situation in which there may be an ongoing
need for equipment after the project period ends.
2. Short-term rental of such equipment may be more economical depending on the nature
of the project and the extent of EPA's funding relationship with the applicant. For
example, if the applicant will use purchased equipment on other Federally funded
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projects, then purchasing the equipment may be appropriate provided the costs of the
equipment are properly allocated. Equipment rental costs are classified as "Other".
3. Contingency reserves for equipment associated with a major information technology
infrastructure project or similar activities are allowable to the extent permitted by 2 CFR
200.433 and should be included as a separate line item in the Equipment category.
D. Procedures for Purchases of Equipment
Applicants may specify brand names and prices in proposed budgets if the amount of the
equipment purchase is less than the 2 CFR 200.67 micro-purchase threshold and the applicant
complies with the price reasonableness and equitable distribution of purchases requirements of 2
CFR 200.320(a). or the applicant complies with competitive procurement requirements.
1. EPA accepts internet or email price comparisons from at least three vendors as
compliant with competitive procurement requirements if the purchase price is less than
the 2 CFR 200.88 simplified acquisition threshold. Additional guidance on procurement
is available and in the Section VI. C. of the Contractual Category of this Cost Review
Guidance and in EPA's Best Practice Guide for Procuring Services. Supplies, and
Equipment Under EPA Assistance Agreements
2. EPA rarely accepts sole source justifications for equipment purchases when items are
available in the commercial market-place. An example of an acceptable sole source
equipment justification under 2 CFR 200.320(f)(1) or (f)(3) is when the applicant's
project requires the use of a specific device that is patented and available from only one
vendor. The justification must adequately explain why there are no similar devices
available that meet the applicant's requirements.
3. Applicants should provide sufficient information in the budget narrative for EPA to
determine whether competitive procurement requirements have been met prior to award.
Otherwise, the applicant should not specify a brand name and indicate that it will comply
with the 2 CFR Part 200 Procurement Standards when acquiring equipment after award.
V. Supplies
A. Definition of Supplies
1. Supplies are tangible personal property other than equipment with a per item
acquisition cost of less than $5,000 as provided at 2 CFR 200.94. unless the recipient's
written property management policies are based on a lower dollar threshold for
classification of supplies.
2. Electronic devices including laptops, personal computers, tablets, and cell phones with
a per item acquisition cost of less than $5,000 may be classified as supplies unless the
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recipient's property management systems classify these items differently. Recipients
may define such items as equipment to ensure they are tracked in their inventory systems.
3. When an applicant intends to purchase a base component that costs less than $5,000
(or the applicant's equipment price threshold) and:
(a) related modifications, attachments, accessories, or auxiliary apparatus are
necessary to make the asset usable for the purpose for which it will be acquired,
and
(b) the net invoice price of all related items equals or exceeds $5,000 or the
applicant's equipment price threshold,
EPA considers the asset to be equipment rather than supplies based on the
definition of "Acquisition cost" at 2 CFR 200.2. The combined costs should be
categorized as equipment for budgeting, inventory and disposition purposes.
Refer to section IV for additional guidance.
Note that 2 CFR 200.2. provides that "[AJncillary charges, such as taxes, duty,
protective in transit insurance, freight, and installation may be included in or
excluded from the acquisition cost in accordance with the non-Federal entity's
regular accounting practices."
B. Supplies Budget Narrative
1. The applicant's budget narrative should include a brief explanation of why the
supplies proposed for purchase are necessary for the project.
2. Costs should be categorized by major supply categories (e.g. office supplies,
computing devices, monitoring equipment) and include the estimated costs by category.
3. Any single item valued at $5,000 or more in this category should be moved to the
"Equipment" category. Services associated with supplies, such as rental costs for
computing devices, should be included in the "Other" category.
C. Procedures for Purchase of Supplies
1. EPA may inquire about the procedures an applicant will use to acquire supplies.
2. In many cases applicants will be able to purchase supplies without competition under
2 CFR 200.320(a) micro-purchase procedures. Additional information regarding micro-
purchase procedures and adjustments to the threshold is available in Section VI. C.
below and EPA's Best Practice Guide for Procuring Services. Supplies, and Equipment
Under EPA Assistance Agreements
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VI. Contracts
Note: Detailed guidance on compliance with the 2 CFR Part 200 Procurement Standards
under EPA assistance agreements is available at https://www.epa.gov/grants/best-
practice-guide-procuring-services-supplies-and-equipment-under-epa-assistance-
agreements.
A. General
1. Recipients use procurement contracts to acquire property (including intellectual
property such as software licenses) and services needed to carry out the EPA funded
project or program.
2. The descriptions of contracting procedures in this Cost Review Guidance are based on
the UGG. However, some EPA regulations establish unique contracting requirements
which apply to certain programs. These regulations include those for Superfund
Technical Assistance Grants (TAG) (40 CFR Part 35. Subpart M) and Superfund
Cooperative Agreements (40 CFR Part 35. Subpart O).
a. TAG recipients should consult "Procuring a Technical Advisor or Other
Contractor With TAG Funds."
b. Superfund Cooperative Agreement recipients should consult "Procurement
Requirements Under a Cooperative Agreement."
