E.o. 11541

Office of Management and Budget

THE WHITE HOUSE

OMB Circular A-110

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CIRCULAR A-110
(REVISED 11/19/93, As Further Amended 9/30/99)
CIRCULAR NO. A-110
Revised
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT: Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher
Education, Hospitals, and Other Non-Profit Organizations
1. Purpose. This Circular sets forth standards for obtaining consistency and uniformity among Federal
agencies in the administration of grants to and agreements with institutions of higher education, hospitals,
and other non-profit organizations.
2. Authority. Circular A-110 is issued under the authority of 31 U.S.C. 503 (the Chief Financial Officers
Act), 31 U.S.C. 1111, 41 U.S.C. 405 (the Office of Federal Procurement Policy Act), Reorganization Plan
No. 2 of 1970, and E.O. 11541 ("Prescribing the Duties of the Office of Management and Budget and the
Domestic Policy Council in the Executive Office of the President").
3. Policy. Except as provided herein, the standards set forth in this Circular are applicable to all Federal
agencies. If any statute specifically prescribes policies or specific requirements that differ from the standards
provided herein, the provisions of the statute shall govern.
The provisions of the sections of this Circular shall be applied by Federal agencies to recipients. Recipients
shall apply the provisions of this Circular to subrecipients performing substantive work under grants and
agreements that are passed through or awarded by the primary recipient, if such subrecipients are
organizations described in paragraph 1.
This Circular does not apply to grants, contracts, or other agreements between the Federal Government and
units of State or local governments covered by OMB Circular A-102, "Grants and Cooperative Agreements
with State and Local Governments," and the Federal agencies' grants management common rule which
standardized and codified the administrative requirements Federal agencies impose on State and local
grantees. In addition, subawards and contracts to State or local governments are not covered by this Circular.
However, this Circular applies to subawards made by State and local governments to organizations covered
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by this Circular. Federal agencies may apply the provisions of this Circular to commercial organizations,
foreign governments, organizations under the jurisdiction of foreign governments, and international
organizations.
4. Definitions. Definitions of key terms used in this Circular are contained in Section ___.2 in the
Attachment.
5. Required Action. The specific requirements and responsibilities of Federal agencies and institutions of
higher education, hospitals, and other non-profit organizations are set forth in this Circular. Federal agencies
responsible for awarding and administering grants to and other agreements with organizations described in
paragraph 1 shall adopt the language in the Circular unless different provisions are required by Federal
statute or are approved by OMB.
6. OMB Responsibilities. OMB will review agency regulations and implementation of this Circular, and
will provide interpretations of policy requirements and assistance to insure effective and efficient
implementation. Any exceptions will be subject to approval by OMB, as indicated in Section ___.4 in the
Attachment. Exceptions will only be made in particular cases where adequate justification is presented.
7. Information Contact. Further information concerning this Circular may be obtained by contacting the
Office of Federal Financial Management, Office of Management and Budget, Washington, DC 20503,
telephone (202) 395-3993.
8. Termination Review Date. This Circular will have a policy review three years from date of issuance.
9. Effective Date. The standards set forth in this Circular which affect Federal agencies will be effective 30
days after publication of the final revision in the Federal Register. Those standards which Federal agencies
impose on grantees will be adopted by agencies in codified regulations within six months after publication in
the Federal Register. Earlier implementation is encouraged.
Attachment

Grants and Agreements with Institutions of Higher Education,
Hospitals, and Other Non-Profit Organizations
SUBPART A - GENERAL
Sec.
___.1 Purpose.
___.2 Definitions.
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___.3 Effect on other issuances.
___.4 Deviations.
___.5 Subawards.
SUBPART B - PRE-AWARD REQUIREMENTS
___.10 Purpose.
___.11 Pre-award policies.
___.12 Forms for applying for Federal assistance.
___.13 Debarment and suspension.
___.14 Special award conditions.
___.15 Metric system of measurement.
___.16 Resource Conservation and Recovery Act.
___.17 Certifications and representations.
SUBPART C - POST-AWARD REQUIREMENTS
Financial and Program Management
___.20 Purpose of financial and program management.
___.21 Standards for financial management systems.
___.22 Payment.
___.23 Cost sharing or matching.
___.24 Program income.
___.25 Revision of budget and program plans.

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___.26 Non-Federal audits.
___.27 Allowable costs.
___.28 Period of availability of funds.
___.29 Conditional exemptions.
Property Standards
___.30 Purpose of property standards.
___.31 Insurance coverage.
___.32 Real property.
___.33 Federally-owned and exempt property.
___.34 Equipment.
___.35 Supplies and other expendable property.
___.36 Intangible property.
___.37 Property trust relationship.
Procurement Standards
___.40 Purpose of procurement standards.
___.41 Recipient responsibilities.
___.42 Codes of conduct.
___.43 Competition.
___.44 Procurement procedures.
___.45 Cost and price analysis.

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___.46 Procurement records.
___.47 Contract administration.
___.48 Contract provisions.
Reports and Records
___.50 Purpose of reports and records.
___.51 Monitoring and reporting program performance.
___.52 Financial reporting.
___.53 Retention and access requirements for records.
Termination and Enforcement
___.60 Purpose of termination and enforcement.
___.61 Termination.
___.62 Enforcement.
SUBPART D - AFTER-THE-AWARD REQUIREMENTS
___.70 Purpose.
___.71 Closeout procedures.
___.72 Subsequent adjustments and continuing responsibilities.
___.73 Collection of amounts due.
APPENDIX A - CONTRACT PROVISIONS
*****
SUBPART A - General
___.1 Purpose. This Circular establishes uniform administrative requirements for Federal grants and
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agreements awarded to institutions of higher education, hospitals, and other non-profit organizations. Federal
awarding agencies shall not impose additional or inconsistent requirements, except as provided in Sections
___.4, and ___.14 or unless specifically required by Federal statute or executive order. Non-profit
organizations that implement Federal programs for the States are also subject to State requirements.
___.2 Definitions.
(a) Accrued expenditures means the charges incurred by the recipient during a given period
requiring the provision of funds for: (1) goods and other tangible property received; (2) services performed
by employees, contractors, subrecipients, and other payees; and, (3) other amounts becoming owed under
programs for which no current services or performance is required.
(b) Accrued income means the sum of: (1) earnings during a given period from (i) services
performed by the recipient, and (ii) goods and other tangible property delivered to purchasers, and (2)
amounts becoming owed to the recipient for which no current services or performance is required by the
recipient.
(c) Acquisition cost of equipment means the net invoice price of the equipment, including the cost
of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for
the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes,
duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in
accordance with the recipient's regular accounting practices.
(d) Advance means a payment made by Treasury check or other appropriate payment mechanism to a
recipient upon its request either before outlays are made by the recipient or through the use of predetermined
payment schedules.
(e) Award means financial assistance that provides support or stimulation to accomplish a public
purpose. Awards include grants and other agreements in the form of money or property in lieu of money, by
the Federal Government to an eligible recipient. The term does not include: technical assistance, which
provides services instead of money; other assistance in the form of loans, loan guarantees, interest subsidies,
or insurance; direct payments of any kind to individuals; and, contracts which are required to be entered into
and administered under procurement laws and regulations.
(f) Cash contributions means the recipient's cash outlay, including the outlay of money contributed
to the recipient by third parties.
(g) Closeout means the process by which a Federal awarding agency determines that all applicable
administrative actions and all required work of the award have been completed by the recipient and Federal
awarding agency.
(h) Contract means a procurement contract under an award or subaward, and a procurement
subcontract under a recipient's or subrecipient's contract.