3. Contractual services (including those provided by consultants) are those services to be
provided by an individual or organization, other than the recipient's own employees, that
establish a contractual relationship as described at 2 CFR 200.330(b) and Appendix A of
EPA's Subaward Policy.
4. Transactions between recipients and for-profit firms or individual consultants are in
almost all cases procurement contracts subject to the 2 CFR Part 200 Procurement
Standards (2 CFR 200.317 through 200.326) competition requirements rather than
subawards, which generally may be awarded without competition.
5. Speaker fees (including "honoraria" and travel expenses for non-employees), stand-
alone contracts for audio-visual services and costs for hiring transportation services
(vehicles and drivers) at conferences, meetings, workshops and similar events should be
classified as contractual. Facility rental costs are classified as "Other" and may include
audio-visual and catering services if these services are provided through the facility.
Personal vehicle rental costs for employees in travel status are typically considered travel
expenses.
6. The applicant's work plan and budget narrative should explain why contracting is
appropriate for the project.
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a. The applicant should list the proposed contract activities along with a brief
description of the scope of work or services to be provided, proposed duration,
and proposed procurement method (competitive or non-competitive) in its budget
narrative.
b. EPA does not require applicants to identify contractors (including consultants)
in the work plan, and the terms of EPA's competitive announcements warn
applicants not to do so unless they have already complied with the 2 CFR Part
200 Procurement Standards. Refer to the Sole Source Guidance in Subsection C.
3^ below for additional information.
c. Applicants will need to work with their POs to obtain EPA approval for service
contracts that will be performed in a foreign country.
7. Contingency reserves for contracting associated with a major information technology
infrastructure project or similar activity are allowable to the extent permitted by 2 CFR
200.433 and should be included as a separate line item in the Contractual category.
B. Special Contracting Situations
1. If the applicant hires individual consultants, the proposed rate of compensation may
not exceed the consultant cap (Level IV of the Executive Schedule) as described at 2
CFR 1500.9 and the most current Consultant Fee Term and Condition. The cap on
compensation for individual consultants is statutory, Public Law 111-8, it applies to all
recipients including states, and may not be waived by EPA. The cap is subject to revision
at the beginning of each calendar year when Office of Personnel Management (OPM)
changes the compensation for Level IV of the Executive Schedule.
a. The term "individual consultant" is defined in EPA's consultant fee policy
which is published at 69 Fed. Reg. 18380 (April 17. 2004). Essentially, an
individual consultant is not an employee of the recipient but provides personal
services to the recipient under contract and is subject to the recipient's selection,
direction, and control.
b. Contracts or subcontracts with multi-employee firms for services are not
affected by the compensation limitation in 2 CFR 1500.9(a). provided the
contractor or subcontractor rather than the applicant selects, directs and controls
individual employees providing consulting services.
c. If a consultant is paid on an hourly basis, EPA will not participate in more than
the hourly equivalent of the rate or participate in more than the maximum daily
rate if a consultant paid on an hourly basis works more than 8 hours in a day.
There is no maximum number of days for the purposes of the consultant fee cap.
However, if a consultant works less than 8 hours in a day, EPA will not
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participate in more than the hourly equivalent rate for each hour worked even if
the consultant is paid on a daily basis.
d. The consultant fee limitation does not apply to fixed priced or lump sum
contracts for specified products such as reports or delivery of a training course.
Costs for these services must meet regulatory standards for reasonableness.
2. As provided at 2 CFR 200.432. costs for meals and light refreshments for conferences
are allowable unless the terms of the EPA assistance agreement restrict allowability. The
regulation defines conference "... as a meeting, retreat, seminar, symposium, workshop or
event whose primary purpose is the dissemination of technical information beyond the
[recipient] and is necessary and reasonable for successful performance . . of the EPA
funded project. EPA assistance agreements have a general term and condition governing
the use of EPA funds to purchase meals and light refreshments at conferences.
a. Meals and light refreshments procured from caterers (separate from facility
rental charges) should be classified as contractual.
b. If not explicitly described in the scope of work that the Award Official
approves, recipients must obtain prior approval from EPA's Grant Management
Officer (GMO) for meals and light refreshments post-award in accordance with
the terms and conditions of the EPA agreement.4 In general, meals should only be
allowable during conferences when the work continues during the meals.
(1) Applicants may address questions about whether costs for light
refreshments, and meals for events are allowable to the EPA PO.
(2) The Agency Award Official or GMO will make final determinations
on allowability.
c. Costs for light refreshments and meals for applicants' staff meetings and
similar day-to-day activities are not allowable under EPA assistance agreements.
d. EPA funding for meals, light refreshments, and rental space may not be used
for any portion of an event (such as an after-hours reception, meal or meeting)
where alcohol is served, purchased, or otherwise available as part of the event or
meeting, even if EPA funds are not used to purchase the alcohol.
3. Costs for training courses for recipient employees (e.g. instructional services)
provided by third parties should be classified as contractual, although any travel costs for
the recipient's employees should be categorized as travel. Similarly, third party provided
training courses for program participants belong in the contractual category but the travel
4 Prior EPA approval for meals and light refreshments is not required for state CEP agreements to the extent
provided for in EPA's "Light Refreshments and/or Meals" General Term and Conditions.
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and or stipends for trainees should be 2 CFR 200.75 participant support costs and
classified as "Other".
4. Stand-alone equipment maintenance or service contracts (i.e. not included in the
purchase price for the equipment) are classified as contractual.
5. Acquisition of printing services for larger scale productions such as books, other
bound documents, and related graphics services should be classified as contractual.
However, amounts budgeted for document reproduction on an occasional "as needed"
basis from self-service photocopying firms should be classified as "Other".
6. Cost estimates for leased or rented items (equipment, office space) should be included
in the "Other" category.
C. Competition Requirements
One aspect of the Contract cost category that often leads to questions regarding regulatory
compliance by EPA staff as well as auditors relates to competition requirements. These
questions may arise prior to award if a recipient names a contractor in its proposal or otherwise
indicates that it does not intend to follow competitive procedures in selecting contractors.
1. States
a. As provided in 2 CFR 200.317. states follow the same policies and procedures
they follow for procurements financed with non-Federal funds. States are subject
to the requirement at 2 CFR 200.322 for procurement of recovered materials
"where the purchase price of the item exceeds $10,000 or the value of the quantity
acquired during the preceding fiscal year exceeded $10,000" per unit and any
contract clauses required by 2 CFR 200.326.
b. All recipients, including states, must comply with EPA's rules for
Disadvantaged Business Enterprises (DBE) at 40 CFR Part 33.
2. Other Recipients
a. Non-state recipients proposed contracts must comply with the 2 CFR Part 200
Procurement Standards (2 CFR 200.317 through 200.326). Additional information
regarding appropriate procurement procedures is available in EPA's Best Practice
Guide for Procuring Services. Supplies, and Equipment Under EPA Assistance
Agreements.
b. The UGG at 2 CFR 200.318(e) encourages recipients to use intergovernmental
or inter-entity agreements for efficient procurement of common goods and
services. For example:
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(1) A state may enter into one or more contracts with environmental
consultants that local governments may also use to acquire consulting
services.
(2) A county government may have a competitively awarded
architecture/engineering (A/E) contract that municipalities within the
county's jurisdiction may use to acquire A/E services.
(3) One or more IHEs or nonprofits may cooperate to conduct a
competition for professional services and award a single, multi-year
contract to the successful offeror.
3. Sole Source Guidance
a. If the applicant is not a State and proposes to award the contract without
competition (i.e., a "sole source"), it must comply with 2 CFR 200.320(f).
b. EPA does not require applicants to identify contractors in proposals or work
plans and EPA policy precludes agency staff from suggesting, recommending, or
directing recipients to hire particular firms or individuals. Applicants should not
ask EPA personnel for recommendations for potential contractors.
(1) The fact that an applicant has named a contractor in its proposal as a
"partner" or otherwise does not in and of itself justify a sole source award.
(2) When an applicant (other than a state) names a contractor (including a
consultant) in its proposed work plan, EPA may inquire whether the
applicant has complied with 2 CFR Part 200 Procurement Standards (2
CFR 200.317 through 200.326). unless the applicant has already described
the process it followed to select the contractor.
c. As provided at 2 CFR 200.320(a). recipients may use micro-purchase
procedures to award contracts without competition as long as micro-purchases are
equitably distributed among qualified sources and the price is reasonable. The
micro-purchase threshold is currently set at $10,000 by statute and EPA Policy.5
Recipients with procurement procedures that establish lower thresholds for
competition must comply with their own procedures. Some IHEs, their related or
affiliated non-profit entities, non-profit research organizations or research
institutes may have micro-purchase thresholds higher than $10,000 with the
5 The Office of Management and Budget raised the threshold for micro-purchases from $3,500 to $10,000 on June
20, 2018 as provided for in the National Defense Authorization Acts (NDAA) for Fiscal Years 2017 and 2018. EPA
implemented the OMB direction in RAIN-2018-G04 Micro-Purchase and Simplified Acquisition Threshold for
Procurements by EPA Assistance Agreement Recipients and Subrecipients.
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approval of their cognizant agency for indirect cost rate negotiation.6 If the
recipient intends to enter a sole source contract in excess of the micro-purchase
threshold, the following information on EPA policies should be considered.
(1) Sole source contracts in excess of the micro-purchase threshold should
be rare as there are multiple sources for services (particularly consulting
services) and products in the commercial market-place. There is a
difference between "best" and "only" and sole source justifications based
on "unique qualifications" are not persuasive. Every firm or individual
consultant is unique.
(2) Potential justifications include 2 CFR 200.320(f)(1). only one source,
2 CFR 200.320(f)(2). an emergency, 2 CFR 200.320(f)(3) EPA approval,
or 2 CFR 200.320(f)(4) after soliciting a number of sources the recipient
reasonably decided competition was inadequate.
(3) EPA's position is that competition is required in accordance with the
UGG for commercially available items (including consulting services)
unless due to a patent, copyright, or equipment maintenance agreement
with the original manufacturer, or other similar reason the required service
or product is available from only one firm or there is an emergency (e.g. a
natural disaster) that precludes competitive bidding. A long-term
relationship with a potential source that is "unique" is not an acceptable
justification.