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(i) Cost sharing or matching means that portion of project or program costs not borne by the Federal
Government.
(j) Date of completion means the date on which all work under an award is completed or the date on
the award document, or any supplement or amendment thereto, on which Federal sponsorship ends.
(k) Disallowed costs means those charges to an award that the Federal awarding agency determines
to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions
contained in the award.
(l) Equipment means tangible nonexpendable personal property including exempt property charged
directly to the award having a useful life of more than one year and an acquisition cost of $5000 or more per
unit. However, consistent with recipient policy, lower limits may be established.
(m) Excess property means property under the control of any Federal awarding agency that, as
determined by the head thereof, is no longer required for its needs or the discharge of its responsibilities.
(n) Exempt property means tangible personal property acquired in whole or in part with Federal
funds, where the Federal awarding agency has statutory authority to vest title in the recipient without further
obligation to the Federal Government. An example of exempt property authority is contained in the Federal
Grant and Cooperative Agreement Act (31 U.S.C. 6306), for property acquired under an award to conduct
basic or applied research by a non-profit institution of higher education or non-profit organization whose
principal purpose is conducting scientific research.
(o) Federal awarding agency means the Federal agency that provides an award to the recipient.
(p) Federal funds authorized means the total amount of Federal funds obligated by the Federal
Government for use by the recipient. This amount may include any authorized carryover of unobligated
funds from prior funding periods when permitted by agency regulations or agency implementing
instructions.
(q) Federal share of real property, equipment, or supplies means that percentage of the property's
acquisition costs and any improvement expenditures paid with Federal funds.
(r) Funding period means the period of time when Federal funding is available for obligation by the
recipient.
(s) Intangible property and debt instruments means, but is not limited to, trademarks, copyrights,
patents and patent applications and such property as loans, notes and other debt instruments, lease
agreements, stock and other instruments of property ownership, whether considered tangible or intangible.
(t) Obligations means the amounts of orders placed, contracts and grants awarded, services received
and similar transactions during a given period that require payment by the recipient during the same or a
future period.
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(u) Outlays or expenditures means charges made to the project or program. They may be reported
on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements
for direct charges for goods and services, the amount of indirect expense charged, the value of third party inkind contributions applied and the amount of cash advances and payments made to subrecipients. For reports
prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and
services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net
increase (or decrease) in the amounts owed by the recipient for goods and other property received, for
services performed by employees, contractors, subrecipients and other payees and other amounts becoming
owed under programs for which no current services or performance are required.
(v) Personal property means property of any kind except real property. It may be tangible, having
physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities.
(w) Prior approval means written approval by an authorized official evidencing prior consent.
(x) Program income means gross income earned by the recipient that is directly generated by a
supported activity or earned as a result of the award (see exclusions in paragraphs ___.24 (e) and (h)).
Program income includes, but is not limited to, income from fees for services performed, the use or rental of
real or personal property acquired under federally-funded projects, the sale of commodities or items
fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made
with award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise
provided in Federal awarding agency regulations or the terms and conditions of the award, program income
does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of
them.
(y) Project costs means all allowable costs, as set forth in the applicable Federal cost principles,
incurred by a recipient and the value of the contributions made by third parties in accomplishing the
objectives of the award during the project period.
(z) Project period means the period established in the award document during which Federal
sponsorship begins and ends.
(aa) Property means, unless otherwise stated, real property, equipment, intangible property and debt
instruments.
(bb) Real property means land, including land improvements, structures and appurtenances thereto,
but excludes movable machinery and equipment.
(cc) Recipient means an organization receiving financial assistance directly from Federal awarding
agencies to carry out a project or program. The term includes public and private institutions of higher
education, public and private hospitals, and other quasi-public and private non-profit organizations such as,
but not limited to, community action agencies, research institutes, educational associations, and health
centers. The term may include commercial organizations, foreign or international organizations (such as
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agencies of the United Nations) which are recipients, subrecipients, or contractors or subcontractors of
recipients or subrecipients at the discretion of the Federal awarding agency. The term does not include
government-owned contractor-operated facilities or research centers providing continued support for missionoriented, large-scale programs that are government-owned or controlled, or are designated as federallyfunded research and development centers.
(dd) Research and development means all research activities, both basic and applied, and all
development activities that are supported at universities, colleges, and other non-profit institutions.
"Research" is defined as a systematic study directed toward fuller scientific knowledge or understanding of
the subject studied. "Development" is the systematic use of knowledge and understanding gained from
research directed toward the production of useful materials, devices, systems, or methods, including design
and development of prototypes and processes. The term research also includes activities involving the
training of individuals in research techniques where such activities utilize the same facilities as other
research and development activities and where such activities are not included in the instruction function.
(ee) Small awards means a grant or cooperative agreement not exceeding the small purchase
threshold fixed at 41 U.S.C. 403(11) (currently $25,000).
(ff) Subaward means an award of financial assistance in the form of money, or property in lieu of
money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier
subrecipient. The term includes financial assistance when provided by any legal agreement, even if the
agreement is called a contract, but does not include procurement of goods and services nor does it include
any form of assistance which is excluded from the definition of "award" in paragraph (e).
(gg) Subrecipient means the legal entity to which a subaward is made and which is accountable to
the recipient for the use of the funds provided. The term may include foreign or international organizations
(such as agencies of the United Nations) at the discretion of the Federal awarding agency.
(hh) Supplies means all personal property excluding equipment, intangible property, and debt
instruments as defined in this section, and inventions of a contractor conceived or first actually reduced to
practice in the performance of work under a funding agreement ("subject inventions"), as defined in 37 CFR
part 401, "Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under
Government Grants, Contracts, and Cooperative Agreements."
(ii) Suspension means an action by a Federal awarding agency that temporarily withdraws Federal
sponsorship under an award, pending corrective action by the recipient or pending a decision to terminate the
award by the Federal awarding agency. Suspension of an award is a separate action from suspension under
Federal agency regulations implementing E.O.s 12549 and 12689, "Debarment and Suspension."
(jj) Termination means the cancellation of Federal sponsorship, in whole or in part, under an
agreement at any time prior to the date of completion.
(kk) Third party in-kind contributions means the value of non-cash contributions provided by nonFederal third parties. Third party in-kind contributions may be in the form of real property, equipment,
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supplies and other expendable property, and the value of goods and services directly benefiting and
specifically identifiable to the project or program.
(ll) Unliquidated obligations, for financial reports prepared on a cash basis, means the amount of
obligations incurred by the recipient that have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the recipient for which an outlay has not been
recorded.
(mm) Unobligated balance means the portion of the funds authorized by the Federal awarding
agency that has not been obligated by the recipient and is determined by deducting the cumulative
obligations from the cumulative funds authorized.
(nn) Unrecovered indirect cost means the difference between the amount awarded and the amount
which could have been awarded under the recipient's approved negotiated indirect cost rate.
(oo) Working capital advance means a procedure where by funds are advanced to the recipient to
cover its estimated disbursement needs for a given initial period.
___.3 Effect on other issuances. For awards subject to this Circular, all administrative requirements of
codified program regulations, program manuals, handbooks and other nonregulatory materials which are
inconsistent with the requirements of this Circular shall be superseded, except to the extent they are required
by statute, or authorized in accordance with the deviations provision in Section ___.4.
___.4 Deviations. The Office of Management and Budget (OMB) may grant exceptions for classes of grants
or recipients subject to the requirements of this Circular when exceptions are not prohibited by statute.
However, in the interest of maximum uniformity, exceptions from the requirements of this Circular shall be
permitted only in unusual circumstances. Federal awarding agencies may apply more restrictive
requirements to a class of recipients when approved by OMB. Federal awarding agencies may apply less
restrictive requirements when awarding small awards, except for those requirements which are statutory.
Exceptions on a case-by-case basis may also be made by Federal awarding agencies.
___.5 Subawards. Unless sections of this Circular specifically exclude subrecipients from coverage, the
provisions of this Circular shall be applied to subrecipients performing work under awards if such
subrecipients are institutions of higher education, hospitals or other non-profit organizations. State and local
government subrecipients are subject to the provisions of regulations implementing the grants management
common rule,"Uniform Administrative Requirements for Grants and Cooperative Agreements to State and
Local Governments," published at 53 FR 8034 (3/11/88).
SUBPART B - Pre-Award Requirements
___.10 Purpose. Sections ___.11 through ___.17 prescribes forms and instructions and other pre-award
matters to be used in applying for Federal awards.
___.11 Pre-award policies.
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(a) Use of Grants and Cooperative Agreements, and Contracts. In each instance, the Federal awarding
agency shall decide on the appropriate award instrument (i.e., grant, cooperative agreement, or contract). The
Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of grants, cooperative
agreements and contracts. A grant or cooperative agreement shall be used only when the principal purpose of
a transaction is to accomplish a public purpose of support or stimulation authorized by Federal statute. The
statutory criterion for choosing between grants and cooperative agreements is that for the latter, "substantial
involvement is expected between the executive agency and the State, local government, or other recipient
when carrying out the activity contemplated in the agreement." Contracts shall be used when the principal
purpose is acquisition of property or services for the direct benefit or use of the Federal Government.
(b) Public Notice and Priority Setting. Federal awarding agencies shall notify the public of its
intended funding priorities for discretionary grant programs, unless funding priorities are established by
Federal statute.
___.12 Forms for applying for Federal assistance.
(a) Federal awarding agencies shall comply with the applicable report clearance requirements of 5
CFR part 1320, "Controlling Paperwork Burdens on the Public," with regard to all forms used by the Federal
awarding agency in place of or as a supplement to the Standard Form 424 (SF-424) series.
(b) Applicants shall use the SF-424 series or those forms and instructions prescribed by the Federal
awarding agency.
(c) For Federal programs covered by E.O. 12372, "Intergovernmental Review of Federal Programs,"
the applicant shall complete the appropriate sections of the SF-424 (Application for Federal Assistance)
indicating whether the application was subject to review by the State Single Point of Contact (SPOC). The
name and address of the SPOC for a particular State can be obtained from the Federal awarding agency or
the Catalog of Federal Domestic Assistance. The SPOC shall advise the applicant whether the program for
which application is made has been selected by that State for review.
(d) Federal awarding agencies that do not use the SF-424 form should indicate whether the
application is subject to review by the State under E.O. 12372.
___.13 Debarment and suspension. Federal awarding agencies and recipients shall comply with the
nonprocurement debarment and suspension common rule implementing E.O.s 12549 and 12689,
"Debarment and Suspension." This common rule restricts subawards and contracts with certain parties that
are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance
programs or activities.
___.14 Special award conditions. If an applicant or recipient: (a) has a history of poor performance, (b) is not
financially stable, (c) has a management system that does not meet the standards prescribed in this Circular,
(d) has not conformed to the terms and conditions of a previous award, or (e) is not otherwise responsible,
Federal awarding agencies may impose additional requirements as needed, provided that such applicant or
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recipient is notified in writing as to: the nature of the additional requirements, the reason why the additional
requirements are being imposed, the nature of the corrective action needed, the time allowed for completing
the corrective actions, and the method for requesting reconsideration of the additional requirements imposed.
Any special conditions shall be promptly removed once the conditions that prompted them have been
corrected.
___.15 Metric system of measurement. The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric system is the preferred measurement system
for U.S. trade and commerce. The Act requires each Federal agency to establish a date or dates in
consultation with the Secretary of Commerce, when the metric system of measurement will be used in the
agency's procurements, grants, and other business-related activities. Metric implementation may take longer
where the use of the system is initially impractical or likely to cause significant inefficiencies in the
accomplishment of federally-funded activities. Federal awarding agencies shall follow the provisions of E.O.
12770, "Metric Usage in Federal Government Programs."
___.16 Resource Conservation and Recovery Act (RCRA) (Pub. L. 94-580 codified at 42 U.S.C. 6962).
Under the Act, any State agency or agency of a political subdivision of a State which is using appropriated
Federal funds must comply with Section 6002. Section 6002 requires that preference be given in
procurement programs to the purchase of specific products containing recycled materials identified in
guidelines developed by the Environmental Protection Agency (EPA) (40 CFR parts 247-254). Accordingly,
State and local institutions of higher education, hospitals, and non-profit organizations that receive direct
Federal awards or other Federal funds shall give preference in their procurement programs funded with
Federal funds to the purchase of recycled products pursuant to the EPA guidelines.
___.17 Certifications and representations. Unless prohibited by statute or codified regulation, each Federal
awarding agency is authorized and encouraged to allow recipients to submit certifications and
representations required by statute, executive order, or regulation on an annual basis, if the recipients have
ongoing and continuing relationships with the agency. Annual certifications and representations shall be
signed by responsible officials with the authority to ensure recipients' compliance with the pertinent
requirements.
SUBPART C - Post-Award Requirements
Financial and Program Management
___.20 Purpose of financial and program management. Sections ___.21 through ___.28 prescribe standards
for financial management systems, methods for making payments and rules for: satisfying cost sharing and
matching requirements, accounting for program income, budget revision approvals, making audits,
determining allowability of cost, and establishing fund availability.
___.21 Standards for financial management systems.
(a) Federal awarding agencies shall require recipients to relate financial data to performance data and
develop unit cost information whenever practical.
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(b) Recipients' financial management systems shall provide for the following.
(1) Accurate, current and complete disclosure of the financial results of each federallysponsored project or program in accordance with the reporting requirements set forth in Section
___.52. If a Federal awarding agency requires reporting on an accrual basis from a recipient that
maintains its records on other than an accrual basis, the recipient shall not be required to establish an
accrual accounting system. These recipients may develop such accrual data for its reports on the basis
of an analysis of the documentation on hand.
(2) Records that identify adequately the source and application of funds for federallysponsored activities. These records shall contain information pertaining to Federal awards,
authorizations, obligations, unobligated balances, assets, outlays, income and interest.
(3) Effective control over and accountability for all funds, property and other assets.
Recipients shall adequately safeguard all such assets and assure they are used solely for authorized
purposes.
(4) Comparison of outlays with budget amounts for each award. Whenever appropriate,
financial information should be related to performance and unit cost data.
(5) Written procedures to minimize the time elapsing between the transfer of funds to the
recipient from the U.S. Treasury and the issuance or redemption of checks, warrants or payments by
other means for program purposes by the recipient. To the extent that the provisions of the Cash
Management Improvement Act (CMIA) (Pub. L. 101-453) govern, payment methods of State
agencies, instrumentalities, and fiscal agents shall be consistent with CMIA Treasury-State
Agreements or the CMIA default procedures codified at 31 CFR part 205, "Withdrawal of Cash from
the Treasury for Advances under Federal Grant and Other Programs."
(6) Written procedures for determining the reasonableness, allocability and allowability of
costs in accordance with the provisions of the applicable Federal cost principles and the terms and
conditions of the award.
(7) Accounting records including cost accounting records that are supported by source
documentation.
(c) Where the Federal Government guarantees or insures the repayment of money borrowed by the
recipient, the Federal awarding agency, at its discretion, may require adequate bonding and insurance if the
bonding and insurance requirements of the recipient are not deemed adequate to protect the interest of the
Federal Government.
(d) The Federal awarding agency may require adequate fidelity bond coverage where the recipient
lacks sufficient coverage to protect the Federal Government's interest.