(4) Under 2 CFR 200.323(b). recipients must negotiate profit as a separate
element of cost for sole source procurements other than micro-purchases.
d. When EPA determines that a sole source contract is inappropriate, an EPA
Project Officer or Grant Specialist will inform the recipient. If the recipient still
believes that a sole source contract is warranted, it may submit a written request
(with appropriate justification) for EPA approval under 2 CFR 200.320(f)(3) to a
GMO. The GMO will inform the recipient of EPA's decision in writing.
e. For purchases that cost more than the micro-purchase threshold but less than
the 2 CFR 200.88 Simplified Acquisition Threshold (currently set at $250,000 by
statute as implemented by EPA Policy), recipients may use 2 CFR 200.320(b)
small purchase procedures and solicit offers from an adequate number of sources,
taking DBE considerations into account, without formally advertising or
otherwise publicizing the contracting opportunity.7
6 This practice is authorized by section 217(b) of the NDAA for Fiscal Year 2017 and is codified at 41 U.S.C.
1902(a)(2).
7
The Office of Management and Budget raised the Simplified Acquisition Threshold to $250,000 on June 20, 2018
as provided for in the NDAA for Fiscal Year 2018. EPA implemented the OMB direction in RAIN-2018-G04
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(1) EPA's position is that recipients must obtain documented prices or
quotes (e.g. by email or price list searches) from at least 3 three qualified
sources to meet this requirement although recipients may establish
procurement procedures that require solicitations from more sources.
(2) Recipients need not select the lowest priced item or service if it does
not meet requirements or the recipient can otherwise demonstrate that the
goods or services available at a higher price offer the best value.
Recipients must, however, justify a decision to purchase at the higher
price and ensure that the vendor charges similarly situated customers the
same price as it is offering to the recipient and document that decision in
the procurement file.
f. Procurements in excess of the Simplified Acquisition Threshold are subject to
the formal competitive requirements of 2 CFR 200.319 and 2 CFR 200.320(c) or
(dl
VII. Construction
A. General
1. EPA's Small and Disadvantaged Business rule at 40 CFR 33.103 defines
"construction" as " . . . erection, alteration, or repair (including dredging, excavating, and
painting) of buildings, structures, or other improvements to real property, and activities in
response to a release or a threat of a release of a hazardous substance into the
environment, or activities to prevent the introduction of a hazardous substance into a
water supply." Construction costs may include site preparation, demolishing and building
facilities, making permanent improvements to facilities or other real property, major
renovations of existing facilities, and related architectural or engineering services. There
are program specific EPA definitions of "construction" at 40 CFR 35.2005 (Clean Water
Act Construction Grants) and 42 U.S.C. 6903 (Solid Waste Disposal Act).
With very few exceptions, recipients carry out construction projects by hiring contractors
which typically include a general contractor and an A/E firm. Unless directed otherwise
by EPA's Project Officer, applicants should classify construction costs as "contractual"
for programs and projects covered by this guidance with the exception of "force account"
costs relating to compensation of the recipients' own employees. Force account costs
should be classified as personnel and fringe benefits.
Micro-Purchase and Simplified Acquisition Threshold for Procurements by EPA Assistance Agreement Recipients
and Subrecipients.
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2. The applicant should provide a list of planned construction contracts along with a brief
description of the scope of work or services to be provided, planned duration, and
planned procurement method (competitive or non-competitive), if known. Applicants
should consult the guidance on contracting in Section VI for additional information. The
cost plus percentage of construction cost method of contracting is prohibited by 2 CFR
200.323(d).
B. Eligible Construction Costs
1. Construction excludes the cost of land acquisition and off-site improvements unless
authorized by statute. Land acquisition costs should be classified as "Other" with a
separate line item in the budget narrative explaining the purpose of the acquisition.
2. With the exception of Superfund, CERCLA 104(k) Brownfields, and Clean Water Act
sections 319 and 320, construction costs are typically not eligible under project grants,
continuing environmental program grants, and other agreements covered by this cost
review guidance. Construction costs are only allowable under project grants if such costs
are integrally related to and necessary for an activity that is authorized in an EPA statute
such as a demonstration project. Unless program guidance expressly provides that
construction is an eligible cost, the applicant should consult with the PO to verify that
proposed construction costs are allowable and properly characterized.
C. Prevailing Wages
3. Davis Bacon (DB) prevailing wage requirements apply only when the statute
authorizing the EPA assistance program imposes DB. Superfund, Brownfields, the Clean
Water and Drinking Water State Revolving Loan Funds, Clean Water Act sections 319
and 320 (for construction of treatment works), are subject to DB. The Department of
Labor provides a definition of "construction" for DB purposes at 29 CFR 3 .2.
VIII. Other
A. General
This category must include only those types of direct costs that do not fit in any of the
specific budget categories. Examples of costs that may be in this category are:
1. Insurance and indemnification 2 CFR 200.447.
2. Telephone service and utilities.
3. Occasional document reproduction at local copying centers.
4. Capitalization funding for revolving loan programs.
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5. Third party in-kind contributions towards cost share 2 CFR 200.306.
6. Tuition remission and scholarships under agreements with educational institutions.
7. Transactions between recipients and Federal agencies.
8. Rental/lease of equipment, office space, and meeting or conference facilities
(additional guidance in Subsection C. below).
9. Participant support costs (additional guidance in Subsection D. below).
10. Subawards (additional guidance in Subsection E. below).
11. Land acquisition costs when authorized under the financial assistance program.
B. Special Considerations for Other Direct Costs
1. Applicants should ensure that budget narratives for the "Other" category include line
item amounts for all costs it characterizes as "Other" so that reviewing EPA staff are
aware of the items in the category.
2. Under 2 CFR 200.400(g) and EPA policy, any "management fees" or similar charges
that amount to a "profit" are unallowable since they are not costs directly related to
performing the project or approved by a cognizant Federal agency as indirect costs.
Applicants may not include such fees in the "Other" category.
3. Contingency reserves for major projects such as construction or information
technology infrastructure are addressed at 2 CFR 200.433.
C. Rental/Lease
1. The allowability of costs for renting equipment (including vehicles), office, laboratory
or conference/meeting space is governed by 2 CFR 200.465.
2. Rental costs for a recipient's "main office" are typically included in the indirect cost
pool.
a. Some organizations have central indirect rates that cover only the broader
organization and not specific divisions, satellite offices, or labs. In these
instances, and other situations when a recipient rents space for a discrete activity
necessary to carry out the assistance agreement, rental costs may be charged
directly provided the rates are reasonable and fully or partially allocable to the
agreement.
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b. In instances where the rental costs are only partially allocable to a particular
grant, the recipient should provide EPA with an allocation methodology to
distribute these costs among all appropriate funding sources.
3. Examples of situations in which rental costs may be fully allocable to an assistance
agreement include space rented for a conference, training course, community meeting, or
temporary use of a laboratory. Refer to 2 CFR 200.465(a) for additional guidance.
4. There are special rules when a recipient is directly charging rent for a facility or
equipment on a "sale and lease back" arrangement or that it owns or is owned by a
related party that is leased on a "less than arms-length" basis. The amount of rent that is
allowable is limited by 2 CFR 200.465(b) and (c). Applicants should consult with their
Project Officers and Grants Specialists if these situations arise.
5. Conference/meeting facility rental charges may include meals and light refreshments
per 2 CFR 200.432 as well as audio-visual services. Additional guidance on EPA's
policies for the use of financial assistance funds for meals and light refreshments is
available in Section VI. B. 2. a. through e. above. Recipients must compete requirements
for conference/meeting facilities when the amount of the charges are expected to exceed
the micro-purchase threshold. Refer to the guidance in the Competition Requirements in
the Contractual Category for additional information.
6. Leases and other rental agreements with costs that will be charged directly to the EPA
assistance agreement are generally subject to the competition requirements of 2 CFR
200.319 and 2 CFR 200.320. Two exceptions are when the amount of allowable rental
costs are governed by the "sale and lease back" or "less than arms-length" rules at 2 CFR
200.465(b) and (c).
D. Participant Support Costs
1. Participant support costs may include:
a. Stipends for interns, fellows, trainees, or attendees at community meetings who
are not employees of the applicant including registration fees, training materials
and travel costs when the purpose of the trip is to participate in the project
activity.
b. Travel assistance for state and tribal workgroup members who are not
employed by the applicant.
c. Rebates or other subsidies provided to program beneficiaries for:
(1) purchases of commercially available, standard ("off the shelf')
pollution control equipment or low emission vehicles under the Diesel
Emission Reduction Act program when the program participant, rather
than the recipient, owns the equipment;
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(2) Subsidies provided to program beneficiaries to encourage participation
in statutorily authorized programs to encourage environmental
stewardship (e.g. Best Management Practices under the Clean Water Act
section 319 Nonpoint Source programs;
(3) subsidies to promote adoption of source reduction practices by
businesses under section 6605 of the Pollution Prevention Act).
(4) rebates or subsidies for wood stove replacement under financial
assistance programs authorized by the Clean Air Act or EPA's annual
appropriation acts.
EPA's Interim Guidance on Participant Support Costs provides detailed
information regarding the standards for EPA approval of rebate and
subsidy programs.
d. Stipends and other incentives paid to participants in research experiments,
focus groups, surveys, or similar research activities.
e. other payments to or on behalf of Project/Program beneficiaries ("other
payments") that EPA determines to be statutorily authorized.
2. Participant support costs are governed by 2 CFR 200.75. EPA's Interim Guidance on
Participant Support Costs and supplemental EPA program office guidance (e.g. for the
Diesel Emission Reduction Act program). Applicants must obtain prior EPA approval
for participant support costs.
a. Participant support costs that recipients will pay directly should be included as
a separate line item in the applicant's budget narrative for the "Other" category to
obtain EPA approval prior to award. Section 7 of the Interim Guidance on
Participant Support Costs provides additional information regarding how to
budget for participant support costs paid by subrecipients and procurement
contractors.
b. Participant support costs are only allowable if EPA's Award Official approves
the applicant's description of the activities that will be supported and budget
narrative for participant support costs.
c. After EPA has made the award, if a recipient wants to include participant
support costs that were not previously included in their approved budget narrative,
they recipients may still obtain "prior" EPA approval for participant support costs
that were not included in the EPA approved budget narrative by submitting a
request to EPA's PO and GS. Under 2 CFR 200.308(c)(l)(v) recipients must
obtain prior EPA approval for post-award transfers of funds budgeted for
participant support costs to other direct cost categories. An EPA GMO or Award
Official will approve or deny the request to approve transfers in writing.
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d. As provided at 2 CFR 200.68 recipients must exclude participant support costs
from their Modified Total Direct Cost (MTDC) pool for the purposes of applying
indirect cost rates.