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(e) Where bonds are required in the situations described above, the bonds shall be obtained from
companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR part 223, "Surety
Companies Doing Business with the United States."
___.22 Payment.
(a) Payment methods shall minimize the time elapsing between the transfer of funds from the United
States Treasury and the issuance or redemption of checks, warrants, or payment by other means by the
recipients. Payment methods of State agencies or instrumentalities shall be consistent with Treasury-State
CMIA agreements or default procedures codified at 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they maintain or demonstrate the willingness to
maintain: (1) written procedures that minimize the time elapsing between the transfer of funds and
disbursement by the recipient, and (2) financial management systems that meet the standards for fund
control and accountability as established in Section ___.21. Cash advances to a recipient organization shall
be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash
requirements of the recipient organization in carrying out the purpose of the approved program or project.
The timing and amount of cash advances shall be as close as is administratively feasible to the actual
disbursements by the recipient organization for direct program or project costs and the proportionate share of
any allowable indirect costs.
(c) Whenever possible, advances shall be consolidated to cover anticipated cash needs for all awards
made by the Federal awarding agency to the recipient.
(1) Advance payment mechanisms include, but are not limited to, Treasury check and
electronic funds transfer.
(2) Advance payment mechanisms are subject to 31 CFR part 205.
(3) Recipients shall be authorized to submit requests for advances and reimbursements at least
monthly when electronic fund transfers are not used.
(d) Requests for Treasury check advance payment shall be submitted on SF-270, "Request for
Advance or Reimbursement," or other forms as may be authorized by OMB. This form is not to be used
when Treasury check advance payments are made to the recipient automatically through the use of a
predetermined payment schedule or if precluded by special Federal awarding agency instructions for
electronic funds transfer.
(e) Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met.
Federal awarding agencies may also use this method on any construction agreement, or if the major portion
of the construction project is accomplished through private market financing or Federal loans, and the
Federal assistance constitutes a minor portion of the project.
(1) When the reimbursement method is used, the Federal awarding agency shall make
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payment within 30 days after receipt of the billing, unless the billing is improper.
(2) Recipients shall be authorized to submit request for reimbursement at least monthly when
electronic funds transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments and the Federal awarding agency has
determined that reimbursement is not feasible because the recipient lacks sufficient working capital, the
Federal awarding agency may provide cash on a working capital advance basis. Under this procedure, the
Federal awarding agency shall advance cash to the recipient to cover its estimated disbursement needs for an
initial period generally geared to the awardee's disbursing cycle. Thereafter, the Federal awarding agency
shall reimburse the recipient for its actual cash disbursements. The working capital advance method of
payment shall not be used for recipients unwilling or unable to provide timely advances to their subrecipient
to meet the subrecipient's actual cash disbursements.
(g) To the extent available, recipients shall disburse funds available from repayments to and interest
earned on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries and
interest earned on such funds before requesting additional cash payments.
(h) Unless otherwise required by statute, Federal awarding agencies shall not withhold payments for
proper charges made by recipients at any time during the project period unless (1) or (2) apply.
(1) A recipient has failed to comply with the project objectives, the terms and conditions of the
award, or Federal reporting requirements.
(2) The recipient or subrecipient is delinquent in a debt to the United States as defined in
OMB Circular A-129, "Managing Federal Credit Programs." Under such conditions, the Federal
awarding agency may, upon reasonable notice, inform the recipient that payments shall not be made
for obligations incurred after a specified date until the conditions are corrected or the indebtedness to
the Federal Government is liquidated.
(i) Standards governing the use of banks and other institutions as depositories of funds advanced
under awards are as follows.
(1) Except for situations described in paragraph (i)(2), Federal awarding agencies shall not
require separate depository accounts for funds provided to a recipient or establish any eligibility
requirements for depositories for funds provided to a recipient. However, recipients must be able to
account for the receipt, obligation and expenditure of funds.
(2) Advances of Federal funds shall be deposited and maintained in insured accounts
whenever possible.
(j) Consistent with the national goal of expanding the opportunities for women-owned and minorityowned business enterprises, recipients shall be encouraged to use women- owned and minority-owned banks
(a bank which is owned at least 50 percent by women or minority group members).
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(k) Recipients shall maintain advances of Federal funds in interest bearing accounts, unless (1), (2) or
(3) apply.
(1) The recipient receives less than $120,000 in Federal awards per year.
(2) The best reasonably available interest bearing account would not be expected to earn
interest in excess of $250 per year on Federal cash balances.
(3) The depository would require an average or minimum balance so high that it would not be
feasible within the expected Federal and non-Federal cash resources.
(l) For those entities where CMIA and its implementing regulations do not apply, interest earned on
Federal advances deposited in interest bearing accounts shall be remitted annually to Department of Health
and Human Services, Payment Management System, Rockville, MD 20852. Interest amounts up to $250 per
year may be retained by the recipient for administrative expense. State universities and hospitals shall
comply with CMIA, as it pertains to interest. If an entity subject to CMIA uses its own funds to pay preaward costs for discretionary awards without prior written approval from the Federal awarding agency, it
waives its right to recover the interest under CMIA.
(m) Except as noted elsewhere in this Circular, only the following forms shall be authorized for the
recipients in requesting advances and reimbursements. Federal agencies shall not require more than an
original and two copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. Each Federal awarding agency shall
adopt the SF-270 as a standard form for all nonconstruction programs when electronic funds transfer
or predetermined advance methods are not used. Federal awarding agencies, however, have the
option of using this form for construction programs in lieu of the SF-271, "Outlay Report and
Request for Reimbursement for Construction Programs."
(2) SF-271, Outlay Report and Request for Reimbursement for Construction Programs. Each
Federal awarding agency shall adopt the SF-271 as the standard form to be used for requesting
reimbursement for construction programs. However, a Federal awarding agency may substitute the
SF-270 when the Federal awarding agency determines that it provides adequate information to meet
Federal needs.
___.23 Cost sharing or matching.
(a) All contributions, including cash and third party in-kind, shall be accepted as part of the recipient's
cost sharing or matching when such contributions meet all of the following criteria.
(1) Are verifiable from the recipient's records.
(2) Are not included as contributions for any other federally-assisted project or program.
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(3) Are necessary and reasonable for proper and efficient accomplishment of project or
program objectives.
(4) Are allowable under the applicable cost principles.
(5) Are not paid by the Federal Government under another award, except where authorized by
Federal statute to be used for cost sharing or matching.
(6) Are provided for in the approved budget when required by the Federal awarding agency.
(7) Conform to other provisions of this Circular, as applicable.
(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior
approval of the Federal awarding agency.
(c) Values for recipient contributions of services and property shall be established in accordance with
the applicable cost principles. If a Federal awarding agency authorizes recipients to donate buildings or land
for construction/facilities acquisition projects or long-term use, the value of the donated property for cost
sharing or matching shall be the lesser of (1) or (2).
(1) The certified value of the remaining life of the property recorded in the recipient's
accounting records at the time of donation.
(2) The current fair market value. However, when there is sufficient justification, the Federal
awarding agency may approve the use of the current fair market value of the donated property, even
if it exceeds the certified value at the time of donation to the project.
(d) Volunteer services furnished by professional and technical personnel, consultants, and other
skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and
necessary part of an approved project or program. Rates for volunteer services shall be consistent with those
paid for similar work in the recipient's organization. In those instances in which the required skills are not
found in the recipient organization, rates shall be consistent with those paid for similar work in the labor
market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits
that are reasonable, allowable, and allocable may be included in the valuation.
(e) When an employer other than the recipient furnishes the services of an employee, these services
shall be valued at the employee's regular rate of pay (plus an amount of fringe benefits that are reasonable,
allowable, and allocable, but exclusive of overhead costs), provided these services are in the same skill for
which the employee is normally paid.
(f) Donated supplies may include such items as expendable equipment, office supplies, laboratory
supplies or workshop and classroom supplies. Value assessed to donated supplies included in the cost

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sharing or matching share shall be reasonable and shall not exceed the fair market value of the property at
the time of the donation.
(g) The method used for determining cost sharing or matching for donated equipment, buildings and
land for which title passes to the recipient may differ according to the purpose of the award, if (1) or (2)
apply.
(1) If the purpose of the award is to assist the recipient in the acquisition of equipment,
buildings or land, the total value of the donated property may be claimed as cost sharing or matching.
(2) If the purpose of the award is to support activities that require the use of equipment,
buildings or land, normally only depreciation or use charges for equipment and buildings may be
made. However, the full value of equipment or other capital assets and fair rental charges for land
may be allowed, provided that the Federal awarding agency has approved the charges.
(h) The value of donated property shall be determined in accordance with the usual accounting
policies of the recipient, with the following qualifications.
(1) The value of donated land and buildings shall not exceed its fair market value at the time
of donation to the recipient as established by an independent appraiser (e.g., certified real property
appraiser or General Services Administration representative) and certified by a responsible official of
the recipient.
(2) The value of donated equipment shall not exceed the fair market value of equipment of the
same age and condition at the time of donation.
(3) The value of donated space shall not exceed the fair rental value of comparable space as
established by an independent appraisal of comparable space and facilities in a privately-owned
building in the same locality.
(4) The value of loaned equipment shall not exceed its fair rental value.
(5) The following requirements pertain to the recipient's supporting records for in-kind
contributions from third parties.
(i) Volunteer services shall be documented and, to the extent feasible, supported by the
same methods used by the recipient for its own employees.
(ii) The basis for determining the valuation for personal service, material, equipment,
buildings and land shall be documented.
___.24 Program income.

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(a) Federal awarding agencies shall apply the standards set forth in this section in requiring recipient
organizations to account for program income related to projects financed in whole or in part with Federal
funds.
(b) Except as provided in paragraph (h) below, program income earned during the project period shall
be retained by the recipient and, in accordance with Federal awarding agency regulations or the terms and
conditions of the award, shall be used in one or more of the ways listed in the following.
(1) Added to funds committed to the project by the Federal awarding agency and recipient and
used to further eligible project or program objectives.
(2) Used to finance the non-Federal share of the project or program.
(3) Deducted from the total project or program allowable cost in determining the net allowable
costs on which the Federal share of costs is based.
(c) When an agency authorizes the disposition of program income as described in paragraphs (b)(1)
or (b)(2), program income in excess of any limits stipulated shall be used in accordance with paragraph
(b)(3).
(d) In the event that the Federal awarding agency does not specify in its regulations or the terms and
conditions of the award how program income is to be used, paragraph (b)(3) shall apply automatically to all
projects or programs except research. For awards that support research, paragraph (b)(1) shall apply
automatically unless the awarding agency indicates in the terms and conditions another alternative on the
award or the recipient is subject to special award conditions, as indicated in Section ___.14.
(e) Unless Federal awarding agency regulations or the terms and conditions of the award provide
otherwise, recipients shall have no obligation to the Federal Government regarding program income earned
after the end of the project period.
(f) If authorized by Federal awarding agency regulations or the terms and conditions of the award,
costs incident to the generation of program income may be deducted from gross income to determine
program income, provided these costs have not been charged to the award.
(g) Proceeds from the sale of property shall be handled in accordance with the requirements of the
Property Standards (See Sections ___.30 through ___.37).
(h) Unless Federal awarding agency regulations or the terms and condition of the award provide
otherwise, recipients shall have no obligation to the Federal Government with respect to program income
earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and
inventions produced under an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply to
inventions made under an experimental, developmental, or research award.
___.25 Revision of budget and program plans.
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(a) The budget plan is the financial expression of the project or program as approved during the
award process. It may include either the Federal and non-Federal share, or only the Federal share, depending
upon Federal awarding agency requirements. It shall be related to performance for program evaluation
purposes whenever appropriate.
(b) Recipients are required to report deviations from budget and program plans, and request prior
approvals for budget and program plan revisions, in accordance with this section.
(c) For nonconstruction awards, recipients shall request prior approvals from Federal awarding
agencies for one or more of the following program or budget related reasons.
(1) Change in the scope or the objective of the project or program (even if there is no
associated budget revision requiring prior written approval).
(2) Change in a key person specified in the application or award document.
(3) The absence for more than three months, or a 25 percent reduction in time devoted to the
project, by the approved project director or principal investigator.
(4) The need for additional Federal funding.
(5) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or
vice versa, if approval is required by the Federal awarding agency.
(6) The inclusion, unless waived by the Federal awarding agency, of costs that require prior
approval in accordance with OMB Circular A-21, "Cost Principles for Educational Institutions,"
OMB Circular A-122, "Cost Principles for Non-Profit Organizations," or 45 CFR part 74 Appendix
E, "Principles for Determining Costs Applicable to Research and Development under Grants and
Contracts with Hospitals," or 48 CFR part 31, "Contract Cost Principles and Procedures," as
applicable.
(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other
categories of expense.
(8) Unless described in the application and funded in the approved awards, the subaward,
transfer or contracting out of any work under an award. This provision does not apply to the purchase
of supplies, material, equipment or general support services.
(d) No other prior approval requirements for specific items may be imposed unless a deviation has
been approved by OMB.
(e) Except for requirements listed in paragraphs (c)(1) and (c)(4) of this section, Federal awarding
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agencies are authorized, at their option, to waive cost-related and administrative prior written approvals
required by this Circular and OMB Circulars A-21 and A-122. Such waivers may include authorizing
recipients to do any one or more of the following.
(1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with
the prior approval of the Federal awarding agency. All pre-award costs are incurred at the recipient's
risk (i.e., the Federal awarding agency is under no obligation to reimburse such costs if for any reason
the recipient does not receive an award or if the award is less than anticipated and inadequate to cover
such costs).
(2) Initiate a one-time extension of the expiration date of the award of up to 12 months unless
one or more of the following conditions apply. For one-time extensions, the recipient must notify the
Federal awarding agency in writing with the supporting reasons and revised expiration date at least 10
days before the expiration date specified in the award. This one-time extension may not be exercised
merely for the purpose of using unobligated balances.
(i) The terms and conditions of award prohibit the extension.
(ii) The extension requires additional Federal funds.
(iii) The extension involves any change in the approved objectives or scope of the
project.
(3) Carry forward unobligated balances to subsequent funding periods.
(4) For awards that support research, unless the Federal awarding agency provides otherwise
in the award or in the agency's regulations, the prior approval requirements described in paragraph (e)
are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the
conditions included in paragraph (e)(2) applies.
(f) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost
categories or programs, functions and activities for awards in which the Federal share of the project exceeds
$100,000 and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the
total budget as last approved by the Federal awarding agency. No Federal awarding agency shall permit a
transfer that would cause any Federal appropriation or part thereof to be used for purposes other than those
consistent with the original intent of the appropriation.
(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j),
do not require prior approval.
(h) For construction awards, recipients shall request prior written approval promptly from Federal
awarding agencies for budget revisions whenever (1), (2) or (3) apply.
(1) The revision results from changes in the scope or the objective of the project or program.
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(2) The need arises for additional Federal funds to complete the project.
(3) A revision is desired which involves specific costs for which prior written approval
requirements may be imposed consistent with applicable OMB cost principles listed in
Section ___.27.
(i) No other prior approval requirements for specific items may be imposed unless a deviation has
been approved by OMB.
(j) When a Federal awarding agency makes an award that provides support for both construction and
nonconstruction work, the Federal awarding agency may require the recipient to request prior approval from
the Federal awarding agency before making any fund or budget transfers between the two types of work
supported.
(k) For both construction and nonconstruction awards, Federal awarding agencies shall require
recipients to notify the Federal awarding agency in writing promptly whenever the amount of Federal
authorized funds is expected to exceed the needs of the recipient for the project period by more than $5000
or five percent of the Federal award, whichever is greater. This notification shall not be required if an
application for additional funding is submitted for a continuation award.
(l) When requesting approval for budget revisions, recipients shall use the budget forms that were
used in the application unless the Federal awarding agency indicates a letter of request suffices.
(m) Within 30 calendar days from the date of receipt of the request for budget revisions, Federal
awarding agencies shall review the request and notify the recipient whether the budget revisions have been
approved. If the revision is still under consideration at the end of 30 calendar days, the Federal awarding
agency shall inform the recipient in writing of the date when the recipient may expect the decision.
___.26 Non-Federal audits.
(a) Recipients and subrecipients that are institutions of higher education or other non-profit
organizations (including hospitals) shall be subject to the audit requirements contained in the Single Audit
Act Amendments of 1996 (31 USC 7501-7507) and revised OMB Circular A-133, "Audits of States, Local
Governments, and Non-Profit Organizations."
(b) State and local governments shall be subject to the audit requirements contained in the Single
Audit Act Amendments of 1996 (31 USC 7501-7507) and revised OMB Circular A-133, "Audits of States,
Local Governments, and Non-Profit Organizations."
(c) For-profit hospitals not covered by the audit provisions of revised OMB Circular A-133 shall be
subject to the audit requirements of the Federal awarding agencies.