3. Applicants must specify the amount of travel assistance they intend to provide program
participants and explain the purpose of the trips the program participants will take.
a. If the applicant proposes international travel for program participants, it should
work with the PO to obtain EPA approval. Note that EPA's General Terms and
Conditions require recipients to obtain EPA approval for international travel that
is not specified in the EPA approved budget narrative for the assistance
agreement.
b. Applicants that routinely support program participant travel to Mexico and
Canada by motor vehicle (e.g. for training courses) may describe their travel in
general terms in the application. EPA may then approve the travel generally as
opposed to requiring approval on a trip-by-trip basis.
E. Subawards
1. Subawards (i.e. "Subgrants") are a distinct type of cost under the "Other" category and
are subject to stringent requirements in the UGG at 2 CFR 200.330 and 2 CFR 200.331 as
well as EPA's Subaward Policy. When a recipient makes subawards it becomes a "pass-
through entity" under 2 CFR 200.74. Pass-through entities must comply with EPA's
Subaward Policy as required by EPA's National Subawards Term and Condition which
is contained in all EPA awards.
a. As provided in 2 CFR 200.92 and 2 CFR 200.330(a). the term "subaward"
means an award of financial assistance (money or property) by a pass-through
entity (the recipient) to a subrecipient to carry out part of the EPA funded project
even if the recipient provides the assistance under an instrument they refer to as a
"contract."
b. The term "subaward" does not include:
(1) Technical assistance in the form of services instead of money or other
assistance in the form of revenue sharing or direct appropriations.
(2) Payments to program beneficiaries such as participant support costs.
(3) Transactions between recipients and Federal agencies.
c. Loans, loan guarantees, interest subsidies and similar assistance provided to
borrowers in EPA revolving loan fund capitalization grants are subawards for the
purposes of 2 CFR 200.303. Internal controls and 2 CFR 200.331. Requirements
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for pass-through entities and the 2 CFRPart 170. requirements for Reporting
Subaward and Executive Compensation Information. The extent to which these
requirements apply to EPA revolving loan programs is described in the terms and
conditions of the EPA assistance agreement or program guidance.
d. Procurement contracts as described at 2 CFR 200.22 are not subawards.
Differences between subrecipients and contractors are described in 2 CFR
200.330. EPA provides examples of transactions EPA considers to procurement
contracts as opposed to subawards in Appendix A of EPA's Subaward Policy.
(1) Transactions between recipients and for-profit firms or individual
consultants are in almost all cases procurement contracts subject to the
competition requirements in the 2 CFR Part 200 Procurement Standards (2
CFR 200.317 through 200.326) rather than subawards that generally may
be made without competition.
(2) EPA's Subaward Policy Frequent Questions provides additional
information about EPA's policies for determining whether transactions are
subawards, procurement contracts, or another type of transaction. For
example, the Frequent Questions address "partnership" arrangements in
detail to assist recipients in properly characterizing financial transactions
with project partners.
(3) Recipients should consult with POs and GSs initially if there are
questions regarding whether a particular transaction is a procurement
contract or a subaward.
2. Applicants must provide the aggregate amount they propose to allocate to subawards
as a separate line item in the "Other" category as required in Section 8.0(a) of EPA's
Subaward Policy.
3. If applicants erroneously place funding estimates for subawards in the "Contractual"
category, EPA will advise applicants to submit a revised budget. However, for state and
tribal continuing environmental program grants covered by 40 CFR Part 35. Subparts A
and B "pen and ink" changes to recipient budgets may be acceptable under EPA policy.
a. Pass-through entities must provide a description of the types of activities to be
supported with subawards in either the budget narrative or the scope of work to
comply with the prior approval provision of 2 CFR 200.308(c)(l)(vi).
b. EPA's Subaward Policy does not require that applicants identify subrecipients
or the amount of anticipated funding for specific subawards, although some
applicants do so voluntarily, particularly for competitive proposals.
c. Under 2 CFR 200.308(c)(l)Qi) recipients must obtain prior EPA approval for
subawards that are not described in the scope of work for the agreement and
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budgeted for in the aggregate line item in the recipient's budget narrative. EPA's
Subaward Policy Frequent Questions contains additional guidance on when EPA
approval is required for changes to a pass-through entity's subaward plans.
4. The National Subaward Term and Condition requires applicants to work with the PO
to obtain the written consent of EPA's Office of International and Tribal Affairs, prior to
awarding a subaward to a foreign government or international organization, or a
subaward that will be performed in a foreign country. This requirement applies even if
the applicant describes the subaward in a proposed scope of work.
5. As provided at 2 CFR 200.68. pass-through entities may only include up to the first
$25,000 of each subaward in the MTDC pool for the purposes of distributing indirect cost
rates. Some state, tribal, or local government pass-through entities may distribute
indirect costs to subawards differently if authorized by their cognizant Federal agency
under UGG Appendix VII. Section C. 3. e.
IX. Indirect Costs
A. Definitions
1. As provided at 2 CFR 200.56. Indirect costs (IDC) are costs incurred by the recipient
for a common or joint purpose that benefit more than one cost objective or project, and
are not readily assignable to specific cost objectives or projects as a direct cost.
2. Modified Total Direct Costs (MTDC) is defined at 2 CFR 200.68.
B. EPA IDC Policies
1. EPA's general IDC policy is posted at Indirect Cost Policy for Recipients of EPA
Assistance Agreements. Additional guidance documents are available in
Recipient/Applicant Information Notice 2018-G02. Indirect Cost Guidance for Recipients
of EPA Assistance Agreements.
2. In order for the assistance agreement recipient to use EPA funding for indirect costs,
the applicant's approved budget derived from the budget table on the SF-424A must
include an amount for IDCs and at least one of the following must apply:
a. With the exception of "exempt" agencies and IHEs as noted below, all
applicants must have one of the following current (not expired) IDC rates,
including IDC rates that have been extended by the cognizant agency:
(1) Provisional;
(2) Final;
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(3) Fixed rate with carry-forward;
(4) Predetermined;
(5) 10% de minimis rate authorized by 2 CFR 200.414(f); or,
(6) EPA-approved use of one of the following on an exception basis for
EPA agreements:
- 10% de minimis as detailed in section 6.3 of the IDC Policy; or
- Expired fixed rate with carry-forward as detailed in section 6.4.a.
of the Indirect Cost Policy for Recipients of EPA Assistance
Agreements.
Procedures for requesting exceptions from EPA are available in Indirect Cost
Guidance for Recipients of EPA Assistance Agreements.
b. "Exempt" state or local governmental departments or agencies are agencies
that receive up to and including $35,000,000 in Federal funding per the
department or agency's fiscal year, and must have an IDC rate proposal
developed in accordance with 2 CFR 200 Appendix VII. with documentation
maintained and available for audit.
c. IHEs must use the IDC rate in place at the time of award for the life of the
assistance agreement (unless the rate was provisional at time of award, in which
case the rate will change once it becomes final). As provided by 2 CFR Part 200.
Appendix 111(C)(7). the term "life of the assistance agreement", means each
competitive segment of the project. Additional information is available in the
regulation.
3. IDCs incurred during any period of the assistance agreement that are not covered by
the provisions above are not allowable costs and must not be drawn down. Applicants
may budget for IDCs pending approval of their IDC rate by the cognizant Federal agency
or an exception granted by EPA under section 6.3 or 6.4 of Indirect Cost Policy for
Recipients of EPA Assistance Agreements. However, after EPA awards the assistance
agreement recipients may not draw down IDCs until their rate is approved or EPA issues
an exception.
C. Distribution of IDC Charges
1. Most non-profit applicants and IHEs distribute their indirect cost rates to MTDC as
provided in UGG Appendix III. Section C. 2. and Appendix IV. Section B. 2. c. State,
tribal and local government applicants including some interstate organizations do not
necessarily use MTDC as the basis for distributing indirect costs. As provided in UGG
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Appendix VII. Section C.. the IDC rate agreement with the cognizant Federal agency
may provide for other distribution bases for governmental applicants.
2. As provided at 2 CFR 200.68. the MTDC includes only the first $25,000 of each
subaward. Procurement contracts are not covered by this restriction. MTDC does not
include participant support costs, tuition remission, scholarships and fellowships.
Therefore, these costs must be excluded from MTDC when distributing indirect costs.
3. Examples of IDC Rate base distribution calculations are shown below:
a. Personnel Salaries (Indirect Rate x Personnel = IDC)
b. Personnel Salaries and Fringe (Indirect Rate x Personnel & Fringe = IDC)
c. Modified Total Direct Costs (Indirect Rate x MTDC = IDC)
4. Unless the applicant's rate agreement expressly authorizes distribution of indirect
costs to total direct costs, this form of rate distribution is not allowable. Authorizations to
distribute IDC to total direct charges are very rare.
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Appendix 1 - Document Acronyms
A/E - Architecture/Engineering
CERCLA - Comprehensive Environmental Response Compensation and Liability Act
CEP - Continuing Environmental Program Grant
CFR - Code of Federal Regulations
DB - Davis Bacon
DBE - Disadvantaged Business Enterprise
EPA - Environmental Protection Agency
FAR - Federal Acquisition Regulations
FTE - Full Time Equivalent
GMO - Grant Management Officer
GS - Grant Specialist
GSA - General Services Administration
IDC - Indirect Costs
IHE - Institution of Higher Education
MTDC - Modified Total Direct Cost
OGD - Office of Grants and Debarment (EPA)
OPM - Office of Personnel Management
PI - Program Income
PO - Project Officer
SF - Standard Form
UGG - Uniform Grant Guidance (aka 2 CFR Part 200)
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Appendix 2 - Sample Budget Detail/Narrative
*Please note - Both federal and non-federal funds must be listed in the budget detail/narrative*
Background. This fictitious sample budget detail/narrative is based on a hypothetical EPA assistance
agreement supporting an Urban Waters project that involves water quality sampling, analysis of the
results, and outreach to the community to encourage efforts to improve water quality. The agreement
requires a recipient cost share of 10% of total project costs.
Notes:
- The applicant should identify its equipment cost threshold if it is lower than the $5,000 level specified
at 2 CFR 200.33.
- The sample calls for the applicant to attach its negotiated indirect cost rate agreement. If an applicant
does not have an indirect cost rate it should attach an explanation of how indirect costs, if any, are
determined in accordance with the budget guidance. For more information about indirect costs, refer to
indirect cost policy, guidance, and training in RAIN-2018-G02.