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(d) Commercial organizations shall be subject to the audit requirements of the Federal awarding
agency or the prime recipient as incorporated into the award document.
___.27 Allowable costs. For each kind of recipient, there is a set of Federal principles for determining
allowable costs. Allowability of costs shall be determined in accordance with the cost principles applicable
to the entity incurring the costs. Thus, allowability of costs incurred by State, local or federally-recognized
Indian tribal governments is determined in accordance with the provisions of OMB Circular A-87, "Cost
Principles for State, Local, and Indian Tribal Governments." The allowability of costs incurred by non-profit
organizations is determined in accordance with the provisions of OMB Circular A-122, "Cost Principles for
Non-Profit Organizations." The allowability of costs incurred by institutions of higher education is
determined in accordance with the provisions of OMB Circular A-21, "Cost Principles for Educational
Institutions." The allowability of costs incurred by hospitals is determined in accordance with the provisions
of Appendix E of 45 CFR part 74, "Principles for Determining Costs Applicable to Research and
Development Under Grants and Contracts with Hospitals." The allowability of costs incurred by commercial
organizations and those non-profit organizations listed in Attachment C to Circular A-122 is determined in
accordance with the provisions of the Federal Acquisition Regulation (FAR) at 48 CFR part 31.
___.28 Period of availability of funds. Where a funding period is specified, a recipient may charge to the
grant only allowable costs resulting from obligations incurred during the funding period and any pre-award
costs authorized by the Federal awarding agency.
___.29 Conditional exemptions.
(a) OMB authorizes conditional exemption from OMB administrative requirements and cost
principles circulars for certain Federal programs with statutorily-authorized consolidated planning and
consolidated administrative funding, that are identified by a Federal agency and approved by the head of the
Executive department or establishment. A Federal agency shall consult with OMB during its consideration
of whether to grant such an exemption.
(b) To promote efficiency in State and local program administration, when Federal non-entitlement
programs with common purposes have specific statutorily-authorized consolidated planning and
consolidated administrative funding and where most of the State agency's resources come from non-Federal
sources, Federal agencies may exempt these covered State-administered, non-entitlement grant programs
from certain OMB grants management requirements. The exemptions would be from all but the allocability
of costs provisions of OMB Circulars A-87 (Attachment A, subsection C.3), "Cost Principles for State,
Local, and Indian Tribal Governments," A-21 (Section C, subpart 4), "Cost Principles for Educational
Institutions," and A-122 (Attachment A, subsection A.4), "Cost Principles for Non-Profit Organizations,"
and from all of the administrative requirements provisions of OMB Circular A-110, "Uniform
Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals,
and Other Non-Profit Organizations," and the agencies' grants management common rule.
(c) When a Federal agency provides this flexibility, as a prerequisite to a State's exercising this
option, a State must adopt its own written fiscal and administrative requirements for expending and
accounting for all funds, which are consistent with the provisions of OMB Circular A-87, and extend such
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policies to all subrecipients. These fiscal and administrative requirements must be sufficiently specific to
ensure that: funds are used in compliance with all applicable Federal statutory and regulatory provisions,
costs are reasonable and necessary for operating these programs, and funds are not be used for general
expenses required to carry out other responsibilities of a State or its subrecipients.
Property Standards
___.30 Purpose of property standards. Sections ___.31 through ___.37 set forth uniform standards governing
management and disposition of property furnished by the Federal Government whose cost was charged to a
project supported by a Federal award. Federal awarding agencies shall require recipients to observe these
standards under awards and shall not impose additional requirements, unless specifically required by Federal
statute. The recipient may use its own property management standards and procedures provided it observes
the provisions of Sections ___.31 through ___.37.
___.31 Insurance coverage. Recipients shall, at a minimum, provide the equivalent insurance coverage for
real property and equipment acquired with Federal funds as provided to property owned by the recipient.
Federally-owned property need not be insured unless required by the terms and conditions of the award.
___.32 Real property. Each Federal awarding agency shall prescribe requirements for recipients concerning
the use and disposition of real property acquired in whole or in part under awards. Unless otherwise provided
by statute, such requirements, at a minimum, shall contain the following.
(a) Title to real property shall vest in the recipient subject to the condition that the recipient shall use
the real property for the authorized purpose of the project as long as it is needed and shall not encumber the
property without approval of the Federal awarding agency.
(b) The recipient shall obtain written approval by the Federal awarding agency for the use of real
property in other federally-sponsored projects when the recipient determines that the property is no longer
needed for the purpose of the original project. Use in other projects shall be limited to those under federallysponsored projects (i.e., awards) or programs that have purposes consistent with those authorized for support
by the Federal awarding agency.
(c) When the real property is no longer needed as provided in paragraphs (a) and (b), the recipient
shall request disposition instructions from the Federal awarding agency or its successor Federal awarding
agency. The Federal awarding agency shall observe one or more of the following disposition instructions.
(1) The recipient may be permitted to retain title without further obligation to the Federal
Government after it compensates the Federal Government for that percentage of the current fair
market value of the property attributable to the Federal participation in the project.
(2) The recipient may be directed to sell the property under guidelines provided by the Federal
awarding agency and pay the Federal Government for that percentage of the current fair market value
of the property attributable to the Federal participation in the project (after deducting actual and
reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is
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authorized or required to sell the property, proper sales procedures shall be established that provide
for competition to the extent practicable and result in the highest possible return.
(3) The recipient may be directed to transfer title to the property to the Federal Government or
to an eligible third party provided that, in such cases, the recipient shall be entitled to compensation
for its attributable percentage of the current fair market value of the property.
___.33 Federally-owned and exempt property.
(a) Federally-owned property.
(1) Title to federally-owned property remains vested in the Federal Government. Recipients
shall submit annually an inventory listing of federally-owned property in their custody to the Federal
awarding agency. Upon completion of the award or when the property is no longer needed, the
recipient shall report the property to the Federal awarding agency for further Federal agency
utilization.
(2) If the Federal awarding agency has no further need for the property, it shall be declared
excess and reported to the General Services Administration, unless the Federal awarding agency has
statutory authority to dispose of the property by alternative methods (e.g., the authority provided by
the Federal Technology Transfer Act (15 U.S.C. 3710 (I)) to donate research equipment to
educational and non-profit organizations in accordance with E.O. 12821, "Improving Mathematics
and Science Education in Support of the National Education Goals.") Appropriate instructions shall
be issued to the recipient by the Federal awarding agency.
(b) Exempt property. When statutory authority exists, the Federal awarding agency has the option to
vest title to property acquired with Federal funds in the recipient without further obligation to the Federal
Government and under conditions the Federal awarding agency considers appropriate. Such property is
"exempt property." Should a Federal awarding agency not establish conditions, title to exempt property upon
acquisition shall vest in the recipient without further obligation to the Federal Government.
___.34 Equipment.
(a) Title to equipment acquired by a recipient with Federal funds shall vest in the recipient, subject to
conditions of this section.
(b) The recipient shall not use equipment acquired with Federal funds to provide services to nonFederal outside organizations for a fee that is less than private companies charge for equivalent services,
unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in
the equipment.
(c) The recipient shall use the equipment in the project or program for which it was acquired as long
as needed, whether or not the project or program continues to be supported by Federal funds and shall not
encumber the property without approval of the Federal awarding agency. When no longer needed for the
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original project or program, the recipient shall use the equipment in connection with its other federallysponsored activities, in the following order of priority: (i) Activities sponsored by the Federal awarding
agency which funded the original project, then (ii) activities sponsored by other Federal awarding agencies.
(d) During the time that equipment is used on the project or program for which it was acquired, the
recipient shall make it available for use on other projects or programs if such other use will not interfere with
the work on the project or program for which the equipment was originally acquired. First preference for
such other use shall be given to other projects or programs sponsored by the Federal awarding agency that
financed the equipment; second preference shall be given to projects or programs sponsored by other Federal
awarding agencies. If the equipment is owned by the Federal Government, use on other activities not
sponsored by the Federal Government shall be permissible if authorized by the Federal awarding agency.
User charges shall be treated as program income.
(e) When acquiring replacement equipment, the recipient may use the equipment to be replaced as
trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment subject
to the approval of the Federal awarding agency.
(f) The recipient's property management standards for equipment acquired with Federal funds and
federally-owned equipment shall include all of the following.
(1) Equipment records shall be maintained accurately and shall include the following
information.
(i) A description of the equipment.
(ii) Manufacturer's serial number, model number, Federal stock number, national stock
number, or other identification number.
(iii) Source of the equipment, including the award number.
(iv) Whether title vests in the recipient or the Federal Government.
(v) Acquisition date (or date received, if the equipment was furnished by the Federal
Government) and cost.
(vi) Information from which one can calculate the percentage of Federal participation
in the cost of the equipment (not applicable to equipment furnished by the Federal
Government).
(vii) Location and condition of the equipment and the date the information was
reported.
(viii) Unit acquisition cost.

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(ix) Ultimate disposition data, including date of disposal and sales price or the method
used to determine current fair market value where a recipient compensates the Federal
awarding agency for its share.
(2) Equipment owned by the Federal Government shall be identified to indicate Federal
ownership.
(3) A physical inventory of equipment shall be taken and the results reconciled with the
equipment records at least once every two years. Any differences between quantities determined by
the physical inspection and those shown in the accounting records shall be investigated to determine
the causes of the difference. The recipient shall, in connection with the inventory, verify the
existence, current utilization, and continued need for the equipment.
(4) A control system shall be in effect to insure adequate safeguards to prevent loss, damage,
or theft of the equipment. Any loss, damage, or theft of equipment shall be investigated and fully
documented; if the equipment was owned by the Federal Government, the recipient shall promptly
notify the Federal awarding agency.
(5) Adequate maintenance procedures shall be implemented to keep the equipment in good
condition.
(6) Where the recipient is authorized or required to sell the equipment, proper sales procedures
shall be established which provide for competition to the extent practicable and result in the highest
possible return.
(g) When the recipient no longer needs the equipment, the equipment may be used for other activities
in accordance with the following standards. For equipment with a current per unit fair market value of $5000
or more, the recipient may retain the equipment for other uses provided that compensation is made to the
original Federal awarding agency or its successor. The amount of compensation shall be computed by
applying the percentage of Federal participation in the cost of the original project or program to the current
fair market value of the equipment. If the recipient has no need for the equipment, the recipient shall request
disposition instructions from the Federal awarding agency. The Federal awarding agency shall determine
whether the equipment can be used to meet the agency's requirements. If no requirement exists within that
agency, the availability of the equipment shall be reported to the General Services Administration by the
Federal awarding agency to determine whether a requirement for the equipment exists in other Federal
agencies. The Federal awarding agency shall issue instructions to the recipient no later than 120 calendar
days after the recipient's request and the following procedures shall govern.
(1) If so instructed or if disposition instructions are not issued within 120 calendar days after
the recipient's request, the recipient shall sell the equipment and reimburse the Federal awarding
agency an amount computed by applying to the sales proceeds the percentage of Federal participation
in the cost of the original project or program. However, the recipient shall be permitted to deduct and
retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for the recipient's
selling and handling expenses.
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(2) If the recipient is instructed to ship the equipment elsewhere, the recipient shall be
reimbursed by the Federal Government by an amount which is computed by applying the percentage
of the recipient's participation in the cost of the original project or program to the current fair market
value of the equipment, plus any reasonable shipping or interim storage costs incurred.
(3) If the recipient is instructed to otherwise dispose of the equipment, the recipient shall be
reimbursed by the Federal awarding agency for such costs incurred in its disposition.
(4) The Federal awarding agency may reserve the right to transfer the title to the Federal
Government or to a third party named by the Federal Government when such third party is otherwise
eligible under existing statutes. Such transfer shall be subject to the following standards.
(i) The equipment shall be appropriately identified in the award or otherwise made
known to the recipient in writing.
(ii) The Federal awarding agency shall issue disposition instructions within 120
calendar days after receipt of a final inventory. The final inventory shall list all equipment
acquired with grant funds and federally-owned equipment. If the Federal awarding agency
fails to issue disposition instructions within the 120 calendar day period, the recipient shall
apply the standards of this section, as appropriate.
(iii) When the Federal awarding agency exercises its right to take title, the equipment
shall be subject to the provisions for federally-owned equipment.
___.35 Supplies and other expendable property.
(a) Title to supplies and other expendable property shall vest in the recipient upon acquisition. If there
is a residual inventory of unused supplies exceeding $5000 in total aggregate value upon termination or
completion of the project or program and the supplies are not needed for any other federally-sponsored
project or program, the recipient shall retain the supplies for use on non-Federal sponsored activities or sell
them, but shall, in either case, compensate the Federal Government for its share. The amount of
compensation shall be computed in the same manner as for equipment.
(b) The recipient shall not use supplies acquired with Federal funds to provide services to non-Federal
outside organizations for a fee that is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute as long as the Federal Government retains an interest in the
supplies.
___.36 Intangible property.
(a) The recipient may copyright any work that is subject to copyright and was developed, or for
which ownership was purchased, under an award. The Federal awarding agency(ies) reserve a royalty-free,
nonexclusive and irrevocable right to reproduce, publish, or otherwise use the work for Federal purposes,
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and to authorize others to do so.
(b) Recipients are subject to applicable regulations governing patents and inventions, including
government-wide regulations issued by the Department of Commerce at 37 CFR part 401, "Rights to
Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants,
Contracts and Cooperative Agreements."
(c) The Federal Government has the right to:
(1) obtain, reproduce, publish or otherwise use the data first produced under an award; and
(2) authorize others to receive, reproduce, publish, or otherwise use such data for Federal
purposes.
(d) (1) In addition, in response to a Freedom of Information Act (FOIA) request for research data
relating to published research findings produced under an award that were used by the Federal Government
in developing an agency action that has the force and effect of law, the Federal awarding agency shall
request, and the recipient shall provide, within a reasonable time, the research data so that they can be made
available to the public through the procedures established under the FOIA. If the Federal awarding agency
obtains the research data solely in response to a FOIA request, the agency may charge the requester a
reasonable fee equaling the full incremental cost of obtaining the research data. This fee should reflect costs
incurred by the agency, the recipient, and applicable subrecipients. This fee is in addition to any fees the
agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).
(2) The following definitions apply for purposes of paragraph (d) of this section:
(i) Research data is defined as the recorded factual material commonly accepted in the
scientific community as necessary to validate research findings, but not any of the following:
preliminary analyses, drafts of scientific papers, plans for future research, peer reviews, or
communications with colleagues. This "recorded" material excludes physical objects (e.g.,
laboratory samples). Research data also do not include:
(A) Trade secrets, commercial information, materials necessary to be held
confidential by a researcher until they are published, or similar information which is
protected under law; and
(B) Personnel and medical information and similar information the disclosure of
which would constitute a clearly unwarranted invasion of personal privacy, such as
information that could be used to identify a particular person in a research study.
(ii) Published is defined as either when:
(A) Research findings are published in a peer-reviewed scientific or technical
journal; or
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(B) A Federal agency publicly and officially cites the research findings in
support of an agency action that has the force and effect of law.
(iii) Used by the Federal Government in developing an agency action that has the force
and effect of law is defined as when an agency publicly and officially cites the research
findings in support of an agency action that has the force and effect of law.
(e) Title to intangible property and debt instruments acquired under an award or subaward vests upon
acquisition in the recipient. The recipient shall use that property for the originally-authorized purpose, and
the recipient shall not encumber the property without approval of the Federal awarding agency. When no
longer needed for the originally authorized purpose, disposition of the intangible property shall occur in
accordance with the provisions of paragraph ___.34(g).
___.37 Property trust relationship. Real property, equipment, intangible property and debt instruments that
are acquired or improved with Federal funds shall be held in trust by the recipient as trustee for the
beneficiaries of the project or program under which the property was acquired or improved. Agencies may
require recipients to record liens or other appropriate notices of record to indicate that personal or real
property has been acquired or improved with Federal funds and that use and disposition conditions apply to
the property.
Procurement Standards
___.40 Purpose of procurement standards. Sections ___.41 through ___.48 set forth standards for use by
recipients in establishing procedures for the procurement of supplies and other expendable property,
equipment, real property and other services with Federal funds. These standards are furnished to ensure that
such materials and services are obtained in an effective manner and in compliance with the provisions of
applicable Federal statutes and executive orders. No additional procurement standards or requirements shall
be imposed by the Federal awarding agencies upon recipients, unless specifically required by Federal statute
or executive order or approved by OMB.
___.41 Recipient responsibilities. The standards contained in this section do not relieve the recipient of the
contractual responsibilities arising under its contract(s). The recipient is the responsible authority, without
recourse to the Federal awarding agency, regarding the settlement and satisfaction of all contractual and
administrative issues arising out of procurements entered into in support of an award or other agreement.
This includes disputes, claims, protests of award, source evaluation or other matters of a contractual nature.
Matters concerning violation of statute are to be referred to such Federal, State or local authority as may
have proper jurisdiction.
___.42 Codes of conduct. The recipient shall maintain written standards of conduct governing the
performance of its employees engaged in the award and administration of contracts. No employee, officer, or
agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a
real or apparent conflict of interest would be involved. Such a conflict would arise when the employee,
officer, or agent, any member of his or her immediate family, his or her partner, or an organization which
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employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm
selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept
gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However,
recipients may set standards for situations in which the financial interest is not substantial or the gift is an
unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be
applied for violations of such standards by officers, employees, or agents of the recipient.
___.43 Competition. All procurement transactions shall be conducted in a manner to provide, to the
maximum extent practical, open and free competition. The recipient shall be alert to organizational conflicts
of interest as well as noncompetitive practices among contractors that may restrict or eliminate competition
or otherwise restrain trade. In order to ensure objective contractor performance and eliminate unfair
competitive advantage, contractors that develop or draft specifications, requirements, statements of work,
invitations for bids and/or requests for proposals shall be excluded from competing for such procurements.
Awards shall be made to the bidder or offeror whose bid or offer is responsive to the solicitation and is most
advantageous to the recipient, price, quality and other factors considered. Solicitations shall clearly set forth
all requirements that the bidder or offeror shall fulfill in order for the bid or offer to be evaluated by the
recipient. Any and all bids or offers may be rejected when it is in the recipient's interest to do so.
___.44 Procurement procedures.
(a) All recipients shall establish written procurement procedures. These procedures shall provide for,
at a minimum, that (1), (2) and (3) apply.
(1) Recipients avoid purchasing unnecessary items.
(2) Where appropriate, an analysis is made of lease and purchase alternatives to determine
which would be the most economical and practical procurement for the Federal Government.
(3) Solicitations for goods and services provide for all of the following.
(i) A clear and accurate description of the technical requirements for the material,
product or service to be procured. In competitive procurements, such a description shall not
contain features which unduly restrict competition.
(ii) Requirements which the bidder/offeror must fulfill and all other factors to be used
in evaluating bids or proposals.
(iii) A description, whenever practicable, of technical requirements in terms of
functions to be performed or performance required, including the range of acceptable
characteristics or minimum acceptable standards.
(iv) The specific features of "brand name or equal" descriptions that bidders are
required to meet when such items are included in the solicitation.

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(v) The acceptance, to the extent practicable and economically feasible, of products and
services dimensioned in the metric system of measurement.
(vi) Preference, to the extent practicable and economically feasible, for products and
services that conserve natural resources and protect the environment and are energy efficient.
(b) Positive efforts shall be made by recipients to utilize small businesses, minority-owned firms, and
women's business enterprises, whenever possible. Recipients of Federal awards shall take all of the
following steps to further this goal.
(1) Ensure that small businesses, minority-owned firms, and women's business enterprises are
used to the fullest extent practicable.
(2) Make information on forthcoming opportunities available and arrange time frames for
purchases and contracts to encourage and facilitate participation by small businesses, minority-owned
firms, and women's business enterprises.
(3) Consider in the contract process whether firms competing for larger contracts intend to
subcontract with small businesses, minority-owned firms, and women's business enterprises.
(4) Encourage contracting with consortiums of small businesses, minority-owned firms and
women's business enterprises when a contract is too large for one of these firms to handle
individually.
(5) Use the services and assistance, as appropriate, of such organizations as the Small Business
Administration and the Department of Commerce's Minority Business Development Agency in the
solicitation and utilization of small businesses, minority- owned firms and women's business
enterprises.
(c) The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts,
purchase orders, and incentive contracts) shall be determined by the recipient but shall be appropriate for the
particular procurement and for promoting the best interest of the program or project involved. The "cost-plusa-percentage-of-cost" or "percentage of construction cost" methods of contracting shall not be used.
(d) Contracts shall be made only with responsible contractors who possess the potential ability to
perform successfully under the terms and conditions of the proposed procurement. Consideration shall be
given to such matters as contractor integrity, record of past performance, financial and technical resources or
accessibility to other necessary resources. In certain circumstances, contracts with certain parties are
restricted by agencies' implementation of E.O.s 12549 and 12689, "Debarment and Suspension."
(e) Recipients shall, on request, make available for the Federal awarding agency, pre-award review
and procurement documents, such as request for proposals or invitations for bids, independent cost
estimates, etc., when any of the following conditions apply.