Budget Detail/Narrative Sample:
Personnel:
Requested from
EPA
Cost Share
provided by
applicant
(if applicable)
Total
Salaries and Wages
(1) Project Manager
@ $47/hr x 323 hours
$15,181
$15,181
(1) Project Assistant @ $24/hr x 200 hours
$4,800
$4,800
(1) Community Relations Coordinator @ $23/hr
x 150 hours
$3,450
$3,450
Total
$18,631
$ 4,800
$23,431
Fringe Benefits:
Rate/Base/Composition
Requested from
EPA
Cost Share
provided by
applicant
(if applicable)
Total
31% of Personnel costs (FICA, retirement, health,
vacation, sick leave)
$5,776
$1,488
$7,264
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Travel:
See Narrative Note 1.
Requested from
EPA
Cost Share
provided by
applicant
(if applicable)
Total
2 National Conferences including lodging, air,
per-diem and registration fees for 2 employees.
(See Narrative Note 2.)
$4,492
$4,492
Local travel for sampling and meetings. (P.O. V.
@ $0.58 per mile and actual cost for public
transit)
$150
$150
Travel to one-week training course on innovative
sampling techniques including lodging, train and
per-diem for 1 employee. (See Narrative Note 3.)
$2,500
$2,500
Total
$7,142
$7,142
Equipment: (Equi
jment Capitalization Threshold = $5,000)
Description
Purpose
Unit Cost
Quantity
Requested
from EPA
Cost Share
provided
by
applicant
(if
applicable)
Total
Microwave
Digester
Lab
Analysis
$17,500
1
$17,500
$17,500
12 Foot Motorized
Skiff and trailer.
(See Narrative
Note 4.)
Sampling
1
$6,000
$6,000
Total
$23,500
$23,500
Supplies
Type
Requested from
EPA
Cost Share
provided by
applicant
(if applicable)
Total
Computer Software
$2,500
$2,500
Office Supplies (pens, pencils, paper, chairs,
etc.)
$825
$825
2 Lap Top Computers @ $2000 each.
$4,000
$4,000
Total
$7,325
$7,325
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Contractual
Contractual *
(competitive process will be used to determine
contractors when required by regulation)
Requested from
EPA
Cost Share
provided by
applicant
(if applicable)
Total
Advertising for public meetings (Newspapers)
$1,000
$1,000
Environmental Sampling Firm to design
sampling protocol and assist with data
evaluation.
$120,000
$20,000
$140,000
Community Meeting Facilitator - $524/ day x
30 days (rate complies with limitation on
individual consultant fees)
$15,720
$15,720
Total
$136,720
$20,000
$156,720
Other
Type
Requested from
EPA
Cost Share
provided by
applicant
(if applicable)
Total
Postage for Flyers for Community meetings.
$611
$611
Subaward to Friends of the Wolf River (See
Narrative Note 5)
$30,000
$30,000
Travel to National Conference for 4 Community
Members (See Narrative Note 6)
$9,000
$1,000
$10,000
Printing Costs (Occasional use of large copiers
at Office Depot).
$1,200
$1,200
Total
$39,000
$2,811
$41,811
Indirect Costs:
Base (See Narrative Note 7)
Requested from
EPA
Cost Share
provided by
applicant
(if applicable)
Total
26% of Personnel and Fringe Benefits and first
$25,000 of Subaward Costs
$14,480
$14,480
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Total Budget Summary
Requested from
EPA
Cost Share provided
by applicant
(if applicable)
Total
Personnel
$18,631
$ 4,800
$23,431
Fringe Benefits
$5,776
$1,488
$7,264
Travel
$7,142
$7,142
Equipment
$23,500
$23,500
Supplies
$7,325
$7,325
Contractual
$136,720
$20,000
$156,720
Other
$39,000
$2,811
$41,811
Indirect Costs
$14,480
$14,480
Total
$252,574
$29,099
$281,673
Recipient cost share calculation: $29,099 / $281,673 = 10.33%
Narrative Note 1. There is no international travel for this project.
Narrative Note 2. The Project Manager and Community Relations Coordinator will make presentations
on interim and final project results at the 2019 and 2020 National Urban Waters conferences. Travel
reimbursement will be based on GSA per-diem rates.
Narrative Note 3. The Program Assistant will attend a one-week training on innovative sampling
techniques at Tulane University.
Narrative Note 4. Our equipment threshold is $5,000. We have determined based on the frequency and
timing of the sampling activity that purchasing a small motorized skiff and a trailer is more cost
effective than boat rentals. Additionally, some sampling will take place in remote areas in which boat
rentals are not available.
Narrative Note 5. We will partner with Friends of the Wolf River to encourage community participation
in the project. Friends is a 501(c)(3) nonprofit organization that promotes conservation of the Wolf
River. Among other things, Friends will pay stipends and travel support to community members who
attend focus groups and participate in training to prevent disposal of cooking grease in household drains.
Friends of Wolf River understands that the stipends and participant travel are Participant Support costs
that are excluded from its Modified Total Direct Cost base for distributing indirect costs.
Narrative Note 6. Four community members will attend the 2019 and 2020 National Urban Waters
conferences (two at each conference) to participate in our presentations.
Narrative Note 7. We have attached our most recent negotiated indirect cost rate agreement.
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