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(1) A recipient's procurement procedures or operation fails to comply with the procurement
standards in the Federal awarding agency's implementation of this Circular.
(2) The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C. 403
(11) (currently $25,000) and is to be awarded without competition or only one bid or offer is received
in response to a solicitation.
(3) The procurement, which is expected to exceed the small purchase threshold, specifies a
"brand name" product.
(4) The proposed award over the small purchase threshold is to be awarded to other than the
apparent low bidder under a sealed bid procurement.
(5) A proposed contract modification changes the scope of a contract or increases the contract
amount by more than the amount of the small purchase threshold.
___.45 Cost and price analysis. Some form of cost or price analysis shall be made and documented in the
procurement files in connection with every procurement action. Price analysis may be accomplished in
various ways, including the comparison of price quotations submitted, market prices and similar indicia,
together with discounts. Cost analysis is the review and evaluation of each element of cost to determine
reasonableness, allocability and allowability.
___.46 Procurement records. Procurement records and files for purchases in excess of the small purchase
threshold shall include the following at a minimum: (a) basis for contractor selection, (b) justification for
lack of competition when competitive bids or offers are not obtained, and (c) basis for award cost or price.
___.47 Contract administration. A system for contract administration shall be maintained to ensure
contractor conformance with the terms, conditions and specifications of the contract and to ensure adequate
and timely follow up of all purchases. Recipients shall evaluate contractor performance and document, as
appropriate, whether contractors have met the terms, conditions and specifications of the contract.
___.48 Contract provisions. The recipient shall include, in addition to provisions to define a sound and
complete agreement, the following provisions in all contracts. The following provisions shall also be applied
to subcontracts.
(a) Contracts in excess of the small purchase threshold shall contain contractual provisions or
conditions that allow for administrative, contractual, or legal remedies in instances in which a contractor
violates or breaches the contract terms, and provide for such remedial actions as may be appropriate.
(b) All contracts in excess of the small purchase threshold shall contain suitable provisions for
termination by the recipient, including the manner by which termination shall be effected and the basis for
settlement. In addition, such contracts shall describe conditions under which the contract may be terminated
for default as well as conditions where the contract may be terminated because of circumstances beyond the
control of the contractor.
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(c) Except as otherwise required by statute, an award that requires the contracting (or subcontracting)
for construction or facility improvements shall provide for the recipient to follow its own requirements
relating to bid guarantees, performance bonds, and payment bonds unless the construction contract or
subcontract exceeds $100,000. For those contracts or subcontracts exceeding $100,000, the Federal awarding
agency may accept the bonding policy and requirements of the recipient, provided the Federal awarding
agency has made a determination that the Federal Government's interest is adequately protected. If such a
determination has not been made, the minimum requirements shall be as follows.
(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The "bid
guarantee" shall consist of a firm commitment such as a bid bond, certified check, or other negotiable
instrument accompanying a bid as assurance that the bidder shall, upon acceptance of his bid, execute
such contractual documents as may be required within the time specified.
(2) A performance bond on the part of the contractor for 100 percent of the contract price. A
"performance bond" is one executed in connection with a contract to secure fulfillment of all the
contractor's obligations under such contract.
(3) A payment bond on the part of the contractor for 100 percent of the contract price. A
"payment bond" is one executed in connection with a contract to assure payment as required by
statute of all persons supplying labor and material in the execution of the work provided for in the
contract.
(4) Where bonds are required in the situations described herein, the bonds shall be obtained
from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR part 223,
"Surety Companies Doing Business with the United States."
(d) All negotiated contracts (except those for less than the small purchase threshold) awarded by
recipients shall include a provision to the effect that the recipient, the Federal awarding agency, the
Comptroller General of the United States, or any of their duly authorized representatives, shall have access
to any books, documents, papers and records of the contractor which are directly pertinent to a specific
program for the purpose of making audits, examinations, excerpts and transcriptions.
(e) All contracts, including small purchases, awarded by recipients and their contractors shall contain
the procurement provisions of Appendix A to this Circular, as applicable.
Reports and Records
___.50 Purpose of reports and records. Sections ___.51 through ___.53 set forth the procedures for
monitoring and reporting on the recipient's financial and program performance and the necessary standard
reporting forms. They also set forth record retention requirements.
___.51 Monitoring and reporting program performance.

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(a) Recipients are responsible for managing and monitoring each project, program, subaward,
function or activity supported by the award. Recipients shall monitor subawards to ensure subrecipients have
met the audit requirements as delineated in Section ___.26.
(b) The Federal awarding agency shall prescribe the frequency with which the performance reports
shall be submitted. Except as provided in paragraph ___.51(f), performance reports shall not be required
more frequently than quarterly or, less frequently than annually. Annual reports shall be due 90 calendar
days after the grant year; quarterly or semi-annual reports shall be due 30 days after the reporting period.
The Federal awarding agency may require annual reports before the anniversary dates of multiple year
awards in lieu of these requirements. The final performance reports are due 90 calendar days after the
expiration or termination of the award.
(c) If inappropriate, a final technical or performance report shall not be required after completion of
the project.
(d) When required, performance reports shall generally contain, for each award, brief information on
each of the following.
(1) A comparison of actual accomplishments with the goals and objectives established for the
period, the findings of the investigator, or both. Whenever appropriate and the output of programs or
projects can be readily quantified, such quantitative data should be related to cost data for
computation of unit costs.
(2) Reasons why established goals were not met, if appropriate.
(3) Other pertinent information including, when appropriate, analysis and explanation of cost
overruns or high unit costs.
(e) Recipients shall not be required to submit more than the original and two copies of performance
reports.
(f) Recipients shall immediately notify the Federal awarding agency of developments that have a
significant impact on the award-supported activities. Also, notification shall be given in the case of
problems, delays, or adverse conditions which materially impair the ability to meet the objectives of the
award. This notification shall include a statement of the action taken or contemplated, and any assistance
needed to resolve the situation.
(g) Federal awarding agencies may make site visits, as needed.
(h) Federal awarding agencies shall comply with clearance requirements of 5 CFR part 1320 when
requesting performance data from recipients.
___.52 Financial reporting.

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(a) The following forms or such other forms as may be approved by OMB are authorized for
obtaining financial information from recipients.
(1) SF-269 or SF-269A, Financial Status Report.
(i) Each Federal awarding agency shall require recipients to use the SF-269 or SF-269A
to report the status of funds for all nonconstruction projects or programs. A Federal awarding
agency may, however, have the option of not requiring the SF-269 or SF-269A when the SF270, Request for Advance or Reimbursement, or SF-272, Report of Federal Cash
Transactions, is determined to provide adequate information to meet its needs, except that a
final SF-269 or SF-269A shall be required at the completion of the project when the SF-270 is
used only for advances.
(ii) The Federal awarding agency shall prescribe whether the report shall be on a cash
or accrual basis. If the Federal awarding agency requires accrual information and the
recipient's accounting records are not normally kept on the accrual basis, the recipient shall not
be required to convert its accounting system, but shall develop such accrual information
through best estimates based on an analysis of the documentation on hand.
(iii) The Federal awarding agency shall determine the frequency of the Financial Status
Report for each project or program, considering the size and complexity of the particular
project or program. However, the report shall not be required more frequently than quarterly
or less frequently than annually. A final report shall be required at the completion of the
agreement.
(iv) The Federal awarding agency shall require recipients to submit the SF-269 or SF269A (an original and no more than two copies) no later than 30 days after the end of each
specified reporting period for quarterly and semi-annual reports, and 90 calendar days for
annual and final reports. Extensions of reporting due dates may be approved by the Federal
awarding agency upon request of the recipient.
(2) SF-272, Report of Federal Cash Transactions.
(i) When funds are advanced to recipients the Federal awarding agency shall require
each recipient to submit the SF-272 and, when necessary, its continuation sheet, SF-272a. The
Federal awarding agency shall use this report to monitor cash advanced to recipients and to
obtain disbursement information for each agreement with the recipients.
(ii) Federal awarding agencies may require forecasts of Federal cash requirements in
the "Remarks" section of the report.
(iii) When practical and deemed necessary, Federal awarding agencies may require
recipients to report in the "Remarks" section the amount of cash advances received in excess

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of three days. Recipients shall provide short narrative explanations of actions taken to reduce
the excess balances.
(iv) Recipients shall be required to submit not more than the original and two copies of
the SF-272 15 calendar days following the end of each quarter. The Federal awarding agencies
may require a monthly report from those recipients receiving advances totaling $1 million or
more per year.
(v) Federal awarding agencies may waive the requirement for submission of the SF272 for any one of the following reasons: (1) When monthly advances do not exceed $25,000
per recipient, provided that such advances are monitored through other forms contained in this
section; (2) If, in the Federal awarding agency's opinion, the recipient's accounting controls are
adequate to minimize excessive Federal advances; or, (3) When the electronic payment
mechanisms provide adequate data.
(b) When the Federal awarding agency needs additional information or more frequent reports, the
following shall be observed.
(1) When additional information is needed to comply with legislative requirements, Federal
awarding agencies shall issue instructions to require recipients to submit such information under the
"Remarks" section of the reports.
(2) When a Federal awarding agency determines that a recipient's accounting system does not
meet the standards in Section ___.21, additional pertinent information to further monitor awards may
be obtained upon written notice to the recipient until such time as the system is brought up to
standard. The Federal awarding agency, in obtaining this information, shall comply with report
clearance requirements of 5 CFR part 1320.
(3) Federal awarding agencies are encouraged to shade out any line item on any report if not
necessary.
(4) Federal awarding agencies may accept the identical information from the recipients in
machine readable format or computer printouts or electronic outputs in lieu of prescribed formats.
(5) Federal awarding agencies may provide computer or electronic outputs to recipients when
such expedites or contributes to the accuracy of reporting.
___.53 Retention and access requirements for records.
(a) This section sets forth requirements for record retention and access to records for awards to
recipients. Federal awarding agencies shall not impose any other record retention or access requirements
upon recipients.
(b) Financial records, supporting documents, statistical records, and all other records pertinent to an
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award shall be retained for a period of three years from the date of submission of the final expenditure report
or, for awards that are renewed quarterly or annually, from the date of the submission of the quarterly or
annual financial report, as authorized by the Federal awarding agency. The only exceptions are the
following.
(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the
records shall be retained until all litigation, claims or audit findings involving the records have been
resolved and final action taken.
(2) Records for real property and equipment acquired with Federal funds shall be retained for
3 years after final disposition.
(3) When records are transferred to or maintained by the Federal awarding agency, the 3-year
retention requirement is not applicable to the recipient.
(4) Indirect cost rate proposals, cost allocations plans, etc. as specified in paragraph ___.53(g).
(c) Copies of original records may be substituted for the original records if authorized by the Federal
awarding agency.
(d) The Federal awarding agency shall request transfer of certain records to its custody from
recipients when it determines that the records possess long term retention value. However, in order to avoid
duplicate recordkeeping, a Federal awarding agency may make arrangements for recipients to retain any
records that are continuously needed for joint use.
(e) The Federal awarding agency, the Inspector General, Comptroller General of the United States, or
any of their duly authorized representatives, have the right of timely and unrestricted access to any books,
documents, papers, or other records of recipients that are pertinent to the awards, in order to make audits,
examinations, excerpts, transcripts and copies of such documents. This right also includes timely and
reasonable access to a recipient's personnel for the purpose of interview and discussion related to such
documents. The rights of access in this paragraph are not limited to the required retention period, but shall
last as long as records are retained.
(f) Unless required by statute, no Federal awarding agency shall place restrictions on recipients that
limit public access to the records of recipients that are pertinent to an award, except when the Federal
awarding agency can demonstrate that such records shall be kept confidential and would have been
exempted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records had
belonged to the Federal awarding agency.
(g) Indirect cost rate proposals, cost allocations plans, etc. Paragraphs (g)(1) and (g)(2) apply to the
following types of documents, and their supporting records: indirect cost rate computations or proposals,
cost allocation plans, and any similar accounting computations of the rate at which a particular group of
costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates).

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(1) If submitted for negotiation. If the recipient submits to the Federal awarding agency or the
subrecipient submits to the recipient the proposal, plan, or other computation to form the basis for
negotiation of the rate, then the 3-year retention period for its supporting records starts on the date of
such submission.
(2) If not submitted for negotiation. If the recipient is not required to submit to the Federal
awarding agency or the subrecipient is not required to submit to the recipient the proposal, plan, or
other computation for negotiation purposes, then the 3-year retention period for the proposal, plan, or
other computation and its supporting records starts at the end of the fiscal year (or other accounting
period) covered by the proposal, plan, or other computation.
Termination and Enforcement
___.60 Purpose of termination and enforcement. Sections ___.61 and ___.62 set forth uniform suspension,
termination and enforcement procedures.
___.61 Termination.
(a) Awards may be terminated in whole or in part only if (1), (2) or (3) apply.
(1) By the Federal awarding agency, if a recipient materially fails to comply with the terms
and conditions of an award.
(2) By the Federal awarding agency with the consent of the recipient, in which case the two
parties shall agree upon the termination conditions, including the effective date and, in the case of
partial termination, the portion to be terminated.
(3) By the recipient upon sending to the Federal awarding agency written notification setting
forth the reasons for such termination, the effective date, and, in the case of partial termination, the
portion to be terminated. However, if the Federal awarding agency determines in the case of partial
termination that the reduced or modified portion of the grant will not accomplish the purposes for
which the grant was made, it may terminate the grant in its entirety under either paragraphs (a)(1) or
(2).
(b) If costs are allowed under an award, the responsibilities of the recipient referred to in paragraph
___.71(a), including those for property management as applicable, shall be considered in the termination of
the award, and provision shall be made for continuing responsibilities of the recipient after termination, as
appropriate.
___.62 Enforcement.
(a) Remedies for noncompliance. If a recipient materially fails to comply with the terms and
conditions of an award, whether stated in a Federal statute, regulation, assurance, application, or notice of
award, the Federal awarding agency may, in addition to imposing any of the special conditions outlined in
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Section ___.14, take one or more of the following actions, as appropriate in the circumstances.
(1) Temporarily withhold cash payments pending correction of the deficiency by the recipient
or more severe enforcement action by the Federal awarding agency.
(2) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part
of the cost of the activity or action not in compliance.
(3) Wholly or partly suspend or terminate the current award.
(4) Withhold further awards for the project or program.
(5) Take other remedies that may be legally available.
(b) Hearings and appeals. In taking an enforcement action, the awarding agency shall provide the
recipient an opportunity for hearing, appeal, or other administrative proceeding to which the recipient is
entitled under any statute or regulation applicable to the action involved.
(c) Effects of suspension and termination. Costs of a recipient resulting from obligations incurred by
the recipient during a suspension or after termination of an award are not allowable unless the awarding
agency expressly authorizes them in the notice of suspension or termination or subsequently. Other recipient
costs during suspension or after termination which are necessary and not reasonably avoidable are allowable
if (1) and (2) apply.
(1) The costs result from obligations which were properly incurred by the recipient before the
effective date of suspension or termination, are not in anticipation of it, and in the case of a
termination, are noncancellable.
(2) The costs would be allowable if the award were not suspended or expired normally at the
end of the funding period in which the termination takes effect.
(d) Relationship to debarment and suspension. The enforcement remedies identified in this section,
including suspension and termination, do not preclude a recipient from being subject to debarment and
suspension under E.O.s 12549 and 12689 and the Federal awarding agency implementing regulations (see
Section ___.13).
SUBPART D - After-the-Award Requirements
___.70 Purpose. Sections ___.71 through ___.73 contain closeout procedures and other procedures for
subsequent disallowances and adjustments.
___.71 Closeout procedures.

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(a) Recipients shall submit, within 90 calendar days after the date of completion of the award, all
financial, performance, and other reports as required by the terms and conditions of the award. The Federal
awarding agency may approve extensions when requested by the recipient.
(b) Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all
obligations incurred under the award not later than 90 calendar days after the funding period or the date of
completion as specified in the terms and conditions of the award or in agency implementing instructions.
(c) The Federal awarding agency shall make prompt payments to a recipient for allowable
reimbursable costs under the award being closed out.
(d) The recipient shall promptly refund any balances of unobligated cash that the Federal awarding
agency has advanced or paid and that is not authorized to be retained by the recipient for use in other
projects. OMB Circular A-129 governs unreturned amounts that become delinquent debts.
(e) When authorized by the terms and conditions of the award, the Federal awarding agency shall
make a settlement for any upward or downward adjustments to the Federal share of costs after closeout
reports are received.
(f) The recipient shall account for any real and personal property acquired with Federal funds or
received from the Federal Government in accordance with Sections ___.31 through ___.37.
(g) In the event a final audit has not been performed prior to the closeout of an award, the Federal
awarding agency shall retain the right to recover an appropriate amount after fully considering the
recommendations on disallowed costs resulting from the final audit.
___.72 Subsequent adjustments and continuing responsibilities.
(a) The closeout of an award does not affect any of the following.
(1) The right of the Federal awarding agency to disallow costs and recover funds on the basis
of a later audit or other review.
(2) The obligation of the recipient to return any funds due as a result of later refunds,
corrections, or other transactions.
(3) Audit requirements in Section ___.26.
(4) Property management requirements in Sections ___.31 through ___.37.
(5) Records retention as required in Section ___.53.
(b) After closeout of an award, a relationship created under an award may be modified or ended in
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whole or in part with the consent of the Federal awarding agency and the recipient, provided the
responsibilities of the recipient referred to in paragraph ___.73(a), including those for property management
as applicable, are considered and provisions made for continuing responsibilities of the recipient, as
appropriate.
___.73 Collection of amounts due.
(a) Any funds paid to a recipient in excess of the amount to which the recipient is finally determined
to be entitled under the terms and conditions of the award constitute a debt to the Federal Government. If not
paid within a reasonable period after the demand for payment, the Federal awarding agency may reduce the
debt by (1), (2) or (3).
(1) Making an administrative offset against other requests for reimbursements.
(2) Withholding advance payments otherwise due to the recipient.
(3) Taking other action permitted by statute.
(b) Except as otherwise provided by law, the Federal awarding agency shall charge interest on an
overdue debt in accordance with 4 CFR Chapter II, "Federal Claims Collection Standards."

Appendix A
Contract Provisions
All contracts, awarded by a recipient including small purchases, shall contain the following provisions as
applicable:
1. Equal Employment Opportunity - All contracts shall contain a provision requiring compliance with
E.O. 11246, "Equal Employment Opportunity," as amended by E.O. 11375, "Amending Executive Order
11246 Relating to Equal Employment Opportunity," and as supplemented by regulations at 41 CFR part 60,
"Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor."
2. Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40 U.S.C. 276c) - All contracts and subgrants in
excess of $2000 for construction or repair awarded by recipients and subrecipients shall include a provision
for compliance with the Copeland "Anti-Kickback" Act (18 U.S.C. 874), as supplemented by Department of
Labor regulations (29 CFR part 3, "Contractors and Subcontractors on Public Building or Public Work
Financed in Whole or in Part by Loans or Grants from the United States"). The Act provides that each
contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in the
construction, completion, or repair of public work, to give up any part of the compensation to which he is
otherwise entitled. The recipient shall report all suspected or reported violations to the Federal awarding
agency.
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3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7) - When required by Federal program legislation,
all construction contracts awarded by the recipients and subrecipients of more than $2000 shall include a
provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to a-7) and as supplemented by
Department of Labor regulations (29 CFR part 5, "Labor Standards Provisions Applicable to Contracts
Governing Federally Financed and Assisted Construction"). Under this Act, contractors shall be required to
pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage
determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not
less than once a week. The recipient shall place a copy of the current prevailing wage determination issued
by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the
acceptance of the wage determination. The recipient shall report all suspected or reported violations to the
Federal awarding agency.
4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333) - Where applicable, all contracts
awarded by recipients in excess of $2000 for construction contracts and in excess of $2500 for other
contracts that involve the employment of mechanics or laborers shall include a provision for compliance
with Sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), as
supplemented by Department of Labor regulations (29 CFR part 5). Under Section 102 of the Act, each
contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard
work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is
compensated at a rate of not less than 1 ½ times the basic rate of pay for all hours worked in excess of 40
hours in the work week. Section 107 of the Act is applicable to construction work and provides that no
laborer or mechanic shall be required to work in surroundings or under working conditions which are
unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or
materials or articles ordinarily available on the open market, or contracts for transportation or transmission
of intelligence.
5. Rights to Inventions Made Under a Contract or Agreement - Contracts or agreements for the
performance of experimental, developmental, or research work shall provide for the rights of the Federal
Government and the recipient in any resulting invention in accordance with 37 CFR part 401, "Rights to
Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants,
Contracts and Cooperative Agreements," and any implementing regulations issued by the awarding agency.
6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251
et seq.), as amended - Contracts and subgrants of amounts in excess of $100,000 shall contain a provision
that requires the recipient to agree to comply with all applicable standards, orders or regulations issued
pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the Federal awarding agency and the
Regional Office of the Environmental Protection Agency (EPA).
7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352) - Contractors who apply or bid for an award of
$100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and
has not used Federal appropriated funds to pay any person or organization for influencing or attempting to
influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or
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an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other
award covered by 31 U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal funds that
takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier
up to the recipient.
8. Debarment and Suspension (E.O.s 12549 and 12689) - No contract shall be made to parties listed on the
General Services Administration's List of Parties Excluded from Federal Procurement or Nonprocurement
Programs in accordance with E.O.s 12549 and 12689, "Debarment and Suspension." This list contains the
names of parties debarred, suspended, or otherwise excluded by agencies, and contractors declared ineligible
under statutory or regulatory authority other than E.O. 12549. Contractors with awards that exceed the small
purchase threshold shall provide the required certification regarding its exclusion status and that of its
principal employees.

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